Posts Tagged ‘TDS’

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UTN not mandatory for filing IT returns

September 12th, 2009

The Central Board of Direct Taxes have further decided that the Notification No. 31 of 2009 dated 25.3.2009 amending or substituting Rules 30, 31, 31A and 31AA of the Income Tax Rules, 1962 shall be kept in abeyance for the time being.

Taxpayers filing their income tax returns for assessment year (AY) 2009-10, or any other earlier AY, may continue to file their returns without mentioning the Unique Transaction Number (UTN) as required under the said Notification. The filing of such returns shall be treated as valid and in compliance to the requirements under section 139 of the Income Tax Act, 1961.

Further, the date from which the Notification No. 31 / 2009 shall become applicable on tax deducted at source (TDS) or tax collected at source (TCS) and deposited during the current financial year shall be notified by the Central Board of Direct Taxes subsequently.

All deductors / collectors of TDS / TCS may continue to deposit their TDS / TCS and file their quarterly TDS / TCS returns as per procedure existing prior to issuance of Notification No.31 / 2009 dated 25.3.2009.

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Modifications in the e-TDS/TCS data structure and new File Validation Utility applicable from October 1, 2009

September 4th, 2009

The data structure of quarterly e-TDS / TCS statements has been modified by the Income Tax Department to incorporate certain additional fields and validations to further improve the data quality.

Key changes in the data structure of both regular and correction e-TDS/TCS files are indicated below:

  1. The types of deductor in the data structure have been further bifurcated. For e.g. State Govt., Central Govt., Company, Firm etc.

  2. The following fields have been added: -

    • Ministry name,
    • PAO / DDO code,
    • PAO / DDO registration no.,
    • State name,
    • Name of the utility used for return preparation.

In addition to the new fields, certain functionalities as under have been built in the FVU:

  1. Functionality to verify the challan details quoted in the e-TDS / TCS returns with the challan details uploaded by banks is provided.

  2. In case of failure of verification of challans, a warning file containing details of challan mismatch will be generated.

  3. Statistic report generated by FVU will contain details of verification of challans and bifurcation of payment by Government deductors (transfer voucher / challan)

All deductors are required to ensure that quarterly e-TDS/TCS returns filed from October 1, 2009 is as per the new data structure. Any statement filed as per the old data structure will be rejected at TIN w.e.f October 1, 2009.

However, e-TDS / TCS correction on regular returns filed as per the old data structure (validated with FVU version upto 2.126) should be validated with FVU version 2.126 only.

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Budget 2009-10: TDS changes

August 7th, 2009
TDS Rates
Applicable for AY 2010-11 (FY 2009-10)
1. 194-I: Rental Payments
a. Earlier rates:
Plant and Machinery = 10%
Land or building or furniture or fittings to Individual/HUF = 15%
Land or building or furniture or fittings to Others = 20%
b. Revised Rates:
Plant and Machinery = 2%
Land or building or furniture or fittings to anyone = 10%
2. 194-C: Contracts
a. Earlier rates:
Contracts = 2%
Sub-Contracts = 1%
Advertisement Contracts = 1%
b. Revised Rates:
Contracts to Individuals/HUF = 1%
Contracts to others = 2%
Surcharge and Cess
1. No surcharge or Cess is applicable for TDS. Only the specified TDS rates should be considered for deduction
2. Applicable for AY 2010-11 (FY 2009-10).
Payment to Transporters:
1. For any Transporters, if they Provide the PAN number, the TDS on contract payments is NIL.
2. But, if they do not provide the PAN during the payment, 1% TDS has to be made for Individuals/HUF and at 2% for others.
3. Payments to transporters without deducting TDS (as they have quoted PAN) should be reported by Deductor with PAN details
to the Income Tax Department in the prescribed format.
4. Applicable for AY 2010-11 (FY 2009-10).
Compulsory PAN (Section 206AA)
1. It is mandatory to quote PAN in all correspondence, bills and vouchers exchanged between Deductor and deductee.
2. TDS shall be made at a flat rate of 20% (or actual rate, whichever is higher) for any payments, where assessee has not
quoted the PAN during the payment.
a. This is applicable even in case where assessee gives Form 15G/15H u/s 197A.
b. This is also applicable for Non resident Payments.
3. Assessing officer shall not rise the letter for lower/no deduction, If assessee doesn’t quote a PAN.
4. Applicable for AY 2011-12 (FY 2010-11). Means the payments made on or after 01st April 2010.
TDS reconciliation (Section 200A)
1. A new section 200A is introduced.
2. TDS return filed by the deductor will be processed by the following way:
a. TDS deductible will be computed on the basis of data in TDS statement, after adjusting any arithmetic error or an
incorrect claim.
b. The interest, if any, shall be computed on the basis of the sums deductible on the basis of data in TDS statement.
c. Any amount payable by / refund to Deductor shall be determined.
d. Intimation shall be sent to Deductor on Amount payable / refundable.
e. The amount refundable, if any shall be granted to Deductor.
TDS returns
1. Currently returns has to be filed Quarterly in Form 24Q/26Q/27Q/27EQ
2. Currently government is not allowed to decide the Periodicity of TDS returns, as the power is limited only for structure
of forms and the manner.
3. In order to provide administrative flexibility in deciding the periodicity of such TDS related statements, the existing
provisions are modified, so as to allow the Government to prescribe periodicity of such TDS statements besides prescribing
their form and manner.
4. Applicable from 01st October 2009.
Computerized processing of TDS returns
1. Currently every TDS return involves manual-cum-computerized processing inside the department.
2. To make the process efficient, department will computerize whole process, where statements regard to TDS will be
processed.
a. This will be on the same lines, how IT returns processing has been computerized in Income Tax Department.
b. This processing will allow manual interference for
A. Any arithmetical error in the statement.
B. An incorrect claim, if such incorrect claim is apparent from any information in the statement, for example, in respect
of rate of deduction of tax at source where such rate is not in accordance with the provisions of the Act.
c. A Centralized Processing Center may be established in this regard.
d. Applicable for AY 2011-12 (FY 2010-11).

