TAX DEDUCTION/ COLLECTION AT SOURCE

RELEVANCE OF TDS Govt makes welfare schemes Forecasts revenue for a year (Borrowings/ taxes) Round the year fund flow ensures effective funding of schemes TDS deposited every month ensures circulation of money Effective implementation of schemes

TDS/ TCS WORK FLOW Obtain TAN Deduct/ collect taxes from liable payments (at the time of payment/ receipt or, at the time of debiting/ crediting the books) at prescribed rates Deposit TDS/ TCS (Challan 281) within the prescribed time limit File quarterly statements (24Q, 26Q, 27EQ) withinn the prescribed time limit in the prescribed manner Issue TDS/ TCS certificates within the prescribed time limit

WORK FLOW OF e-FILING OF STATEMENTS (prior to CPC TDS) Deductor deducts/ collects tax Deductor pays tax Preparation of e-statement and submitting it at TIN-FC in e-format Uploading of statement to agency of NSDL Uploading of statements to NSDL Processing of statement by NSDL Intimation generated by I.T.Department Correction statement filed at TIN FC, followed by processing at NSDL 26AS generated followed by processing

WORK FLOW OF e-FILING OF STATEMENTS (post CPC TDS) Deductor deducts/ collects tax Deductor pays tax Preparation of e-statement and submitting it at TIN-FC in e-format Uploading of statement to agency of NSDL Uploading of statements to NSDL Transfer of statement to CPC TDC Processing of statement by CPC TDS Intimation generated by I. T. Department Correction statement filed at TIN FC, followed by transfer of statement to CPC TDS Processing of correction statement by CPC TDS 26AS generated followed by processing

CPC-TDS Taxpayer Deductor Advance Tax,SA Tax TDS Deposit Banks 12/27/2012 Taxpayer Deductor Advance Tax,SA Tax TDS Deposit Banks e-TDS statement e-filed Income tax Returns OLTAS TIN-FC CPC-TDS AST/CPC-Bengaluru Matching of Challans Generation of PAN ledgers Identification of defaults Portal,DMS,BI, Other Tax Credits DEDUTORS PORTAL 26AS VIEW -TAXPAYERS AO portal

CPC (TDS): Game Changer - Deductors will get benefitted by non-intrusive integrated online services related to Statement/ Challan processing status, Default information, TDS certificates and real-time support for clarifications.   - Taxpayers will have the convenience of viewing 26AS on a real-time basis and real-time support for clarifications. - Field AOs will be enabled to ensure enforcement and compliance through online Ticket Management System.

CPC (TDS) for Deductors   Downloads TDS Certificates Form 16/ 16A Form 16B Form 27D Transaction Based Report for Non - Residents Consolidated Statement File Justification Reports Aggregated TDS Compliance Report Non - Resident Taxpayer Registration e-Tutorials and FAQs Circular and Notifications CPC (TDS) Communications TRACES: https://www.tdscpc.gov.in Dashboard Statement Status and Default payable Deductor Compliance Profile   Online Corrections View Defaults Summary Online PAN Verification Statement and Challan Status TAN – PAN Consolidated File

Deductor Functionalities in TRACES Online correction Default Summary Deductor Dashboard Statement Status Challan Status View TDS/TCS Credit PAN Verification Justification report Download Forms Validation of 197 Certificate Non Filing of Statement Request for Resolution Tag Replace Challan

Deductor’s Dashboard  Deductor’s Dashboard displays important information at one screen. The following information can be viewed by the deductor in its dashboard: Statement Status: Processing status of the Statements of last four quarter along with Default Summary. Communication Inbox: - To view the recent communication made between TRACES and Deductor. This also facilitates the downloading of Intimations sent to the deductor. Summary of recent activity by the deductor.

Deductor Dashboard

Statement/ Payment Status

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Aggregated TDS Compliance Report An entity level PAN associated with more that one TANs, for example PAN of the Central Office, Headquarter etc., having more that one TANs for its branches, can review the "Aggregated TDS Compliance" report on a regular basis to improve TDS compliance at Organization level. The feature assists in effective TDS administration, monitoring, control and compliance at Organization level. While conducting Audits, the above feature can be used for the purpose of identifying Defaults in respect of all TANs associated with the entity level PAN. The feature will be extremely useful for the purpose of complying with the provisions of Section 40(a)(ia) of the Income Tax Act, 1961 by the concerned entity, to ensure that correct information is disclosed in paragraph 27 A & B of the Tax Audit Report (Form 3CD) u/s 44AB of the Act. Functionality available for Financial Year 2007-08 onwards. The download of the list of defaults of various TANs associated with a PAN will be available in Excel Format for which a request has to be placed.

