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TDS :- Importance of TDS Form 16 / 16A generated by TRACES

Wednesday, October 29, 2014 | comments

Friends,    There are too many deductors in India who deduct or collect  TDS or TCS and submit their statements timely.  But they do not know about that they should have to issue Form 16 or Form 16A with in prescribed time.  If they do not do accordingly, it attracts a penalty under the provisions of section 272A of the Act of Rs. 100/- per day for delay period.   However TDS (CPC) has also communicated to all deductors vide his communication  No./Date  3/21-June-2014 which is also given below :-


Dear Deductor,

As per the records of Centralized Processing Cell (TDS), the TDS Statements have been filed by you for different quarters for the Financial Year 2013-14. However, you have not yet downloaded TDS Certificates (Forms 16/ 16A) from our portal.
Please refer to the following provisions of the Income Tax Act, 1961 in this respect:


Downloading of TDS Certificates from TRACES made mandatory:
  • In this regard, your attention is invited to the CBDT circulars 04/2013 dated 17.04.2013, No. 03/2011 dated 13.05.2011 and No. 01/2012 dated 09.04.2012 on the Issuance of certificate for Tax Deducted at Source in Form 16/16A as per IT Rules 1962. It is now mandatory for all deductors to issue TDS certificates after generating and downloading the same from "TDS Reconciliation Analysis and Correction Enabling System" or http://www.tdscpc.gov.in (hereinafter called TRACES Portal).
TDS Certificates downloaded only from TRACES hold valid:
  • In view of above circulars, it may kindly be noted that the TDS Certificates downloaded only from TRACES Portal will be valid. Certificates issued in any other form or manner will not comply to the requirements referred in the Income-tax Act 1961 read with relevant Rules and Circulars issued in this behalf from time to time.
Due Date for downloading and Penalty for non-compliance:
  • Please be advised that under the provisions of section 203 of the Income Tax Act, 1961 read with rule 31A, Certificate of tax deducted at source is to be furnished within fifteen (15) days from the due date for furnishing the statement of tax deducted at source. Failure to comply with the provisions of the Act will attract penalty under the provisions of section 272A of the Act, a sum of one hundred rupees for every day during which the failure continues.
Assistance for downloading TDS Certificates from TRACES:
  • You can logon to our Portal and refer to our e-tutorials to download TDS Certificates.
For any further assistance, you can also write to ContactUs@tdscpc.gov.in or call our toll-free number 1800 103 0344.
CPC (TDS) is committed to provide best possible services to you.

CPC (TDS) TEAM

Happy Diwali 2014

Thursday, October 23, 2014 | comments

Friends,   Happy Diwali to all of you and your's family.  


Everyone should respect their elders and love their youngers  which is great gift on Diwali for everyone.  It means we should respect everyone either he is elder or younger.


Many many happy returns of this day from TdsTaxIndia.com

Income Tax :- Solution of Notice of Defective Return under section 139(9)

Tuesday, October 21, 2014 | comments

Friends, Income Tax Department has sent notices to their assessee's regarding defective returns under section 139(9) and also given an opportunity to rectify their return.   To rectify these defective returns a link has been provided in the name of "e-file in Response to Notice u/s 139(9)" under e-File link at www.incometaxindiaefiling.gov.in. 


Requirements for submit Response of Notice u/s 139(9)
  • User id and Password of income tax e-filing website.
  • Notice issued by Income Tax Department for Defective Return u/s 139(9)
  • ITR-V of Original Return for getting Acknowledgement Number.
  • Master file of Original Return or ITR/FORM can be downloaded from   "My Returns/ Form" under "My Account"
Important Setting required for generating XML 
  • The following screen shows the accurate result in Excel File for generating XML file. 

PPF : Maturity Date , Extension Period , Loan Amount , Withdrawal Amount , Taxability of Interest from Public Provident Fund

Saturday, October 18, 2014 | comments

Friends,  A person who has PPF account should read this article.  Even I had also opened PPF account 15 years ago, but was not aware about the date of Maturity of PPF account till date.  I mean to say I had opened my account on 19-10-1999 and was in view that my account will be closed after 15 years which will be 19-10.2014.  I was happy  to get maturity amount but bank has told me that maturity date of your PPF account is 31.03.2015.  It was shocked information  for me.  Therefore I request from all PPF account holders to read the below article to know regarding Maturity Date , Extension Period , Loan Amount , Withdrawal Amount or Taxability of Interest from Public Provident Fund account.

