CA. TEJAS PUROHIT 1

PART-A 2

 Chapter XVII-B of the ITA-1961 deals with the deduction of tax from various payments made by the deductor during the FY.  Section 192 to Section 196D covers various types of payments on which deductor is required to deduct TDS either at the time of amount credited or payment made by the deductor 3

SectionPoint of Deduction 192/192A/194B/194BB/194DA/194EE /194F At the time of Payment Rest of SectionsAt the time of Credit or Payment whichever is earlier 4

Section 200(1) of the IT Act requires deductors to pay TDS within prescribed time. (Relevant Rule-30) 5

SectionNature of PaymentMonth of Deduction / Payment Due date for Payment 192 to 195Salary & OtherApril to Feb7 th day of next month 192 to 195Salary & OtherMarch30 th day of April of next FY 194IAPurchase of Immovable Properties April to March30 th day of next month 6

As per the said rule following persons are required to pay tax including any interest or penalty electronically on or after 01/04/2008. a. Company and b. a person covered u.s. 44AB (Other than Company) 7

Sr. No. PeriodSimple rate of Interest a.From the date of tax deductible to the date of tax deducted 1% b.From the date of tax deducted to the date of tax actually paid 1.5% 8

Section 200(3) of the IT Act requires deductors to prepare TDS return in prescribed forms & file the same with the TIN facilitation centre (Persons Authorised by Income Tax Authority) within prescribed time. (Relevant Rule 31A) 9

Form NoParticularsRelevant Sections under which TDS deducted 24QTDS from Salary192 26QTDS from payments other than salary193 to 194LD except TDS u.s. 194IA 26QB (Challan Cum Return) TDS from payments made for purchase of immovable properties194IA 27QTDS from payments made to NRIs195/194LB/194LC/194LD/ 196A/B/C/D 10

QuarterDue date w.e.f. 01/06/2016 Due date upto 01/06/2016 Q1- ending on 30 th June31 st July of the FY15 th July of the FY Q2-ending on 30 th September31 st October of the FY 15 th October of the FY Q3-ending on 31 st December31 st December of the FY 15 th January of the FY Q4-ending on 31 st March31 st May of next immediate FY 15 th May of next immediate FY 11

 Section 234E of the IT Act has prescribed levy of fee in case of deductor fails to file E-TDS return within prescribed time w.e.f. 01/07/2012.  Late filing fees is Rs.200/- per day for every day during which the failure continues subject to maximum up to TDS amount.  Deductor is required to pay such levy before filing of E-TDS return 12

 Section 200A-Computation of TDS deductible after following adjustments a. Arithmetical error in E-TDS return filed or any incorrect claim apparent from information contained in the E-TDS return b. Interest on the sum deductible as per the E- TDS return c. Late filling fees u.s. 234E (introduced by FA- 2015, w.e.f 01/06/

 After making adjustment as discussed in previous slide, intimation stating amount payable by or refundable to the deductor will be sent to the deductor.  No intimation u.s. 200A shall be sent after the expiry of one year from the end of the FY in which the E-TDS return is filed. 14

Particulars Financial Year & Quarter26Q4 of FY Return filling date15/05/2013 Financial year in which return is filed Intimation u.s. 200A can be sent upto31/03/

 Amritsar Bench of ITAT in the case of Sibia Healthcare Private Limited Vs DCIT held that fees u.s. 234E cannot be levied before 01/06/2015 since there were no enabling provisions under section 200A.  Similar view taken by Chennai Tribunal & Chandigarh Tribunal in the case of G.Indhirani Vs DCIT & M/s Khanna Watches Ltd. Vs. DCIT 16

17 PART-B

1. Deduction & Payment of TDS 2. Preparation of E-TDS Return 3. Filling of E-TDS Return 4. Quarterly statement status report 5. Analysis of Justification Report 18

 All the Corporate & Goverment deductors/collectors  Persons who are covered u.s. 44AB of the IT Act  Where no of deductee records in a statement are 20 or more. 19

 Government Utility or Private Software can be used.  Return can be validated by file validation utility (.fuv)  Files to be submitted with TIN-FC through electronic media viz pendrive/CD along with signed copy of Form 27A are.fuv,.txt,.html 20

Filling of E-TDS return with TIN-FC or Online Filling Return processed by NSDL & transfers data to TRACES for further process TRACES further processes the data & generates TDS Certificate/ Intimation 21

1. Challan Mode (Physical Challan): Wrong TAN may quoted - “0” may be wrongly typed as “o” & vise a versa - “D” may be wrongly typed as “o” & vise a versa - “I” may be wrongly typed as “1” & vise a versa - “5” may be wrongly typed as “S” & vise a versa (Whatever the mistake in TAN, the NSDL will not validate your payment & will show a error message as “Matching Pending”) 2. Payment through Net Banking – ensures payment is made only in the correct TAN 22

