TDS/TCS Compliances for 3rd Quarter of F.Y. 2012-13

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TDS (Tax Deducted at Source) is one of the modes of collectingincome tax from the assessees in India. This is governed under Indian Income Tax Act, 1961, by the Central Board for Direct Taxes (CBDT) and is part of the Department of Revenue managed by Indian Revenue Service (IRS), Ministry of Finance, Govt. of India.

In simple terms, TDS is the amount of tax getting deducted from the person (Employee / Deductee) by the person paying (Employer/Deductor).

It is very important to file TDS returns on time because late filing can result in paying late filing fees according to Section 234E

Mandatory Fees and Penal provisions:

Therefore, file your TDS returns properly and on time to avoid penalty for late filing of TDS returns.

TDS/TCS Compliances for 3rd Quarter of F.Y. 2012-13

  • Last date for payment of tax deductions/collections for December 2012 – 7th January, 2013
  • Last date of filing of TDS/TCS returns for Q3 of F.Y. 2012-13 – 15th January, 2013
  • Last date for issuance of the TDS/TCS certificates for Q3 – 30th January, 2013

It is recommended to use TDSMAN software for filing TDS and TCS returns as per TIN Nsdl format. This TDS software enables eTDS & eTCS return generation of all types of forms – 24Q, 26Q, 27Q, 27EQ & also prints TDS certificate – form 16, form 16A.

Some of its features are:

  • Supports unlimited deductors / companies, deductees, employees
  • Preparation of eTDS & eTCS returns for Forms 24Q, 26Q, 27Q, 27EQ
  • Auto-generation of Form 16, 16A, 27A, 27B, 27D
  • Printing of TDS, TCS certificates – 16, 16A, 27D
  • Interface for online requests to TIN
  • In-built utility for Import / Export of data from MS-Excel
  • Option of importing / retrieving data from Consolidated files
  • Data backup and restore facility
  • integrated File Validation Utility (FVU)
  • Generation & printing of various types of customized utility reports
  • Report generation in PDF formats
  • Online updates
  • Challan verification

Use the TDSMAN Software (FY: 2012-13) for easy filing of your fourth quarter eTDS / eTCS returns. TDSMAN (FY: 2012-13) is priced at Rs. 2500/– only and covers the financial year 2012-13 and all earlier years till 2005-06. During the course of the year, all statutory updates & changes in the software will be provided to you for free.  Click here to order now

To download free trial of TDSMAN software click here

To watch video demo of  TDSMAN software  click here

To place an order for TDSMAN software  click here

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No penalty & interest for non deduction of TDS if deductee-payee having no tax liability

There cannot be any dispute that an assessee who is having losses cannot be compelled to pay the income-tax, as the Income-tax Act does not provide for such a situation, exception being the MAT provisions in the case of companies. What is required to be seen as per the circular issued by CBDT and which was approved by Supreme Court in Hindustan Coca Cola Beverage (P.) Ltd. v. CIT [2007] 293 ITR 226, is that Taxes due have been paid by the deductee-assessee. Therefore, the question of payment of tax does not arise, if there is no tax liability at all. Accordingly, in the instant cases, the question of liability for tax or tax due in the hands of partnership firms does not arise, if they had declared losses in the returns of income. Subject to verification of the fact of filing return of income by the partnership firms by duly including the interest paid by the assessees, the penalty levied under section 201(1) in their hands is liable to be deleted i.e., if the assessed income in the hands of the concerned partnership firms is loss, then the date of filing of return is to be considered as the date of deemed payment of tax due.


TDS under Section 194A deductible on Interest Paid by partner to its Firm :-
sec. 194A provides exemption from the obligation imposed under that section only in respect of interest paid/credited by a firm to its partner. The Act does not provide such exemption to the interest paid/credited by a partner to his firm.

