TDSMAN Blog

Smart & Easy TDS Software for Preparing TDS Returns

TDSMAN Blog - Smart & Easy TDS Software for Preparing TDS Returns

Tips to avoid defaults in TDS Statements

One can avoid defaults in the TDS statements, by way of adherence to the following basic principles:   

• Timely Payment of total taxes deducted/ collected

• Correct Reporting with regard to PANs, Tax Rate and Challans

• Complete Reporting for all Deductees

• Timely filing of TDS Statements   

Following are some important facts to be adhered to, while submitting TDS statements, to avoid each type of Default:   

• Late Payment Defaults:

• Short Payment Defaults:

  • All the taxes deducted must be deposited with challan 281 quoting correct TAN, Assessment Year, Minor Head etc.
  • Challan details/BIN details quoted in the statement should be correct. Challans can be validated by using Challan Status Inquiry(CSI) file. Correct details can also be verified at TRACES in “Challan Status” menu under “Statement Status” after login.
  • There should not be any difference in the amounts quoted in “Deducted” and “Deposited” columns of the deductee rows.
  • Challans quoted in the statement must have balance available for consumption against specified deductee rows. Available balance can be verified at TRACES in “View Consumption Details” under “Statements/ Payments” menu after login.
  • Government Deductors need to report Book entry flag as “Y” in challan details.   

• Short Deduction Defaults:

  • Taxes must be deducted at correct rates specified in the Act. The Rate table can be accessed at TRACES for correct tax rates.
  • Correct flags (A, B, C, T and Y) must be raised for no deduction/ lower deduction/ higher deduction, as appropriate.
  • The PAN for deductees must be valid and correct. TAN-PAN Master can be downloaded from TRACES and be used to file statement to avoid quoting of incorrect and invalid PANs.
  • Correct and valid 197 Certificates must be specified. E-tutorial can be referred to for the purpose of validation.
  • For 24Q statements, correct flags should be raised for Woman/ Man/ Senior Citizen/ Super Senior Citizen deductees, as may be appropriate.
  • DTAA flag “B” must be raised under section 195 of the Act, at the time of filing 27Q  statements.

• Late Deduction Defaults:

  • Taxes must be deducted at the time of Payment or Credit, whichever is earlier.   

• Late Filing Defaults:   

  

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FVU 4.2 and FVU 2.138 released by NSDL

The Income Tax Department has released the following new File Validation Utilities on 26th April, 2014:

FVU version 4.2 – For Statements pertaining to FY 2010-11 onwards.
FVU version 2.138 – For Statements upto FY 2009-10.

These two FVU versions are mandatory with effect from April 26, 2014.

Click here to view the key features of FVU version 4.2
Click here to view the key features of FVU version 2.138

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Key feature of FVU version 2.138

Nil challans in TDS/TCS Statements will be permitted with no deductee records for Form 24Q Q4:

The validations with respect to Nil challan statements have been relaxed for Form 24Q Q4 for all financial years. Deductors will be permitted to submit Form 24Q Q4 for all Financial Years with NIL challans and no corresponding deductee records.  

Applicability of FVU version:

From April 26, 2014, FVU version 2.138 would be mandatory for statements pertain to FY 2007-08 to FY 2009-10.

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Key feature of FVU version 4.2

Nil challans in TDS/TCS Statements will be permitted with no deductee records for Form 24Q Q4:

The validations with respect to Nil challan statements have been relaxed for Form 24Q Q4 for all financial years. Deductors will be permitted to submit Form 24Q Q4 for all Financial Years with NIL challans and no corresponding deductee records.   

Validation for TDS amounts in case of higher deduction flag for Form 24Q pertaining to FY 2010-11 onwards:

In case deductor has provided flag for higher rate of deduction i.e., “C” in the TDS statement Form 24Q, the TDS amount for such deductee records should not be less than 20% of the amount paid/credited. This validation is also applicable for correction statement wherein new records are added. The same will not apply for those correction statements where deductee records are being updated.

Example: In case the deductor has provided higher deduction flag as “C” due to non-availability of PAN and the amount paid/credited is `10,000/-, the corresponding TDS amount deducted for this record should not be less than `2,000/ (20% of `10,000). 

Validation for field “Form 15CA Unique Acknowledgement Number (if available)” in Annexure I of Form 27Q applicable for FY 2013-14 onwards:

Validation for the field “Unique acknowledgement of the corresponding Form no 15CA (if available)” in Annexure I has been modified to permit any alpha-numeric value between 12 to 15 characters in the Form 27Q statement. 

Applicability of FVU version:

From April 26, 2014, FVU version 4.2 would be mandatory for statements pertain to FY 2010-11 onwards.

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