TDSMAN Blog

Smart & Easy TDS Software for Preparing TDS Returns

TDSMAN Blog - Smart & Easy TDS Software for Preparing TDS Returns

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

facebooktwittergoogle_plusredditpinterestlinkedinmail

Failure to pay TDS collected can attract 7 year jail term: CBDT

Employers failing to pay the Government the tax deducted at source (TDS) on salaries of their employees can be jailed for up to seven years, the CBDT has said.

Failure to deduct income tax on salaries of employees or defaulting in payment of the same to the government will be liable to a penalty of an equivalent amount, the CBDT said while notifying annual circular for TDS on salary for FY 2015-16.

“Section 276B lays down that if a person fails to pay to the credit of the Central Government within the prescribed time, as above, the tax deducted at source by him or tax payable by him, he shall be punishable with rigorous imprisonment for a term which shall be between 3 months and 7 years, along with fine,” it said.

Besides, interest will also have to be paid before furnishing of quarterly statement of TDS for respective quarter, it added. The circular detailed the time line for deduction of TDS as well as its credit to the government for various categories of employers.

“If any person fails to deduct whole or any part of tax at source or fails to pay the whole or part of tax, he shall be liable to pay, by way of penalty, a sum equal to the amount of tax not deducted or paid by him,” it said. The circular also contains the Income Tax rate under various slabs as well as the surcharge of 12 per cent on individuals earning Rs 1 crore and above. It also detailed procedure for valuation of perquisites and the tax thereon.

The circular also notified 2 per cent Education Cess on Income Tax and another 1 per cent secondary and higher education cess. It also detailed method of payment of tax on perquisites by employer and calculation of income when salary is received from more than one employer.

Source: The Indian Express

facebooktwittergoogle_plusredditpinterestlinkedinmail

The taxpayer is entitled to TDS credit of its sister concern appearing in its Form 26AS due to an inadvertent error of a deductor

Background

Recently, the Delhi High Court (High Court) in the case of Relcom1 (the taxpayer) held that the taxpayer is entitled to the credit of the Tax Deducted at Source (TDS) of its sister concern due to an inadvertent error made by vendor mentioning the taxpayer’s Permanent Account Number (PAN) in the TDS certificate due to which TDS credit was reflected in the taxpayer’s Form 26AS instead of Form 26AS of the sister concern. The benefit of the TDS certificate was not availed by the sister concern.

The High Court observed that TDS credit was not availed by the sister concern and hence the tax department cannot deny the taxpayer’s TDS claim on a mere technical ground that corresponding income was not that of the taxpayer. The High Court also observed that Rule 37BA of the Income-tax Rules, 1962 (the Rules) envisages grant of TDS credit to entities other than the deductee. Therefore, the taxpayer is entitled to TDS credit.

Facts of the case

  • The taxpayer derived income from the business of erection, commissioning and installation of towers on a contract basis. During the year under consideration, the taxpayer filed its return of income. In the return of income, the taxpayer had claimed a credit of all TDS certificates, including that related to its sister concern but the income of the sister concern was not reflected in the taxpayer’s Profit and Loss Account.
  • The vendor billed its sister concern for the work but had mistakenly mentioned the taxpayer’s PAN in the TDS certificate, thus, inadvertently crediting its TDS account in the 26AS statement of the taxpayer which is PAN based. The taxpayer stated that the benefit of the TDS certificate mistakenly issued in its PAN had not been availed by its sister concern.
  • The Assessing Officer (AO) rejected the TDS claim relying on Section 1992 of the Income-tax Act, 1961 (the Act) and held that the TDS credit should be allowed to the person from whose income the deduction was made. Therefore, the taxpayer instead of claiming the TDS credit which did not belong to it should have approached the vendors for correction of their record.
  • The Commissioner of Income Tax (Appeals) [CIT(A)] and Income-tax Appellate Tribunal(the Tribunal) allowed the TDS claim.

High Court’s ruling

  • The tax department relied on the phrase ‘shall be treated as a payment of tax on behalf of the person from whose income the deduction was made’ to contend that the taxpayer’s TDS claim cannot be based on the receipts of its sister concern. However, the taxpayer claimed that TDS claim has not been availed by its sister concern. The tax department, having assessed the sister concern’s income in respect of such TDS claim cannot now deny the taxpayer’s claim on mere technical grounds that the income in respect of the said TDS claim was not that of the taxpayer. Further, the sister concern has not raised any objection with regard to the taxpayer’s TDS claim.
  • The High Court relied on the decision of the Andhra Pradesh High Court in the case of Bhooratnam3, where the Andhra Pradesh High Court held that the taxpayer is entitled to the TDS credit mentioned in the TDS certificates issued by the contractor, whether the said certificate is issued in the name of the Joint Venture or in the name of a director of the taxpayer.
  • It has been observed that the provisions of Rule 37BA of the Rules envisage grant of TDS credit to entities other than the deductee. Rule 37BA of the Rules is not directly applicable to the facts of the present case, but reliance placed on Rule 37BA of the Rules is merely to demonstrate that not in all circumstances TDS credit is given to the deductee.
  • The High Court relied on the well-settled dictum that procedure is the handmaid of justice, and it cannot be used to hamper the cause of justice. Therefore, the tax department’s contention that the taxpayer, instead of claiming the entire TDS amount, ought to have sought a correction of the vendor’s mistake, would unnecessarily prolong the entire process of seeking a refund based on TDS credit.

facebooktwittergoogle_plusredditpinterestlinkedinmail

  • RSS
  • Facebook

Subscribe to get Latest Updates


Save your time and get all new posts and updates delivered to you in your Mailbox