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CPC (TDS) follow up communication regarding the use of Online Correction facility

CPC (TDS) has released a follow up communication regarding Online Correction facility not availed after sending “Intermediate Communication for Short Payments” in course of processing of Original Quarterly TDS Statements.

The issued communication has been given below:

Dear Deductor,(TAN XXXXXXXXXX)

As per the records of CPC (TDS), an Intermediate communication was sent to you intimating Short Payment errors in the Original TDS Statements filed by you during January 1 – February 10, 2015 and you were requested to use Online Correction facility at TRACES for closure of the above within a week of receipt of above communication.

However, after the above was communicated to you, no actions were taken using Online Correction functionality (without Digital Signatures) to correct above errors.

There may be a possibility that the above communication could not reach you due to incorrect email/ Mobile number provided and you are requested to correctly report the above in your TDS Statements.

Also, CPC (TDS) intends to collect your feedback to understand any challenges in using the Online Correction facility to correct potential errors. You are, therefore, requested to provide us the reason by sending your response to info@tdscpc.gov.in

You are also requested to submit a Correction Statement, without any further loss of time, to close the Short Payment Defaults in your Original TDS Statement(s).

Please note that

  • This further significance towards ensuring non-intrusive TDS Compliance, since, Short Payment Defaults ought to be closed at the time of submitting requests to download Consolidated Files or TDS Certificates from the web portal TRACES.
  • The onus for closure of Short Payment Defaults lies on the deductor submitting the TDS Statements.

Your attention is also drawn to the essence of above communication and the advantages of taking actions with Online Correction feature:

  • You would have preliminary information of potential Short Payments, before the Original Statement is completely processed for Defaults and Intimations are generated
  • The central point in the process is identification of errors in challans and facilitating their corrections before CPC (TDS) computes defaults in TDS statements
  • Correction of above defaults using Online Correction can be submitted within 7 days of receipt of the Intermediate Communication, before computation of Defaults for the referenced TDS statements
  • The above actions Above action will facilitate avoidance of multiple Correction Statement filing later, after the defaults are identified CPC (TDS) and Intimations have been sent.

What Action to be taken on receipt of Intermediate communication:

  • Please take note of the Intermediate communication from CPC (TDS) and submit Online Correction for potential defaults in TDS statement within the stipulated time frame.
  • Only “Online Correction” facility can be used for correction of above Short Payments and PANs

To avail the facility, you are requested to Login to TRACES and navigate to Defaults tab to locate Request for Correction from the drop-down menu. For any assistance, please refer to the e-tutorial available on TRACES.

  • The action requires to be completed within 7 days of receipt of the Intermediate Communication.

It is hoped that you will avail of the time window to correct errors, if any, going forward.

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

CPC (TDS) TEAM

Source: TRACES

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CPC (TDS) communication: Intimation regarding Outstanding TDS demand on account of Short Payments from FY 2007- 08 onwards – Reg.

To 

M/s. __________________
TAN:__________________
Address:_______________
_______________________
_______________________ 

     CPC (TDS) communication: Intimation regarding Outstanding TDS demand on account of Short Payments from FY 2007-08 onwards- Reg.

Please refer the subject mentioned above.

  • As per the records of the Centralized Processing Cell (TDS), there is an outstanding demand from FY 2007-08 onwards, exceeding Rupees XX Crore in aggregate, on account of Short Payment defaults identified in the TDS statements filed by you.
  • Intimation u/s 154 read with section 200A of the Income Tax Act, 1961 intimating the outstanding demand for different years has already been sent by Income Tax Department on Registered email address and by post, at the address, as mentioned in the relevant TDS Statement.
  • Justification report for TDS defaults can be downloaded TDS statement wise from the web portal TRACES. (www.tdscpc.gov.in).
  • Short payment default may be on account of mismatch in challan particulars, as quoted by you in TDS statement and challan particulars as per OLTAS. You are requested to close the Short Payment Defaults through “Tagging” of correct challan or “Move Deductee rows” facility using “Online Corrections” at TRACES (www.tdscpc.gov.in). In case of any clarification, you may contact your assessing officer and can also send e-mail at info@tdscpc.gov.in.
  • It is to inform that while downloading TDS certificate (Form 16/16A), you would be prompted to first close the ‘Short Payment’ default, if any. As the next due date for download of form 16/ 16A is 30th May 2015, you are requested to close your defaults well in advance to avoid any issue in downloading of TDS certificates for last quarter of FY 2014-15.                                                                                              

Tarun Jarwal
Deputy Commissioner of Income Tax
Central Processing Cell – TDS   

For any ,you can write to info@tdscpc.gov.in or call our toll-free number 0120-4816103.