Aggregated TDS Compliance Request (Contd.) Select ; Aggregated TDS Compliance

Aggregated TDS Compliance Request (Contd.) Enter Request Number (Search Option 1) or Request Date (Search Option 2 Click on ‘View All’ to view all download requests Copyright © 2012 Income Tax Department

Online Corrections Functionality Important Facts: Statements for Financial Year 2012-13 onwards only will be available for Online Corrections. Digital Signature is mandatory for all type of Online Corrections, except for Challan Corrections. The following actions can be performed with Online Corrections: Tag Unmatched Challans Corrections for Overbooked Challan – movement of Deductee Rows Modify/ Add Deductee details PAN Correction Update Personal Information Pay 220, Interest, Levy for Late filing

Online Corrections This feature enables the Deductor to file Online Correction statements through TRACES portal without downloading TDS/TCS Consolidated File. Apart from the currently available facilities for PAN Correction and Challan Correction. Following facilities are to be allowed PAN Correction Challan Correction Add challan to statement Modify/Add deductee row Modify Salary details Pay 220I, Late Payment, Late Deduction and Late Filing Interest Update of Personal Information Movement of Deductee Rows

PAN AND CHALLAN CORRECTION BY DEDUCTOR New functionality Utility PAN Correction mechanism introduced at the deductor portal of TRACES Deductor will not have to go through the tedious process of filing correction statement, by downloading conso file in case only PAN needs to be corrected. Challan correction mechanism introduced at the deductor portal of TRACES Matched challans can be corrected to the extent of section, amount of interest and others Unmatched challans can also be consumed now.

Download Form 16 Data in Form 16 will be as per latest statement processed (Form 24Q ) for selected FY & Quarter Download request for Form 16 for a particular FY can be submitted only after Form 24Q statement for Q4 for the selected FY is filed by deductor and processed by TDS CPC. Statement filed should not have been cancelled or NIL Statement. Form 16 can be downloaded from FY 2007-08 onwards For a given FY, TAN and PAN, there will be only one Form 16. In case of more than one employer, a PAN holder can have those many Form 16s

Click on Help icon for help text for this screen Justification Report Click on Help icon for help text for this screen Select Financial Year, Quarter and Form Type for which Justification Report is required and click on ‘Go’ Validation screen will be presented on click of ‘Go' Request for Justification Report can be submitted only if: Selected statement has been not filed as paper return

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Recent COMMUNICATION FROM CPC

COMMON ISSUES PERTAINING TO TRACES FACED BY DEDUCTORS Rejection of correction statements Refund 197 certificate verification Demand pertaining to interest Correction statements pertaining to paper statements of F.Y. 07-08 Cancellation of statement facility Cancellation of TAN facility Problems relating to 16B Problem in downloading conso file Intimation u/s 200A issues

REJECTION OF CORRECTION STATEMENTS Probable Reasons for rejection Solution Sequence of challan / salary/ deductee detail record being added in a correction statement is not in continuation of the last sequence number for the said record in the original statement. Add deductee row in sequence to the preceding row in the conso file followed by filing of the corrected statement Deductor may have changed the field which are not updatable fields by Mistake Deductor should not make any changes in non updatable fields Deductor has not used latest conso file for filling correction statement Use the latest conso file

Probable Reasons for rejection Solution Valid to Valid PAN correction can be done only Once. The statement is rejected, since Deductor has already filed one Valid to Valid PAN correction before the present correction statement. Check the PAN from PAN verification at TRACES portal before making the PAN correction If deductor submit a correction statement to update existing matched / partially matched challan with updates on one or more of fields other than the following. a) Interest, b)Others and c)Section Code. Change in any other field will lead to rejection of the correction statement. Deductor should not make any changes in any field of BOOKED Challan except Interest,Others & Section Code

REJECTION OF CORRECTION STATEMENTS Probable Reasons for rejection Solution Total Challan Amount is less than the sum of TDS + Interest + Others Amount Deductor should not quote the amount more than the available balance in the correction statement.

OLTAS CHALLAN CORRECTION VIA BANK/ AO Problems faced by the deductors Reasons and Solution Challan not getting corrected in a reasonable period of time Issue taken up with CPC

REFUND THROUGH DEDUCTOR PORTAL New functionality Utility Claim of refund in case of excess payments through the deductor portal of TRACES (Digital signature required) Deductor can apply for refund online No direct interface with field AO The refund will be issued by TDS CPC only fter making certain verifications from field AO Field AO- CPC TDS interface yet to be established in this regard

197 CERTIFICATE VERIFICATION New functionality Utility Deductor can verify the details/ validity of the low deduction certificate u/s 197 of the Act before filing the statement by the deductor portal of the TRACES Short deduction demand pertaining to low deduction certificate can be resolved by using this functionality

DEMAND PERTAINING TO INTEREST Problem Solution Deductor gets short deduction notices for default in interest payment. Payment made, correction statement filed, but still get a short deduction notice. The amount of interest mentioned in the notice/ intimation is provisional (as on the date of processsing).The deductor needs to recompute interest at the time of making payment/ filing statement for correct compliance.

