TDS Circular No. 08/2011 dated 14.10.2011 on deposits in Banks

 Circular No. 08/2011 dated 14.10.2011 on Tax Deduction at  Source on the deposits in Banks has been issued by CBDT  in the  name of The Registrar / Prothonotary and Senior Master  attached to the Supreme Court / High Court etc. during the  pendency of litigation of cliam/compensation-reg.

 CIRCULAR NO. 08/2011

F.No. 275/30/2011- IT (B)
Government ofIndia
Ministry of Finance
Department of Revenue
[Central Board of Direct Taxes]
New Delhi,the  14th  October, 2011

Subject: Tax deduction at source on the deposits in banks in the name of the Registrar/ Prothonotary and Senior Master attached to the Supreme Court/ High Court etc during the pendency of litigation of claim/compensation-reg.

Section 194A of Income Tax Act, 1961 (the Act”) stipulates deduction of tax at source (TDS)  on interest other than interest on securities if the aggregate of amount of such interest credited or paid to the account of the payee during the financial year exceeds the specified amount.

2. The Board has received references expressing difficulties in implementation of provisions of  Section 194A of the Act in a situation where in the course of the proceedings before Supreme Court/ High Court/ any other court or tribunal (hereinafter the court”), one or more than one litigant (hereinafter the depositor) is directed by the court that a specified amount (hereinafter deposit”) be deposited in the bank either directly or through the court in order to protect the interest of litigants.  Such deposits (usually time deposits) are kept in the bank in the names of Registrar/ Prothonotary and Senior Master or any other name as per the order of the court.  Difficulties are faced in making TDS on the interest periodically accruing on such deposits/ time deposits and about the person(s) as deductee who is entitled to TDS certificate in Form 16A.

3.1 The matter has been examined in the Board and it has been decided that, subject to para 4 below, this circular shall be applicable to cases where one or more than one litigant is directed by the court that a specified amount be deposited in the bank directly or through the court. The bank shall in accordance with the provisions of the Act, deduct tax at source on the interest accruing on the above mentioned deposit(s) as per existing procedure and at the rates in force. The certificate of deduction of tax shall be issued by the bank in the name of the depositor  If more than one person has been directed to deposit any specified amount, the amount of TDS shall be corresponding to each such depositor for the portion of interest accrued in its respective share in the total amount deposited and TDS certificates shall be accordingly issued by the bank.

3.2 At the time of making deposit of the amount ordered by the court, the depositor(s) shall submit a prescribed declaration with the court for record purpose and to facilitate the administration of TDS. The Registrar/ Prothonotary and Senior Master or any person authorized by the court will pass the information furnished therein to the bank concerned for TDS properly in the name of the depositor(s) in accordance with the provisions of the Act.

3.3 Some of the instances covered by this circular are:

a. In the course of appellate proceedings, the court directs an insurance company (the depositor) to deposit a part of compensation awarded by Motor Accident Claims Tribunal. This amount is deposited as Time Deposit in a bank in such name as per the directions of the court, the credit of TDS on interest accruing on such deposit will be allowed to the Insurance company which has made the said deposit. P-2 -2-

b. The Court while deciding the cases of land compensation directs the authority concerned (liable for making payment of compensation) to deposit any sum in time deposit in any bank, the TDS on time deposit shall be in the name of the authority making deposit, if such authority is an entity liable for charge to Income Tax on its income. In case the deposit in the bank is by Central or State Government no tax will be deducted.

c. The court adjudicating upon financial dispute during pendency of proceedings direct any party(ies) to deposit any amount as security in time deposit, the TDS on interest accruing on such deposit will be in name of the depositor irrespective of the fact that at the directions of the court such time deposit has been drawn in the name of the officer of the court or joint name or any other name.

4. The above procedure shall not apply to:

(a) any deposit in the bank held or dealt by the court or any other person appointed by the court in the capacity of being an administrator or receiver or any authority of similar nature; or

(b) any deposit which has not been made by any specific depositor but has arisen due to attachment made by the Court; or

(c) the cases of representative assessee” within the meaning of section 160 of the Act.

Tajbir Singh

 Under Secretary to the Govt. of India


Copy to:-

(i) The Chairman, CBDT and All members, CBDT
(ii) All CCsIT (CCA) for circulation among all officers
(iii) TheDGIT(Admn)/The DIT(TDS)
(iv) All CsIT(TDS) for information
(v) All Divisions of the CBDT



Check eTDS return default notice calculation details online

ITD has started processing of TDS returns for 2010-11 (u/s 200A) and earlier years (u/s 201). All ‘defaults’ information, those processed after 01-04-2011, are now made available at (Login after TAN registration)

The defaults will be raised as & when processed and will be kept updated in this area. It will be in a Zipped Excel sheet (no password) and quarter wise separate files will be available. (for which defaults are identified)

Deductors may also receive physical/email notices from local offices shortly.

So, the TAN registration login will now cover the below features:

  • Consolidated TDS file download and request tracking
  • Form 16A data download and utility
  • Form 15CA Submission
  • Defaults information (Mistakes/Inconsistencies)
  • Profile update

Verify TDS Deducted, Advance Tax Online before Income Tax return filing

Before filing the tax forms, you need to deposit the balance tax due and interest, if any. This amount is based on your tax liability for the year, after taking into account advance tax paid and tax deducted at source.

Lately the scope of tax deduction at source has been increased and includes salary, rent, interest, professional services etc. So, while preparing the tax returns and calculating the tax liability, you should take into account the tax amount already deducted on your behalf. Now, an easy way to do this is to refer to the 26AS statement. This statement is accessible on the NSDL site and is also available online on the websites of many banks.

According to a recent advice issued by the Income Tax Department, taxpayers should review their 26AS statements to check whether all the TDS deducted is appearing against their accounts or not. This would also facilitate faster processing of refunds, if any.



Refund Claims may be made pertaining to March 31,2009 may be submitted upto March 31, 2012

CBDT had earlier clarified that no claim of refund can be made after two years from the end of financial year in which tax was deductible at source. Now, the Board clarifies that  The refund claims pertaining to the period up to March 31, 2009 may be submitted to the Assessing Officer (TDS) up to 31.12.2012.

The following words are added at the end of paragraph 4.2 of the said circular.

However, the refund claims pertaining to the period upto March 31, 2009 may be submitted to the Assessing Officer (TDS) upto 31-12-2012.

This issues with the approval of competent authority.