TDSMAN Blog

smart & easy software for eTDS & eTCS returns

TDSMAN Blog - smart & easy software for eTDS & eTCS returns

Basic principles of TDS Compliance

The following are the basic principles of TDS compliance:

  1. Deduction/ Collection of Tax at Correct Rates
  2. Timely Deposit of Tax Deducted at Source
  3. Accurate Reporting of data related to tax deductions/ collections made
  4. Submission of TDS Statements within the due dates
  5. Verification and Issuance of TDS Certificates within time
  6. CPC (TDS) is now sending “Intermediate Default Communication” for PAN Errors and Short Payments, which can be corrected during the interim period of a week of filing TDS Statements, before CPC (TDS) proceeds with computing Defaults for the relevant statement.
  7. User-friendly Online Correction facility can be used for Correction of Deductees, Tagging Unmatched Challans and Payment of Fees/ Interest. (Please 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).
  8. Aggregated TDS Compliance Report assists the PAN of the Deductor to administer TDS Defaults for associated TANs and to take appropriate action
  9. The Deductor’s Dashboard provides you all necessary information to assist you in “Compliance Self-Assessment” and to take appropriate action.
  10. Non-filing Self-declaration can be made by navigating to Statements / Payments menu and submit details under Declaration for Non-Filing of Statements.
  11. PAN Verification and Consolidated TAN – PAN File facility on TRACES can be used for verifying the deductees.
  12. The Conso Files and Justification Reports downloaded from TRACES help you to identify errors in submission of revised Quarterly TDS Statements.
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Consequences for a deductor if he fails to deduct TDS or fails to deposit it to the Government’s account

A deductor would face the following consequences if he fails to deduct TDS or after deducting the same fails to deposit it to the credit of Central Government’s account:-

a) Disallowance of expenditure

As per section 40(a)(i) of the Income-tax Act, any sum (other than salary) payable outside India or to a non-resident, which is chargeable to tax in India in the hands of the recipient, shall not be allowed to be deducted if it is paid without deduction of tax at source or if tax is deducted but is not deposited with the Central Government till the due date of filing of return.

However, if tax is deducted or deposited in subsequent year, as the case may be, the expenditure shall be allowed as deduction in that year.

Similarly, as per section 40(a)(ia), any sum payable to a resident, which is subject to deduction of tax at source, would attract 30% disallowance if it is paid without deduction of tax at source or if tax is deducted but is not deposited with the Central Government till the due date of filing of return.

However, where in respect of any such sum, tax is deducted or deposited in subsequent year, as the case may be, the expenditure so disallowed shall be allowed as deduction in that year.

b) Levy of interest

As per section 201 of the Income-tax Act, if a deductor fails to deduct tax at source or after the deducting the same fails to deposit it to the Government’s account then he shall be deemed to be an assessee-in-default and liable to pay simple interest as follows:-

(i) at one per cent for every month or part of a month on the amount of such tax from the date on which such tax was deductible to the date on which such tax is deducted; and

(ii) at one and one-half per cent for every month or part of a month on the amount of such tax from the date on which such tax was deducted to the date on which such tax is actually paid.

c) Levy of Penalty

Penalty of an amount equal to tax not deducted or paid could be imposed under section 271C​.

Source: Income Tax

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CBDT press release: Extension of due date for deposit of TDS and TCS for the State of Tamil Nadu

CBDT has issued a press release regarding extension of due date for deposit of tax deducted at source and tax collected at source for the State of Tamil Nadu.

The issued press release has been given below:

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes 

PRESS RELEASE

New Delhi, 7th December, 2015

Subject: Extension of due date for deposit of tax deducted at source and tax collected at source for the State of Tamil Nadu – regarding

Chennai and a large part of Tamil Nadu have received unprecedented rainfall leading to flooding of large areas and disruption of normal life, including business and commerce. Given the extent of disruption, it is considered expedient in public interest to extend the due date for deposit of tax deducted at source and tax collected at source to provide relief to the deductors located in the State of Tamil Nadu.

The Central Board of Direct Taxes, in exercise of its powers conferred under section 119 of the Income-tax Act, 1961 ( the Act) has issued an Order extending the date for deposit of tax deducted at source [under section 200(1) of the Act] and tax collected at source [under section 206C (3) of the Act] during the month of November 2015 from 7th of December to 20th December, 2015 in respect of deductors located in the State of Tamil Nadu.

The Order is available on the website of the Department at www.incometaxindia.gov.in

(Shefali Shah)

Pr. Commissioner of Income Tax (OSD)

Official Spokesperson, CBDT

Source: Income Tax

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CBDT extends due date for payment of TDS/TCS for Tamil Nadu

CBDT has extended the due date for deposit of tax deducted at source (TDS) and tax collected at source (TCS) during the month of November from December 7 to December 20, in respect of deductors located in Tamil Nadu.

F.No. 385/26/2015-IT(B)

Government of India

Ministry of Finance

Central Board of Direct Taxes

(CBDT)

New Delhi, Dated: 5th December, 2015

Order under section 119 of the Income-Tax Act, 1961

Sub: Extension of time for deposit of tax deducted at source and tax collected at source for the State of Tamil Nadu.

In exercise of the powers conferred under kction 119 of the Income‑Tax Act, 1961 (the Act), the Central Board of Direct Taxes hereby extends the due date [under section 200 (1) of the Act] for paying to the credit of the Central Government, tax deducted at source and the due date [under 206C (3)] for paying to the credit of the Central Government, tax collected at source, in respect of deductions or collections made during the month of November, 2015, from 7th of December, 2015 to 20th of December, 2015 in respect of deductors located in the State of Tamil Nadu.

(Anand Jha)

Commissioner (IT&CT)

Source: Income Tax

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