CPC (TDS) has observed that some deductors have not filed TDS Statements for FY 2013-14, despite collecting lower deduction 197 Certificates from their deductees. The CPC (TDS) has issued a communication in this regard and has suggested deductors to file TDS Statements and take appropriate action for reporting deduction of tax against certificate 197 while filing.
The issued communication has been given below:
Centralized Processing Cell (TDS) has observed from its records that you have not filed TDS Statements for Financial Year 2013-14, despite collecting lower deduction 197 Certificates from your deductees.
Please note that the obligation to report each transaction in the relevant quarter, including, where tax has been deducted at lower rates, falls on the deductor. Also, Rule 31A(4)(v) of Income Tax Rules specify to furnish particulars of amount paid or credited on which tax was not deducted in view of the issue of certificate of no deduction of tax under section 197 by the Assessing Officer of the payee.
About Certificate u/s 197:
Assessing Officer issues a certificate for lower deduction of tax:
- To the deductee, if is a resident or
- To the deductor, where the deductee is a non-resident
- If the Assessing Officer is satisfied that the total income of the deductee justifies deduction of tax at a lower rate.
Accordingly, the clause provides that the deduction shall be made in accordance with the certificate, until such certificate is cancelled by the Assessing Officer or the expiry of the validity of the certificate, whichever is earlier.
Actions to be taken for reporting deduction of tax against certificate 197:
- Please validate the PAN of the deductee submitting the certificate.
- The Certificate should be valid for the PAN, Section and Rate which has been mentioned in the statement being filed.
- Check that the certificate is valid for the relevant Financial Year.
- Verify that the threshold limit for the certificate has not been exceeded in previous quarters.
- Correct certificate number should be quoted in the statement. Example of Correct Certificate Number – 2XXXAH7XXE.
- Raise the Flag “A” in the statement for a certificate u/s 197.
- Please ensure that the Certificate Number is mentioned in the Deductee detail of the statement. (For F.Y.2013-14 Onwards)
It is therefore, suggested to file your TDS Statements and take appropriate action with respect to the above while filing. For any further assistance, you can also write to ContactUs@tdscpc.gov.in or call our toll-free number 1800 103 0344.
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