The Ld A.R has contended that the position of legal relationship between the partners and the partnership firms as prevailing under the Partnership Act should be applied for the purposes of sec. 194A of the Act also. However, we are convinced with the contentions put forth by Ld D.R. that the Income tax Act, being taxing statute, should be subjected to strict interpretation. There cannot be any dispute that the Income tax Act recognizes a partner and a partnership firm as different Person, despite the legal position of relationship between them as prevailing under the Partnership Act. Further sec. 194A provides exemption from the obligation imposed under that section only in respect of interest paid/credited by a firm to its partner. The Act does not provide such exemption to the interest paid/credited by a partner to his firm. In the absence of any provision to provide for such exemption and further by considering the fact that the Act treats a partner and a firm as different Person, we are of the view that the position of legal relationship between a partner and his firm looses its importance/significance under the Income tax Act. Accordingly, we are of the view that the said position of legal relationship as prevailing under the Partnership Act should not be applied in abstract, only to the provisions of sec. 194A of the Act. Accordingly, we reject all the contentions raised by the assessee in this regard.

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Banks suggest reintroduction of deduction u/s. 80CCF & increase in 194A TDS limit

Existence of Efficient Financial Markets is Paramount for Achieving Economic Growth: FM

The Union Finance Minister Shri P .Chidambaram said that existence of efficient financial markets i.e. both banks and capital markets, is paramount for achieving economic growth. He said that without vibrant and viable financial market architecture, there cannot be any sustainable economic growth. The Finance Minister said that efficient intermediation by financial markets lead to higher economic growth by increasing savings and their optimal allocation for productive uses. Shri Chidambaram said that banks and other intermediaries including Non-Banking Financial Companies (NFBCs), Insurance and Pension Funds and Mutual Funds etc. are mechanisms to channel savings to investment. They have the capacity to promote economic growth as they allocate savings to those investments which have potential to yield higher returns, the Minister added. The Finance Minister Shri P.Chidambaram was making his opening remarks during his fourth pre-budget consultation meeting with representatives of banking and financial institutions here today. The Finance Minister further said that major steps have been taken to reform India regulatory framework to adopt best international practices. Reforms in equity markets lead the market development process. The Finance Minister said that results of the reforms taken by the Government are encouraging and the country is now one of the most vibrant and transparent markets in the world.

Along with the Finance Minister, both the Minister of State for Finance Shri S.S. Palanimanickam and Shri Namo Narain Meena, Adviser to the Finance Minister, Shri Parthasarthy Shome, Finance Secretary, Shri R.S. Gujral, Secretary, Financial Services & Disinvestment, Shri D.K. Mittal, Revenue Secretary, Shri Sumit Bose, Secretary, Department of Economic Affairs, Shri Arvind Mayaram, Chief Economic Adviser, Dr. Raghuram R. Rajan, and Chairperson, CBEC were present among others.

About 22 participants representing different Banking and Financial Institutions participated in the aforesaid meeting. The major participants included Dr. K.C. Chakraborty, Deputy Governor, Reserve Bank of India, Shri Pratip Chauduri, Chiarman,State Bank of India, Shri M. Narendra, CMD, Indian Overseas Bank, Shri K.R. Kamath, CMD, Punjab National Bank, Shri Arun Kaul, CMD, UCO Bank, Shri M.V. Tanksale, CMD, Central Bank of India, Shri R.M. Malla, CMD, IDBI, Shri Prakash Bakshi, Chairman,NABARD, Shri D.K. Mehrotra, Chairman, LIC, Shri G. Srinivasan, New India Insurance, Shri T.C.A. Ranganathan, E CMD, XIM Bank, Shri S.K. Goel, IIFCL, Ms. Chanda Kochhar,CEO, ICICI Bank, Shri R.V. Verma, CMD, National Housing Bank, Shri Sunil Kaushal, Standard Chartered Bank, Shri Uday Kotak, Kotak Mahindra Bank Ltd, Shri Atul Kumar Rai, IFCI, Ms Shikha Sharma, CEO, Axis Bank, Shri Rana Kapoor, YES Bank, Shri Raman Aggarwal, FIDC, Shri Deepak S. Parekh, IDFC and Shri D. Krishna, Urban Cooperative Banks.

