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Frequently asked question (FAQ) on TDS

What is TDS?

TDS means ‘Tax Deducted at Source’. TDS is one of the modes of collection of taxes, by which a certain percentage of amount is deducted by a person at the time of making / crediting certain specific nature of payment to the other person and deducted amount is remitted to the Government Account.

Is TDS relevant for me as a businessman?

Yes. Payments may be made to you after TDS. You can adjust this against your final tax liability. You are also required to effect TDS while making business payments. Failure to do so will result in the entire of expenditure being disallowed as your business expenditure and taxed as income.

I have made some deposits with a bank on which annual interest is around 15000. My income is below taxable limit. The banker wants to deduct tax. What do I do?

You can file a self-declaration to the banker in Form 15H stating that your income is below taxable limit. The form is available with your banker, the local Income Tax office and can be downloaded from the website www.incometaxindia.gov.in This form should be filed before the interest begins to accrue in the fixed deposit account, since the declaration has no retrospective effect.

I have let out a property for 20,000 per month. The tenant is deducting tax that is more than my tax liability. What can I do under this circumstance?

If you compute your tax liability and find it to be lower than the tax being deducted, you may approach your Assessing Officer by filing Form 13. He will issue a certificate directing the tenant to make TDS at a lesser rate. This form is available with the local Income Tax office or can be downloaded from the website www.incometaxindia.gov.in

I have deducted tax from payments disbursed but used the same for some urgent financial needs. What are the consequences?

It is an offence to misuse Tax Deducted at Source. It should have been remitted to government account within the specified time limit. Failure to deposit TDS attracts levy, interest, penalty and also rigorous imprisonment up to seven years.

If the employer does not deduct tax and employee also does not pay his due tax, who will be held responsible for tax payment?

The ultimate responsibility to pay tax rests on the person who has earned income. If the employee deposits such tax then the employer will be liable for interest and penalty for failure to deduct tax.

I am buying a property from a person residing in USA. Should I deduct tax while making payment?

Yes, u/s 195. In case you have any doubt regarding the amount on which TDS is to be made, you may file an application with the officer handling non-resident taxation who will pass an order determining the TDS to be made. Alternatively, if the recipient feels that the TDS is more he may file an application with his Assessing Officer for non-deduction.

Can I use PAN to pay the TDS deducted into government account?

No. You are required to have a separate Tax Deduction Account Number (TAN) by making an application in Form 49B with the TIN facilitation center of NSDL.

Is Income Tax Act applicable only to residents?

No, Income Tax Act applies to all persons who earn income in India, whether they are resident or non-resident.

Who is a resident?

If an individual stays in India for 182 days or more in a year, he / she is treated as resident in that year regardless of his citizenship. If the stay is less than 182 days, he /she is a non-resident.

How can I know whether a company is resident or non-resident?

A company is considered as resident if it is incorporated under the Indian Companies Act. A foreign company can also become a ‘resident’ if the control and management of its affairs is done entirely in India during the previous year.

How is resident / non-resident status relevant for levy of income tax?

In case of resident individuals and companies, their global income is taxable in India. However, non-residents have to pay tax only on the income earned in India or from a source / activity in India.

Source: TRACES

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Invalid / Not Available PANs reported consistently while submitting TDS Statements – CPC(TDS)

CPC(TDS) has issued a reminder communication to all deductors regarding invalid/non available PANs. The issued communication has been given below:

Dear Deductor,

CPC(TDS) has observed from its records that you have consistently reported Invalid / Not Available PANs in the Quarterly TDS Statements submitted during the period from Q4, 2012-13 to Q3,2013-14. Please note that you are amongst deductors, who have reported highest number of above mentioned incorrect PAN records in their TDS Statements.

Please refer to the following details with respect to Invalid PANs reported in your TDS Statements:

Deductor’s 
TAN

Count of PAN Errors 
Q4,2012-13

Count of PAN Errors 
Q1,2013-14

Count of PAN Errors 
Q2,2013-14

Count of PAN Errors 
Q3,2013-14

         

Implications of reporting Invalid/ Not Available PANs in TDS Statements :

  • The Deductor will not be able to provide TDS certificate to the deductee, if valid PANs are not reported.
  • The correct deductee will not be able to avail the credit of TDS deducted for taxes deducted.
  • Under section 277 of the Income Tax Act, 1961, if a person makes a statement in any verification under this Act or under any rule made there under, or delivers an account or statement which is false, and which he either knows or believes to be false, or does not believe to be true, is punishable.

Actions to be taken :

  • Please note that Correct reporting at the first instance will help in avoiding submitting Correction Statements.
  • In case of any errors observed in reporting, the Corrections must be reported at the earliest to avoid unwarranted delays.
  • The Deductor must ensure that the PANs for deductees reported in TDS Statements are valid and correct. TAN-PAN Master can be downloaded from TRACES and should be used to file statements to avoid quoting of incorrect PANs.Please Login to TRACES and navigate to “Dashboard”to locate “PAN Verification” in the Quick Links menu. The functionality to download Consolidated TAN – PAN File has also been provided that includes all the PANs attached with the respective TANs.
  • You can use the facility of Online Corrections at TRACES with Digital Signature. Please refer to e-tutorials for assistance.

It is advised to avoid submitting TDS Statements with Invalid PANs and take corrective actions at the earliest.