DEMAND PERTAINING TO INTEREST Problem Solution Deductor gets short deduction notices for default in interest payment. Deductor complaints that though interest has been computed correctly, he/ she is getting notice/ intimation. The period for computing interest should be calculated from the date of tax dedution till payment made (and not from the due date of payment). E.g., if TDS is deducted on 30th Nov and paid on 9th Dec, interest has to be paid for two months.

DEMAND PERTAINING TO PAN STATUS Problem Reason/ Solution Deductor gets short deduction notice with justification that the deduction u/s 194C has been done @1%, instead of @2%. The deductee is not an Individual or HUF.

CORRECTION STATEMENTS PERTAINING TO PAPER STATEMENTS OF F.Y. 2007-08 Problem Reason/ Solution Deductor is not able to file correction statements pertaining to paper statements pertaining to F.Y. 2007-08 The correction statement can be filed in paper format only as new statement after cancelling the original statement.

CANCELLATION OF STATEMENTS FACILITY Problem Reason/ Solution A deductor while filing a statement quotes wrong TAN. The deductor whose TAN was quoted is not able to file the statement as the system reads “original statement already filed”. The deductor cannot even file the correction statement in absence of data. Hence, justification for “cancellation of statement” facility. The cancellation of statement functionality was withdrawn few years back because of its misuse. The issue is being taken up with CPC TDS.

CANCELLATION OF TAN FACILITY Problem Reason/ Solution A deductor stops using a TAN and wants to cancel it as it keeps on getting “non filer notices” from the department. The TAN can be made inactive through ITD system. The TAN cannot be cancelled because the deductor’s statements can be scrutinised till six years. Any default detected later may create complications.

PROBLEMS RELATING TO 16B Problem Reason/ Solution Seller not getting the credit (zero credit) in form 16B. The Deductor (Buyer) should fill the amount of tax in 'TDS Amount to be Paid' field and not in 'Interest' or 'Fee' field. Else, the seller will not get the credit of such tax

PROBLEM IN DOWNLOADING CONSO FILE Reason/ Solution Deductor is not having the mandatory detail of at least one Challan and three PANs, in order to download conso file No alternative remedy as per law as of now.

Intimations u/s 200A-Issues Advisory Paid the demand raised for late payment fee u/s 234E File a correction statement after adding the payment challan w/o any deductee rows. Requested for the waiver of Fee levied u/s 234E Cannot be waived off as it is a statutory levy Wrong TAN in OLTAS challan leading to Short Payment. Jurisdictional AO to raise request for challan correction through AO Portal Paid the demand raised in the intimation u/s 200A File correction statement for closing defaults. Details of the defaults not appearing in the intimation u/s 200A Download a Justification Report from the TRACES website. Short deduction default in a 197 certificate case or transporter case Verify relevant flags in the statement

How to avoid Defaults in TDS Statements?

Late Payment: DO’S 1. Tax should be deposited within seven days from the end of the month in which the deduction is made or income-tax is due, where tax is paid accompanied by an income- tax challan . 2. Date of Deduction and Date of payment should be correctly filled. 3. Book Entry Flag should be raised according to type of Deductor. DONT’S 1. Date of deduction should not be Null 2. Date of Payment/credit should not be Null. 3. Date of Deduction should not be before the date of payment /credit. 4. No Book Entry allowed for Non-Govt. Deductor.

Late Filing: DO’S 1. Quarterly Statement should be filed within due date prescribed by Income Tax under rule 31 A. 2. Select correct deductor type category while filing statement. DONT’S 1. Don’t delay in filing regular statement. 2. Don’t select wrong deductor type category while filing statement.

Short Deduction: DO’S 1. Deducts TDS according to section rate prescribed in Income Tax Act. 2. Quote valid PAN while filing statement. 3. Appropriate flag should be raised as given below: A-Lower/No Deduction for Certificate B-Higher Deduction where PAN is not available. C-Higher Deduction where PAN is not available T-No Deduction for Transporters having PAN Y- No deduction due to payment below threshold limit. 4. Quote Certificate No. issued by ITD for relevant TAN –PAN Combination, F.Y, Quarter and periodicity. 5. Proper slab rate should be use according to deductee type for calculation of income tax in case of salary. 6. Certificate no. should be of 10 digits with alpha numeric structure.

Short Deduction: DONT’S 1. Don’t deduct with wrong section rate. 2. Don’t quote invalid PAN in statement.. 3. Don’t Raise Flag A for PAN which do not have 197 certificate. 4. Don’t mentioned incomplete certificate number. 5. Don’t use expired certificate. 6. Don’t use wrong Income Tax Slab.  

Short Payment: DO’S 1. Deducted/Collected amount should be equal to deposited amount. 2. Oltas Available Balance should be equal or more than deducted /collected amount. 3. Oltas challan should be matched with statement Challan after applying matching rules. 4. Govt. Deductor needs to raise Book Entry Flag “Y” in case of BIN. DONT’S 2. Available Oltas Balance should not be less than deducted/collected amount. 3. Challan details as per statement should not mismatch with Oltas Challan Details after applying matching rules. 4. Don’t raise wrong book entry flag in statement . 

THANK YOU