The participants made various suggestions and recommendations for consideration of the Finance Minister for the forthcoming Union Budget 2013-14. These proposals and recommendations include extension of Agriculture Interest Subvention Scheme to Self Help Groups, interest amount for the purpose of TDS be increased from Rs. 10,000/- to Rs. 25,000/- on fixed term deposits with banks, tax exemption of Rs. 20,000/- under section 80CCF for investing in Infrastructure Tax Free Bonds be reintroduced, bringing more transparency in gold and real estate transactions at par with equity transactions, to bring housing sector within the definition of infrastructure and encouraging long term funds for investment in housing sector among others.

Other suggestions and proposals include to allow banks to issue tax free infrastructure bonds, treat Urban Cooperative Banks at par with those in rural areas, to exempt social security insurance schemes from service tax and tax concession on contribution to leave encashment as on group gratuity etc.

Beside above, some other suggestions were to include NBFCs and AFC (Asset Financing Companies) for promoting financial inclusion and grant them tax parity with banks by extending service tax benefits which are available to banks & public financing intuitions etc but not extended to NBFCs, giving exemption to NBFCs-AFCs from TDS under section 194A from the Income Tax Act and tax benefit for income deferral under section 43D and allowing depreciation @ 30-50 per cent for construction equipments among others.

Some other proposals include monetizing of the real estate assets of the railways and central government Ministries/Departments, inclusion of different subsidies in direct benefit transfer scheme, exemption from PAN for TDS in case of small investors in rural areas and boost to asset reconstruction companies among others.

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How to register your TAN at TRACES: FAQ

      27 Comments on How to register your TAN at TRACES: FAQ

TRACES stands for TDS Reconciliation Analysis and Correction Enabling System and has been set up by TDS Centralised Processing Cell of the income-tax department.

TRACES will integrate the following components:

  • Tax information Network
  • Automated TDS Challan Matching
  • TDS Defaults Processing
  • IVR/ Call Centre
  • Web Portal

New Web Portal : https://www.tdscpc.gov.in

How to register at TRACES, FAQ is given below:

I am a registered user in TIN. How do I login to TRACES?

If you already have a TAN Account in TIN, you can use the existing User Id and Password as in TIN to login to TRACES. However, if you are not able to register on TRACES using existing User Id and Password, you can register as new user on TRACES.

 I am a registered user at TIN but I have forgotten my User Id and / or Password. How do I register on TRACES?

If you are not able to register on TRACES using your TIN User Id and Password (for your TAN Account), please register as a new user. Click on ‘Register as New User’, select type of user as ‘Deductor’ and proceed. This will create your new profile as deductor in TRACES and you will be able to login to TRACES after you activate the account.

 How do I activate my account?

After completing registration, you will receive an activation link and activation code on your email id registered with TRACES. You will also receive an activation code through SMS on your mobile number registered with TRACES. Click on the activation link and enter User Id and the activation codes received through email and SMS and proceed. After successful activation, you can log in to TRACES. Click here  for more details.

When I provide my TAN and Token Number, I get the message ‘Invalid details’. Why?

Token Number (Provisional Receipt Number) provided must be of any accepted Regular statement filed by you on or after April 1, 2010 or of any accepted Correction statement filed by you from April 1, 2010 to October 15, 2012.

What are the details that I need to enter in the registration form?

For Deductors:

  • Step 1
    • TAN of Deductor
    • Token Number of any accepted Regular statement filed by you on or after April 1, 2010 or of any accepted Correction statement filed by you from April 1, 2010 to October 15, 2012
  • Step 2
    • Token Number of the regular statement corresponding to the Financial Year, Quarter and Form Type displayed on screen
    • Challan details of one particular CIN which has been mapped to at least three deductee rows. If there is no such challan, please enter details of challan having maximum number of deductee rows
  • Step 3
    • PAN of Deductor
    • PAN of Authorised Person (person responsible for deduction of tax at source)
    • Date of Birth of Responsible Person as in PAN database
    • Designation of Responsible Person
    • Communication Address
    • Mobile Number
    • Email Id

For Tax Payers:

  • Step 1
    • PAN of Tax Payer
    • Date of Birth as on PAN Card
    • Name as in PAN database
      • Option 1 Details from Form 26AS or salary slip (in case of salaried persons). Provide TAN of deductor who has deducted TDS / TCS, month & year of deduction and Amount of tax deducted
      • Option 2  Details of any tax paid by you. Provide Assessment Year for which payment was made by you, Challan Serial Number of the challan using which payment was made and amount as per the challan
  • Step 2
    • Communication Address
    • Mobile Number
    • Email Id

The Token Number that I have provided on Step-1 is different from the Token Number which appears on Step 2 of registration process. Why is it so?