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 Tax is to be deposited by 7 th of the next month and in case of deduction in the month of March, by 30 th April  If the due date is the public holiday, tax can be paid in the next day. However system does not recognise such a clause and notice for interest on delay in payment may be received. In that case rectification application will then have to be filed with the jurisdictional TDS Officer. 24

 Online payment of tax – request for rectification of mistake with jurisdictional AO(TDS)  Physical payment of tax – request for rectification of mistake with bank within 7days in respect of TAN, AY & Amount and within 3 months in case of other fields. Note: After the time limit rectification application can be filled with the jurisdictional AO(TDS) More details on Challan Correction Mechanism available at india.gov.in/documents/challan-correction-mechanism htm?int=1&IsDlg=1 india.gov.in/documents/challan-correction-mechanism htm?int=1&IsDlg=1 25

1. Basic details of the Deductor – PAN, TAN, Status, Address, responsible person etc. 2. Basic details about the Deductee – PAN, Date of payment, Amt. paid, Tax Deducted, Tax Paid, Rate of TDS Challan Detail (CIN) 3. Correct Challan Detail 26

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01/03/

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- It may be possible that physical challan is available with the deductor but does not reflected in NSDL site due to non uploading of challan details or wrong details may be uploaded in OLTAS by collecting bank. ( Deductor is required to inform the Bank for uploading the challan detail in OLTAS or correct the details uploaded before preparation of E-TDS return) 33

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In E-TDS return correct details about the challan is required to be entered viz BSR Code, Challan Serial no., Date of Payment (Challan Identification No.) and amount paid. Any mistake will result in generation of default by the system with “short payment” status. (This can be corrected by filling correction return / Online Correction facility from TRACES) 39

01/03/

In E-TDS return correct PAN of the deductee is required to be mentioned otherwise it will not be reflected in Form 26AS of the deductee and assessee will not get the credit for the same. (This mistake can be corrected by filing “Correction Statement(Return/or online correction with DSC of responsible person)” 41

 Section 206AA – Where the PAN provided to the deductor is invalid or does not belong to deductee, it shall be deemed that the deductee has not furnished his PAN to the deductor and the provisions of sub-section (1) i.e. higher deduction of tax, shall apply accordingly.  Notice for short deduction received with interest. 42

 Rectification of more than 4 characters in the PAN not permitted (2 characters in digit & 2 characters in letters) (Whether valid to valid or invalid to valid)  Advisable to verify PAN of all the deductees through online verification facility available on TRACES. 43

In E-TDS return wrong mention of amount paid to deductee, TDS deducted, Section, Rate at which TDS deducted will result into short deduction/payment of TDS & department can raise the demand notice for the same. (This mistake can be corrected by filing “Correction Statement (Return)” 44

 Correction is not permitted when deductee’s data are inserted with “ c “ flag.  Only up dation of PAN is permitted.  No deletion or modification in the field of Amount paid, TDS deducted & TDS deposited 45

Once the data is uploaded in the required software, the resultant file is to be given to NSDL TIN facilitation centre for filing. TIN facilitation center will issue acknowledgement bearing 15 digit no for the same. Which will be required to file the “Correction Statement”. 46

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This will show you whether E-TDS return uploaded is “Accepted by TIN” or Rejected by TIN” (In case it is rejected by the TIN, deductor is required to file again original return till it is not accepted by the TIN) It can be viewed on and select –E-TDS/TCS Filling-Quarterly Statement Statuswww.tin-nsdl.com 48

01/03/

 If return is processed with default notice u.s. 200A will be sent to the deductor which is similar to intimation u.s. 143(1) issued in case of income tax returns.  Intimation u.s. 200A is to be treated as a notice of demand as per the deeming provision u.s

01/03/

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 Short Deduction – Wrong section, wrong % of TDS, wrong PAN (206AA).  Short Payment – Mismatch of challan with OLTAS, Diff in TDS deducted & TDS deposited, Wrong AY while payment of actual challan & AY inserted in return.  Once correction return is filed for short deduction or short payment, interest thereon will be deleted accordingly 53

1. After correct analysis of justification report deductor is required to download conso file from TRACES & make necessary correction in the conso file. 2. After making necessary corrections in conso file, deductor is required to re-upload the return. 3. Online correction is permissible but only limited correction is allowed in online correction facility viz moving of deductee data from one challan to another challan, data of responsible person, adjustment of interest or penalty against unconsumed challan, unclaimed challan, New Challan 54

1. Deductor is required to request for updated fvu file for filing correction statement. 2. Deductor can know default raised in original E- TDS return filed by the deductor. 3. Deductor is required to issue Form 16A after downloading it from the tin-nsdl site. 55

COMPLIANCE OF PROVISIONS OF TDS IS NOT ONLY IMPORTANT BUT FILLING OF CORRECT E- TDS RETURN IS ALSO IMPORTANT TO AVOID NOTICES FROM IT DEPARTMENT 56

CA. Tejas Purohit Bipin & Company Chartered Accountants 302-Centre Point, R C Dutt Road, Alkapuri, Vadodara (M) :