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

CPC (TDS) TEAM

Source: TRACES

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Budget 2015-16: Relaxing the requirement of obtaining TAN for certain deductors

Under the provisions of section 203A of the Act, every person deducting tax (deductor) or collecting tax (collector) is required to obtain Tax Deduction and Collection Account Number (TAN) and quote the same for reporting of tax deduction/collection to the Income-tax Department. However, currently, for reporting of tax deducted from payment over a specified threshold made for acquisition of immovable property (other than rural agricultural land) from a resident transferor under section 194-IA of the Act, the deductor is not required to obtain and quote TAN and he is allowed to report the tax deducted by quoting his Permanent Account Number (PAN). The obtaining of TAN creates a compliance burden for those individuals or Hindu Undivided Family (HUF) who are not liable for audit under section 44AB of the Act. The quoting of TAN for reporting of Tax Deducted at Source (TDS) is a procedural matter and the same result can also be achieved in certain cases by mandating quoting of PAN especially for the transactions which are likely to be one time transaction such as single transaction of acquisition of immovable property from non-resident by an individual or HUF on which tax is deductible under section 195 of the Act. To reduce the compliance burden of these types of deductors, it is proposed to amend the provisions of section 203A of the Act so as to provide that the requirement of obtaining and quoting of TAN under section 203A of the Act shall not apply to the notified deductors or collectors.

This amendment will take effect from 1st June, 2015. 

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Budget 2015-16: Rationalisation of provisions relating to tax deduction at source (TDS) and tax collection at source (TCS)

Under Chapter XVII-B of the Act, a person is required to deduct tax on certain specified payment at the specified rate if the payment exceeds the specified threshold. The person deducting tax (‘the deductor’) is required to file a quarterly Tax Deduction at Source (TDS) statement containing the details of deduction of tax made during the quarter by the prescribed due date. Similarly, under Chapter XVII-BB of the Act, a person is required to collect tax on certain specified receipts at the specified rates. The person collecting tax (‘the collector’) also is required to file a quarterly Tax Collection at Source (TCS) statement containing the details of collection of tax made during the quarter by the prescribed due date.

 In order to provide effective deterrence against delay in furnishing of TDS/TCS statement, the Finance Act, 2012 inserted section 234E in the Act to provide for levy of fee for late furnishing of TDS/TCS statement. The levy of fee under section 234E of the Act has proved to be an effective tool in improving the compliance in respect of timely submission of TDS/TCS statement by the deductor or collector.

Finance (No.2) Act, 2009 inserted section 200A in the Act which provides for processing of TDS statements for determining the amount payable or refundable to the deductor. However, as section 243E was inserted after the insertion of section 200A in the Act, the existing provisions of section 200A of the Act does not provide for determination of fee payable under section 234E of the Act at the time of processing of TDS statements. It is, therefore, proposed to amend the provisions of section 200A of the Act so as to enable computation of fee payable under section 234E of the Act at the time of processing of TDS statement under section 200A of the Act.

Currently, the provisions of sub-section (3) of section 200 of the Act enable the deductor to furnish TDS correction statement and consequently, section 200A of the Act allows processing of the TDS correction statement. However, currently, there does not exist any provision for allowing a collector to file correction statement in respect of TCS statement which has been furnished. It is, therefore, proposed to amend the provisions of section 206C of the Act so as to allow the collector to furnish TCS correction statement.

Currently, there does not exist any provision in the Act to enable processing of the TCS statement filed by the collector as available for processing of TDS statement. As the mechanism of TCS statement is similar to TDS statement, it is proposed to insert a provision in the Act for processing of TCS statements on the line of existing provisions for processing of TDS statement contained in section 200A of the Act. The proposed provision shall also incorporate the mechanism for computation of fee payable under section 234E of the Act.

Under the existing provisions of the Act, after processing of TDS statement, an intimation is generated specifying the amount payable or refundable. This intimation generated after processing of TDS statement is (i) subject to rectification under section 154 of the Act; (ii) appealable under section 246A of the Act; and (iii) deemed as notice of demand under section 156 of the Act. As the intimation generated after the proposed processing of TCS statement shall be at par with the intimation generated after processing of TDS statement, it is, further, proposed to provide that intimation generated after processing of TCS statement shall also be—

(i) subject to rectification under section 154 of the Act;
(ii) appealable under section 246A of the Act; and
(iii) deemed as notice of demand under section 156 of the Act.

Further, as the intimation generated after proposed processing of TCS statement shall be deemed as a notice of demand under section 156 of the Act, the failure to pay the tax specified in the intimation shall attract levy of interest as per the provisions of section 220(2) of the Act. However, section 206C (7) of the Act also contains provisions for levy of interest for non-payment of tax specified in the intimation to be issued. To remove the possibility of charging interest on the same amount for the same period of default both under section 206C (7) and section 220(2) of the Act, it is proposed to provide that where interest is charged for any period under section 206C (7) of the Act on the tax amount specified in the intimation issued under proposed provision, then, no interest shall be charged under section 220(2) of the Act on the same amount for the same period.