Some General Questions regarding PPF

  1. PPF account can not be extended after 15 years completion (maturity) .
  2. PPF account can be extended for 5  years after 15 year completion (maturity) Maximum period can be 15 years.
  3. PPF account can be extended after 15 years period (maturity) for block of 5 years at a time ,as many times as you want.

More than 80 % of person selected option (2) i.e PPF account can only be extended for 5 years after completion of 15 years period  and most of them are from accounting and finance field and having Graduate or Post Graduate degrees in Finance/Accounting.

 But is Option (2) is correct ? What you think ?

Before answering the above query first you should know 

what is maturity period for PPF Account . Means how to calculate 15 years period ? 

Relevant rule is given as under[rule 9(3)]
"....any time after the expiry of 15 years from the end of the year in which the initial  subscription was made by him "
Year here means :Financial year 

So ,as per PPF rules ,15 years is to be taken from the end of initial subscription year. Means by default each PPF account is to be matured on 31st March only .

Example : PPF  Account opened on 15-10-1999 ,calculate maturity date.

Ans : As per rule given above 15 years is to be taken from end of initial subscription year . In above case end of initial  financial year is 31.03.2000 and 15 years from 31.03.2000 ends on 31.03.2015 .So maturity date in above case is 31.03.2015.

What are the option available on maturity of PPF account?

On maturity of your PPF account you have three option
  1. Withdraw full amount and closed your account .
  2. Extend your account for a block of Five years without subscription.
  3. Extend PPF account for a block of Five years with subscription.
1.Withdraw full amount : First option need not more elaboration , you can withdraw full amount on maturity and amount received will be fully exempted from Income Tax .You have to apply on Form C to withdraw the amount .Interest up to the last day of the month preceding the month in which the application for withdrawals made will be given so make sure that you should apply for withdrawal in first week of the month to avoid possible loss of interest.

2.Extend PPF account for the Block of Five years without subscription : if you wish to continue but not want to  invest further? In other words, you may wish to earn the tax-free interest but may not wish to commit further funds. That, too, is possible.This Option is automatic,means if you does not opt for  "with subscription" option in one year from the end of the maturity period ,this option without subscription will be applied automatically .

The only thing that investors should be careful of is that once an account is continued without contribution for any year, the subscriber cannot change over to with-contributions extension. [Notification F.3(6)-PD/86 dt 20.8.86].

Withdrawal of balance Amount : In case the account is extended without contribution, any amount can be withdrawn without restrictions.(use form C) However, only one withdrawal is allowed per year. The balance will continue to earn interest till it is completely withdrawn.(Clarification 7 to Clause 9(3A) of the PPF Scheme, 1968).

So you can withdraw full amount in you account any time during extend time.

3. Extension of PPF account With Further Subscription:As per the PPF rulebook:
“Subject to the provisions of sub-paragraph (3) a subscriber may, on the expiry of 15 years from the end of the year in which the initial subscription was made but before then expiry of one year thereafter, may exercise an option with the Accounts Office in Form H, or as near thereto as possible, that he would continue to subscribe for a further block period of 5 years according to the limits of subscription specified in paragraph 3.”
This Option must be opted on FORM -H ,with in one year from the end of the maturity period ,otherwise option without subscription will be applied automatically .

Example : PPF account opened on 21.08.2000.What is the maturity date ?when we should apply on form "H" for extension of PPF account with subscription ?

Ans :As the account was opened on 21.08.2000 ,to calculate maturity date ,15 years to be counted from end of the initial subscription year.In above example Initial subscription year is 2000-2001 and ends on 31.03.2001.

15 years from 31.03.2001 ends on 31.03.2016,so maturity date is 31.03.2016.

Extension application on Form H should be made before the end of one year from maturity date .
so in above case

Maturity date is =31.03.2016

Form H application should be made with in  : 01.04.2016 to 31.03.2017.(Download PPF account scheme Form H)

so in above case ,If  person  do not apply on form H before 31.03.2017 then his account will be extended automatically as"Extension without subscription" and can not be changed back to "Extension with subscription".

Limit of withdrawal in extended period :Coming to liquidity, an investor, continuing his account with fresh subscriptions, can withdraw up to 60% of the balance to his credit at the commencement of each extended period in one or more installment, but only one per year.(Notification F.7/2/97-NS IIdt. 9.2.1998). 

For example, say the term of your PPF account is ending on March 31, 2013. The balance at that time in the account is say Rs 20 lakh. Now, you may opt to continue the account for 5 more years (i.e. till March 31, 2018) and invest regularly as you have been.However, over the period of next five years till March 2018, you may withdraw only Rs 12 lakh which is 60% of the balance standing to your credit on March 31, 2013.Further you can withdraw only once in each year .

