Date Extended – TDS / TCS Returns-FY:19-20, Quarter 4

By a notification dated 24th June 2020, followed by a Press Release, CBDT has extended the last date for filing TDS / TCS Returns for quarter ending March 2020 from 30th June 2020 till
31st July 2020.

Subsequently, the issue of TDS / TCS Certificates has also been extended till 15th August 2020.

Original Notification & Press Release can be viewed as under:

Notification dated 24th June 2020

Press Release dated 24th June 2020

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Healthy Practices for Error-Free TDS Returns

Healthy practices for error-free TDS returns has been given below: 

  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 with 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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Salary TDS – Employee to inform Employer for concessional rate

Section 115BAC has been inserted in the Finance Act 2020 in the recent budget. This allows the option to Individuals & HUF to avail concessional rate of income tax with certain conditions pertaining to claiming deductions & other concessions. The other existing option will also continue.

This comes into effect from April 2020 (i.e. FY:2020-21 / AY:2021-22).

Since the Employers need to deduct tax (TDS) on salaries, CBDT vide its Circular No. C1 of 2020 dated 13/04/2020 has clarified the procedure and rules related exercising either of the two options for calculating TDS. This is summarized as under:

  • The Employee needs to inform the Employer that for the financial year, he would be opting for the computation as per the new Section 115BAC. On receiving this intimation, the Employee will deduct tax (TDS) on salary accordingly.
  • If no intimation is received from the Employee, the existing system of TDS on salary for that employee shall continue.
  • Once the intimation is made by the Employee to the Employer to opt for tax computation under Section 115BAC, this cannot be changed during the course of the financial year. However, this can be changed in the subsequent financial year.
  • At the time of filing tax returns, the employee has the option to select either of the two options to compute the tax liability. This is irrespective of the option used by the Employer for TDS purposes.

Click Here to view the original circular

The concessional tax slabs as per Section 115BAC is as under:

 

Income Slab

In Rupees (Lakhs)

Tax Rate (%)

Section 115BAC

Tax Rate (%)

Existing System

Less than 5.00 Exempted Exempted
5.00 – 7.50 10% 20%
7.50 – 10.00 15% 20%
10.00 – 12.50 20% 30%
12.50 – 15.00 25% 30%
Above 15.00 30% 30%

 Note: The taxable income as computed under the provisions of Section 115BAC is without Deductions and other Reliefs.

Click Here to view the original circular

 

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Useful guidelines to avoid common mistakes while submitting TDS Statements

Following are some useful guidelines to avoid common mistakes, while submitting TDS Statements and you are requested to go through the following in detail.

Incorrect reporting of 197 Certificates:

Please refer to the following guidelines for correct reporting of 197 Certificates:

  • The Certificate Number should be of 10 digits with Alpha-numeric structure. Please refer to the following examples:
      • Correct Format 1111AA111A;
      • Incorrect Format: 1111AA111A/194C
    • Certificate Number should be valid during the period for which it is quoted.
    • The Certificate Number should be for the same PAN, Section Code and Section Rate for which it has been mentioned in the statement
    • Threshold limit Amount of the Certificate should not be exceeded.
    • Please ensure that the Certificate is not expired. Please refer to the following illustration:
      • Lower deduction Certificate under section 197, issued in April 2013 (e.g. Certificate Number-1) stands cancelled by Assessing Officer on 10/11/2013.
      • A fresh certificate Under Section 197 (e.g. Certificate Number-2) is issued with effect from 11/11/2013.
      • Deductor quotes Certificate Number-2 against the transactions recorded during the period from 01/11/2013 to 10/11/2013 in Q3 TDS statement.
      • Deductor should have quoted Certificate Number-1 for the transactions conducted till 10/11/2013.

Common errors resulting in Short Payment Defaults:

  • Typographical errors committed by deductor, in reporting the date 20032014    in the Tax Deducted column.
  • Total of Amount Paid / Credited reported in the Tax Deducted column of the statement. This results in short payment and Deductors need to ensure that the TDS/TCS Deducted/Collected amount should be equal to TDS/TCS Deposited Amount.

The above mistakes are illustrated below:

Amount Paid/ Credited

TDS Deducted

TDS Deposited

Remarks

1,55,000.00 1,55,000.00 15,500.00 Wrong TDS Deducted Amount
2,20,420.00 20032014.00 22042.00 Date mentioned in the TDS Deducted Column

 Actions to be taken:

  • CIN Particulars (BSR Code, Date of Deposit and Challan Serial Number) mentioned in the TDS statement should exactly match with the CIN Particulars as available on Challan Status at www.tdscpc.gov. in or Challan Status Enquiry at www.tin-nsdl.com
  • For BIN (Book Identification Number), the particulars (24G receipt number, Date of transfer voucher and DDO Serial Number) mentioned in the TDS statement by the Govt. Deductors should exactly match with the BIN Particulars as available on Challan Status at www.tdscpc.gov. in or BIN View at www.tin-nsdl.com
  • Amount of Tax deposited pertaining to different BINs/ CINs should not be clubbed together while reporting in the TDS statements.
  • Few other common mistakes in reporting dates are as follows:

Actual Date of Deposit 
(As per Challan)

Date of Deposit mentioned in TDS Statement

Observations

07/01/2014 (07th Jan 2014) 07/01/2013 (07th Jan 2013) Wrong Year (2013 instead of 2014)
07/01/2014 (07th Jan 2014) 01/07/2014 (01st July 2014) Wrong Date Format (MM/DD/YYYY)

Click Here to download the trial version of TDSMAN (FY: 2020-21) for your evaluation. Prepare one return and experience it … our helplines (033) 22875500, 09836490007 will assist you in case of any difficulty.

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