Under the existing scheme of payment of TDS and TCS, Government deductors/collectors are allowed to make payment of tax deducted/collected by them without production of challan i.e. through book entry. For payment of tax deducted/collected through book entry, the Drawing and Disbursing Officer (DDO) intimates the TDS/TCS amount to the Pay and Accounts Officer or the Treasury Officer or the Cheque Drawing and Disbursing Officer (PAO/TO/CDDO) who credits the TDS/TCS amount to the credit of Central Government through book entry. For generating credit for TDS/TCS paid through book entry by the Government deductors, a system of capturing information from PAO/TO/CDDO has been introduced by amending rule 30 and rule 37CA of the Income-tax Rules, 1962 with effect from 1.4.2010. The said rules provide that the PAO/TO/CDDO shall file the detail of payment of TDS/TCS made through book entry in the prescribed Form 24G. This system of reporting of payment of TDS/TCS made through book entry has improved the mechanism of reporting of TDS/TCS by the Government deductor to some extent. However, in the absence of any specific provisions in the Act for enforcing the same, it has been noticed that in a large number of cases, PAO/ TO/CDDOs do not file Form 24G in prescribed time. Delay in furnishing of the Form 24G results into delay in furnishing of the TDS/TCS statement by the DDO. In order to improve the reporting of payment of TDS/TCS made through book entry and to make existing mechanism enforceable, it is proposed to amend the provisions of sections 200 and 206C of the Act to provide that where the tax deducted [including paid under section 192(1A)] / collected has been paid without the production of a challan, the PAO/ TO/CDDO or any other person by whatever name called who is responsible for crediting such sum to the credit of the Central Government, shall furnish within the prescribed time a prescribed statement for the prescribed period to the prescribed income-tax authority or the person authorised by such authority by verifying the same in the prescribed manner and setting forth prescribed particulars. To ensure compliance of this proposed obligation of filing statement, it is proposed to amend the provisions of section 272A of the Act so as to provide for a penalty of Rs.100/- for each day of default during which the default continues subject to the limit of the amount deductible or collectible in respect of which the statement is to be furnished.

Under section 192 of the Act, the person responsible for paying (DDO) income chargeable under the head “salaries” under the Act is authorised to allow certain deductions, exemptions or allowances or set-off of certain loss as per the provisions of the Act for the purposes of estimating income of the assessee or computing the amount of the tax deductible under the said section. The evidence/proof/particulars for some of the deductions/exemptions/allowances/set-off of loss claimed by the employee such as rent receipt for claiming exemption of HRA, evidence of interest payments for claiming loss from self occupied house property etc. is generally not available with the DDO. In these circumstances, the DDO has to depend upon the evidence/particulars furnished, if any, by the employees in support of their claim of deductions, exemptions, etc. As the existing provisions of the Act do not contain any guidance regarding nature of evidence/documents to be obtained by the DDO, there is no uniformity in the approach of the DDO in this matter. In order to bring clarity in this matter, it is proposed to amend the provisions of section 192 of the Act to provide that the person responsible for paying, for the purposes of estimating income of the assessee or computing tax deductible under section 192(1) of the Act, shall obtain from the assessee evidence or proof or particulars of the prescribed claim (including claim for set-off of loss) under the provisions of the Act in the prescribed form and manner.

The existing provisions of sub-section (6) of section 195 of the Act provide that the person referred to in section 195(1) of the Act shall furnish prescribed information. Section 195(1) of the Act provides that any person responsible for paying any interest( other than interest referred to in sections 194LB or 194LC or 194LD of the Act) or any sum chargeable to tax (not being salary income) to a non-resident, not being a company, or to a foreign company, shall deduct tax at the rates in force. The mechanism of obtaining of information in respect of remittances fulfils twin objectives of ensuring deduction of tax at appropriate rate from taxable remittances as well as identifying the remittances on which the tax was deductible but the payer has failed to deduct the tax. Therefore, obtaining of information only in respect of remittances which the remitter declared as taxable defeats one of the main principles of obtaining information for foreign remittances i.e. to identify the taxable remittances on which tax was deductible but was not deducted. In view of this, it is proposed to amend the provisions of section 195 of the Act to provide that the person responsible for paying any sum, whether chargeable to tax or not, to a non-resident, not being a company, or to a foreign company, shall be required to furnish the information of the prescribed sum in such form and manner as may be prescribed. Further, currently there is no provision for levying of penalty for non-submission/inaccurate submission of the prescribed information in respect of remittance to non-resident. For ensuring submission of accurate information in respect of remittance to non-resident, it is further proposed to insert a new provision in the Act to provide that in case of non-furnishing of information or furnishing of incorrect information under sub-section (6) of section 195(6) of the Act, a penalty of one lakh rupees shall be levied. It is also proposed to amend the provisions of section 273B of the Act to provide that no penalty shall be imposable under this new provision if it is proved that there was reasonable cause for non-furnishing or incorrect furnishing of information under sub-section (6) of section 195 of the Act.

These amendments will take effect from 1st June, 2015. 

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