Correct answer :This time answer given by majority of person(more than 80 %) is incorrect and this result has come when correct answer was also available in option and most of persons who has attempted the  question is from Finance / accounting field. We have also given a hint by commenting that why persons are not selecting the Answer (1) and (3) ,even then participant stick with option two. Though CA Ritika pundir and Nilam Rathod selected the correct option . Correct answer is (3) .

As per Sec 9(3) of the PPF Scheme, at its maturity, the account can be continued for a block of 5 years. This facility is available for any number of blocks on expiry of each of the extended periods. The continuation can be with or without contribution.so We can extend PPF account after completion of 15 years by block of 5 years ,as many time as we wish . PPF is popularly known as 15 year scheme .However, after the initial period of 15 years is over, one can keep on extending the deposit for a period of 5 years at a time.

One need not start a fresh PPF account and continue it for all of 15 years.Just extend the old one for five years at a time, indefinitely.

Income Tax : - Special effort by Income Tax Department

Friday, October 17, 2014 | comments

Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes

PRESS RELEASE

15th October, 2014

In view of the large devastation caused by the recent floods in Jammu &  Kashmir, the Income tax Department is taking necessary steps to process  expeditiously the refund claims of the taxpayers residing in the state of Jammu  & Kashmir who have submitted their returns through electronic mode. Instances  have come to notice where the refund cheques could not be delivered at the  address indicated by the taxpayers in their returns due to dislocation caused by  floods.

Non-Corporate taxpayers of Jammu and Kashmir who desire to provide a new  address for delivery of their refund cheques, may log in to the e-filing site  https://incometaxindiaefiling.gov.in, and update their address through the path  Profile Setting -> My Profile-> Address. Alternatively, the taxpayers can  contact the helpdesk at Centralised Processing Centre (CPC), Bangalore at  1800 425 2229 and provide the updated address.

(Rekha Shukla)
Commissioner of Income Tax 
(M &T P)
Official Spokesperson, CBDT

Income Tax :- Refund of Income Tax

Thursday, October 16, 2014 | comments

Friends,   I have recently found that there are two many refunds are pending with Income Tax Department due to different reasons.   Some are due to Address , Bank Account Numbers , IFSC codes etc.  Keeping in view these things,  every assessee who have filed his income tax return for refund, should check "Status of Refund".   It is locked facility which can be checked with the help of User ID, Password and Date of Birth /Corporation at incometaxindiaefiling.fov.in.  Status of refund shows as shown in below picture :-

To view refund status at incometaxindiaefiling.gov.in (Click Here) required user id and p.w.
To view refund status at tin-nsdl.com                           (Click Here) no need of user id and p.w.

15th October 2014 is Last Date for Submission of TDS Return for Q2 of the F.Y. 2014-15

Wednesday, October 15, 2014 | comments

Friends,  Today i.e. 15-10-2014 is last date for submit of TDS statement of Quarter 2 of the Assessment Year 2015-16.  In case deductor do not file statement in time , he will have to deposit penalty on per day basis.  Detailed information is given below :-


Due dates for filing of TDS/TCS returns are as below:
[Subject to Extension by the CBDT for specific quarters of a particular FY]

Quarter
Form Nos. 24Q & 26Q
Form No. 27Q
Form No. 27EQ
April to June15 July15 July15 July
July to September15 October15 October15 October
October to December15 January15 January15 January
January to March15 May15 May15 May


Late filing consequences

Fees for delay in furnishing the statements: (refer section 234E of Income Tax Act) 
Effective from 1st July 2012, any delay in furnishing the eTDS statement will result in a mandatory fees of Rs. 200 per day, the total fees should not exceed the total amount of TDS made for the quarter. The late filing fee should be paid before filing such delayed eTDS statement.

Penalty for failure to furnish statements and furnishing incorrect statements: (refer section 271H of Income Tax Act)

Failure to file eTDS statement delaying more than an year or furnishing incorrect details in the statement filed like PAN, Challan and TDS Amount etc, will result in a penalty ranging from Rs. 10,000 to one lac.

NSDL Free Software for submit TDS return is available here (Click Here)

e-TDS / e-TCS : -Non reporting of 15G / 15H transaction in contravention of rule 31A (4) of Income Tax Rules read with section 200 of Income Tax Act

Friday, October 10, 2014 | comments

CPC (TDS) Team has traced that bank is not reporting proper transactions related to  15G or 15H.   Even than Flag "B" is also required for these transaction.  Keeping in view these things TDS (CPC) teams has instructed to bankers to submit correct data with appropriate Flag etc. 