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

CPC (TDS) TEAM

 

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Points to remember before filing the quarterly TDS statement

Given below are the points one should remember before filing quarterly TDS statement:
  • Correct Reporting: Cancellation of TDS statement and deductee row is no longer permissible. Accordingly, it is very important to report correct and valid particulars (TAN of the deductor, Category (Government / Non-Government) of the deductor, PAN of the deductees and other particulars of deduction of tax) in the quarterly TDS statement
  • Quote correct and valid lower rate TDS certificate in TDS statement wherever the TDS has been deducted at lower / zero rate on the basis of certificate issued by the Assessing Officer
  • Last provisional receipt number to be quoted in regular TDS / TCS statements: While filing new regular (original) TDS statement, it is mandatory to quote the last accepted provisional receipt number of the regular quarterly TDS / TCS statement of any form type
  • TDS statement cannot be filed without quoting any valid challan and deductee row
  • Late filing fee, being statutory in nature, cannot be waived
  • Download PAN Master from TRACES and use the same to file new statement to avoid quoting of incorrect and invalid PAN
  • Validate PAN and name of fresh deductees from TRACES before quoting it in TDS statement
  • Download TDS certificate (Form16A) from TRACES (http://www.tdscpc.gov.in) bearing unique TDS certificate number and issue to the taxpayers within due date
  • File correction statements promptly in case of incomplete and incorrect reporting
  • Download the justification report to know the details of TDS defaults, if any, on processing of TDS statement
  • Do view your Dashboard regularly to know about your TDS performance
  • Government deductors should obtain BIN (Book Identification Number) from their Accounts Officer (AIN holder) in time and quote the same correctly in TDS statement
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FAQ on Form 26AS

What is Form 26AS?

It is a form issued under Rule 31AB, wherein the following information in relation to a PAN is published:

  • TDS – Part A & A1 of Form 26AS
  • TCS – Part B of Form 26AS
  • Details of tax paid other than TDS / TCS – Part C of Form 26AS
  • Details of Refund – Part D of Form 26AS
  • Details of AIR transactions – Part E of Form 26AS 

From which Assessment Year (AY) can I view my Form 26AS on TRACES?

You can view your Form 26AS in TRACES from AY 2009-10 onwards. 

How is Form 26AS important to a deductor and tax payer?

The TDS / TCS deducted by a deductor is reflected in Form 26AS of the respective PAN and this helps in identifying any discrepancy / error. Although deductor cannot view Form 26AS for a PAN, they can view the TDS / TCS deducted / collected by them.

The credits available in the tax statement confirm that:

  • The tax deducted / collected by the Deductor / Collector has been deposited to the account of the government
  • The Deductor / Collector has accurately filed the TDS / TCS return giving details of the tax deducted/collected on your behalf
  • Bank has properly furnished the details of the tax deposited by you
  • In future, you will be able to use this consolidated tax statement (Form 26AS) as a proof of tax deducted / collected on your behalf and the tax directly paid by you along with your income tax return, after the need for submission of TDS / TCS certificates and tax payment challans along with income tax returns has been dispensed with by the Income Tax Department (ITD) 

What is the period for which Form 26AS is generated?

Form 26AS is generated annually, for a Financial Year. 

Who can view Form 26AS?

Only a registered PAN holder can view their Form 26AS on TRACES. Form 26AS can be viewed from FY 2008-09 onwards. 

What is booking status in Part A of Form 26AS?

The various booking status available in Part A of Form 26AS in are:

  • F – Final
    • When payment details of TDS / TCS deposited in banks by deductors match with payment details mentioned in the TDS / TCS statement filed by deductor, status is displayed as Final (F)
  • O – Over booked
    • When payment details of TDS / TCS deposited in bank by deductor have matched with details mentioned in the TDS / TCS statement but the amount is over claimed in the statement, status is displayed as Overbooked (O). Final (F) credit will be reflected only when deductor reduces claimed amount in the statement or makes new payment for excess amount claimed in the statement
  • U – Unmatched
    • When payment details mentioned in the statement by deductor cannot be matched or found in OLTAS / banks, status is updated as Unmatched (U)
  • P – Provisionally Booked
    • In the case of Government deductors who make book entry for TDS / TCS payment, details are updated in G-Oltas by filing Form 24G. When the Government deductor files TDS / TCS statements and mentions BIN details and these do not match with G-Oltas data, status is updated as Provisionally Matched (P)

How can I correct if the name and address details given in Form 26AS are incorrect?

You can get the Data corrected by applying in TIN for changes or correction in PAN Data. This request can be made either online or through the existing network of TIN-FCs. 

Can I download my Form 26AS statement?

Yes. Form 26AS statement can be downloaded either as PDF / text / excel file. If number of records in Part A / Part B is less than 20,000, Form 26AS can be downloaded as PDF / excel file or viewed as HTML on the screen.

For records greater than 20,000, Form 26AS cannot be viewed as HTML and it also cannot be downloaded as PDF / excel file. You have to download Form 26AS as a text file. 

What should Tax Payer do in case details of tax deducted are not appearing in Form 26AS?

Details of tax deducted will appear only after submission of TDS statement by the corresponding deductor. In this case, deductor should be approached to ensure filing of TDS statement with correct PAN. 

What if entries in Form 26AS that do not pertain to the deductee?

The respective deductor should be approached for filling correction statement. In case of advance tax / regular tax / self-assessment tax, the jurisdictional AO may be approached for necessary correction. 

Whether name and address of Tax Payer can be changed in Form 26AS?

Tax Payer details (name and address) in Form 26AS are reflected as per PAN database. For any change, please submit change request application for PAN (Form 49A) at www.tin-nsdl.com

What is the password for opening Form 26AS?

The password for opening Form 26AS will be your Date of Birth (in DDMMYYYY format), e.g., if your date of birth is 01-Feb-1980, password will be 01021980. 

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