 Token Number (Provisional Receipt Number) that is displayed on Step 2 is for the last accepted regular statement.

 In Step 1, you can enter Token Number of any accepted Regular statement filed by you on or after April 1, 2010 or of anyaccepted Correction statement filed by you from April 1, 2010 to October 15, 2012.

Hence, Token Numbers in Step 1 and Step 2 are not required to be same.

I have entered incorrect communication details (Email Id or Mobile Number) during registration. What should I do now as I am not able to activate / login to my TRACES account?

Please wait for 24 hours for your account to be deactivated and try again.

Your registration process is valid only for 24 hours and you must activate your account within this time using the activation codes sent through Email and SMS.

During registration, please ensure to verify your details in the Confirmation Screen (Step 5). In case of any incorrect details, click on ‘Edit’ to change your details.

 How can I ensure that I have entered correct communication details (Email Id or Mobile Number) during registration? Can I edit this information before submitting my registration form?

During registration, please ensure to verify your details in the Confirmation Screen (Step 5). In case of any incorrect details, click on ‘Edit’ to change your details.

What is Authentication Code?

Authentication code is generated when you clear validation details for a statement for certain functionalities such as Download Form 16 / 16A, Download NSDL Conso File, Download Justification Report, etc. Authentication code generated for a particular statement will be valid for the calendar day (i.e., an authentication code generated on 10-Dec-2012 can be used only on 10-Dec-2012 to clear validation details for the same statement. It will not be valid the next day).

 Why does TRACES have different types of Authentication Codes?

There are two types of validations after which Authentication Code will be generated.

Statement Specific Validation On this screen, details about a particular statement will be asked.

 For e.g., If you want to download NSDL Conso File for Financial Year 2010-11, Quarter 2 and Form Type 24Q, you have to provide challan details and PAN-Amount details for this statement. The Authentication Code generated will be for that particular statement

Generic Validation  On this screen, details about a generic statement will be asked.

 For e.g., If you want to update your profile, you have to provide challan details and PAN-Amount details about a generic statement will be asked. The Authentication Code generated will be for the FY, Quarter and Form Type displayed on the validation screen

It is advised to copy and save the Authentication Code so that you can reuse it for that day for the same statement.

Should I enter Authentication Code if I am trying to clear validation details for the first time during a day?

No. While trying to clear validation details for first time, you will not have the Authentication Code, hence you are not required to enter this value. You can proceed by entering other details for validation on this screen (i.e., Token Number, CIN / BIN Details and PAN-Amount). On completion of validation, Authentication Code will be generated and displayed when you proceed to next page.

Is it mandatory to enter Authentication Code?

 No. If Authentication Code has been generated for the statement for which you are filling up validation details, you can enter it in the field provided for the same. It will facilitate users to avoid filling up validation details repeatedly in case user logs in again at different time of the day. If it has not been generated or if you have not saved it, you can proceed by entering other details on this screen (i.e., Token Number, CIN / BIN Details and PAN-Amount).

 What is the advantage of Authentication Code?

Authentication Code is generated to facilitate users to avoid filling up of validation details repeatedly in case user logs in again at different time of the day.

Can I download NSDL Conso File for a quarter for which correction statement has been filed after 18-Oct-2012?

No. Such Conso file will not be available presently. Communication regarding the same will be published on TRACES once the Conso file will be available.

I am not able to download Justification Report. Why?

 Justification Reports can be downloaded till Financial Year 2011-12. Justification report will not be available if your statement has no defaults.


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