To know more regarding Value of Flags (Click Here)
To,

(Bank Name)
(PAN:XXXXXXXXXX),

Dear Sir/ Madam,

Please refer the subject mentioned above.

1) In this regard, it is to inform you that ________ branches out of ________ active branches of your bank have not reported transaction of payment of interest on which tax was not deducted in view of declaration of 15G or 15H form by the payee. We are also sending a separate communication to the non-compliant branches, attached in the list.

2) __________ branches have in all reported __________ transactions involving declaration of 15G or 15H. The amount involved in such transactions is to the tune of Rs. _______ Crore for F.Y. 2013-14. Form 15G/15H can be submitted by the payee only if the income including the interest income is less than the taxable amount.

3) You are requested to reconcile the amount of Rs. ______ Crore reported by your bank branches with the interest amount paid to payees who declared 15G or 15H as per core banking solution of your bank. In case of discrepancy, it is requested that the relevant branches may be instructed on top priority to comply to the provisions of Income tax act in respect of complete & correct reporting of transactions involving 15G or 15H declaration.



Since the due date of filing Q2 2014 TDS Statements (October 15) is approaching fast, you are requested to ensure the details of 15G/H transactions from your source data and raise Flag "B" in the Original TDS Statements. Also, please ensure submission of Correction Statements for previous Quarterly TDS Statements of the branches.

CPC (TDS) is committed to provide best possible services to you.

CPC (TDS) TEAM

e-TDS / e-TCS :- Mandatory Pan Ref: for invalid or not available PAN cases

| comments

Now, it is mandatory to mention Pan Reference in which cases where PAN numbers are not valid or PAN numbers are not available.  This compulsion has been done in latest NSDL TDS RPU 4.1.  Exact words has been used by NSDL in Data Structure as under :- 


Mandatory to mention PAN reference number, in case of invalid PAN (filed no. 10 of deductee details) i.e. "PANAPPLIED", "PANINVALID" and "PANNOTAVBL"  

                          To download latest RPU 4.1 (Click Here)

e-TDS / e-TCS :- Clarity regarding Different Challan , Different Years & Different Branch

Thursday, October 9, 2014 | comments

Dear Deductor,

As per the records of the Centralized Processing Cell (TDS), it has been observed that you have used multiple challans in a month, for payment of Tax Deducted.

For Deductor's convenience, CPC(TDS) has established processing logic in the system that can accept a Single Challan for reporting of Tax Deposited in following circumstances :


  • Payment of Tax Deducted under different sections of the Income Tax Act, 1961:

     • The CPC(TDS) system gives credit of TDS against different sections of the Act, even though a specific section has been quoted in the challan.
     • Example: The challan used for payment of TDS relevant to Section 192 of the Act can also be used for the purpose of reporting tax deposited under Section 194 of the Act also. 
Situation prior to Financial Year 2012-13
Consumption of Challan in TDS Statement on the basis of Section quoted in the Challan details
Situation after Financial Year 2012-13
Section quoted in Challan, at the time of depositing Tax deducted/ collected is irrelevant for the purpose of consumption in TDS Statement.


  • Payment of Tax Deducted for different Assessment Years:

     • In case tax has been deposited more than the required tax deducted at source for a particular Assessment Year, the excess amount of tax can be claimed in the following quarters of the relevant year. The balance amount if any, can be carried forward to the next year for claim in the TDS statement.
     • Example: If excess payment of Tax has been made in Quarter 1 of financial year 2013-14, the same can be used for Quarter 2,3&4 of F.Y. 2013-14 as well as for Q1 to Q4 of F.Y.2014-15. The excess amount of tax paid in Q1 of F.Y.2013-14 can also be used for payment of tax default of Q1 to Q4 of F.Y.2012-13.
  • Different challans used for the purpose of reporting multiple Deductees associated with different branches with same TAN:

     • The deductor may have used multiple challans for reporting multiple deductees associated with different branches, in the TDS Statement.
     • A single challan can be used for the purpose of reporting Tax Deducted for such deductees.
     • Example: If a Bank has multiple branches with same TAN, payment of Tax Deducted can be made by a single challan and all the deductees can be tagged using the same.
Based on the above information, you may use a single challan in a month towards payment of Tax Deposited. For any assistance, you can also write to ContactUs@tdscpc.gov.in or call our toll-free number 1800 103 0344.
CPC (TDS) is committed to provide best possible services to you.

CPC (TDS) TEAM
 
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