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Know Form 27A/B

July 22nd, 2009

Form No. 27A/B is a control chart of quarterly e-TDS/TCS statements to be filed in paper form by deductors/collectors alongwith quarterly statements. It is a summary of e-TDS/TCS returns which contains control totals of ‘amount paid’ and ‘income tax deducted at source’. The control totals of ‘amount paid’ and ‘income tax deducted at source’ mentioned on Form No. 27A/B should match with the corresponding control totals in e-TDS/TCS return. A separate Form No. 27A/B is to be filed for each e-TDS/TCS return.
In case of Annual Returns the relevant control charts are Form 27A for e-TDS and Form 27B for e-TCS.

While submitting Form No. 27A/B, one should ensure that:
a) There is no overwriting/striking on Form No. 27A/B. If there is any, then the same should be ratified (signed) by the authorised signatory.
b) Name and TAN of deductor and control totals of ‘amount paid’ and ‘income tax deducted at source’ mentioned on Form No. 27A/B should match with the respective totals in the e-TDS/TCS return.
c) All the fields of Form No. 27A/B are duly filled.

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Basics about eTDS / eTCS

July 17th, 2009

Annual e-TDS/TCS return is the TDS return under section 206 of the Income Tax Act (prepared in Form Nos. 24, 26 or 27) or TCS return under section 206C of the Income Tax Act (prepared in Form No. 27E), which is prepared in electronic media as per prescribed data structure. Such returns furnished in a CD/floppy should be accompanied by a signed verification in Form No. 27A in case of Annual TDS returns or Form No. 27B in case of Annual TCS return.

TDS/TCS returns filed in electronic form as per section 200(3)/206C, as amended by Finance Act, 2005, are quarterly TDS/TCS statements. As per the Income Tax Act, these quarterly statements are required to be furnished from FY 2005-06 onwards. The forms used for quarterly e-TDS statements are Form Nos. 24Q, 26Q and 27Q and for quarterly e-TCS statement is Form No. 27EQ. These statements filed in CD/floppy should be accompanied by a signed verification in Form No. 27A in case of both e-TDS/TCS statements.

As per Income Tax Act, 1961, all corporate and government deductors/collectors are compulsorily required to file their TDS/TCS returns on electronic media (i.e. e-TDS/TCS returns). However, deductors/collectors other than corporate/government can file either in physical or in electronic form.

An e-TDS return should be filed under Section 206 of the Income Tax Act in accordance with the scheme dated August 26, 2003 for electronic filing of TDS return notified by the Central Board of Direct Taxes (CBDT) for this purpose. CBDT Circular No. 8 dated September 19, 2003 may also be referred.
An e-TCS return should be filed under Section 206C of the Income Tax Act in accordance with the scheme dated March 30, 2005 for electronic filing of TCS return notified by the CBDT for this purpose.
As per section 200(3)/206C, as amended by Finance Act 2005, deductors/collectors are required to file quarterly TDS/TCS statements from FY 2005-06 onwards.

CBDT has appointed National Securities Depository Limited, (NSDL), Mumbai, as e-TDS/TCS Intermediary. NSDL has established TIN Facilitation Centres (TIN-FCs) across the country to facilitate deductors/collectors file their e-TDS/TCS returns.

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