3 reasons to file e-TDS returns on time

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3 reasons to file e-TDS returns on time

Effective 1st July 2012, certain amendments in the Finance Bill necessitate that companies file their e-TDS returns on time. Non-filing or late filing of TDS returns attract two penal consequences as per amendment in the Finance Bill 2012-13.

  • Earlier U/S 234E late filing of e-TDS return attracted a penalty of Rs. 100/- per day subject to maximum TDS payable. However, this penalty has now been doubled and the defaulter is now liable to pay a penalty of Rs. 200/- per day for every day till it is paid. However:
    • The total liability will not exceed the amount that was deducted and due to be paid.
    • The penalty fees would have to be paid before the e-TDS statement can be filed.
  • U/S 271H a person is liable for penalty under two circumstances:
    • For not filing the TDS statement within the prescribed time frame
    • For providing incorrect details such as PAN, TDS amount challan etc
  • In addition to Section 243E as mentioned above, U/S 271H the deductor will be liable to pay a penalty of Rs, 10,000 which can extend up to Rs, 1 lakh if the deductor fails to file the statement within one year from the date on which it was due to have been filed.

The due dates for filing e-TDS returns without attracting penal charges are the 15th of the month following the quarter for which the statement has to be filed.

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TAN STRUCTURE (Tax deduction Account Number)

Every deductor is required to obtain a unique identification number called TAN (Tax Deduction Account Number) which is a ten digit alpha numeric number. This number has to be quoted by the deductor in every correspondence related to TDS.

As per Section 203A of the Income Tax Act 1961, it is mandatory for all asseesee liable to deduct TDS to quote this TAN Number in all communications regarding TDS with the Income Tax Department and failure to do so attracts a penalty of Rs. 10,000. TDS Returns and Payments would not be received  if TAN No. is not quoted.

Tax deduction Account Number (TAN) of the Employer or Bank is the unique identifier for matching TDS claims made against TDS reported by Employers or Banks. The TAN number is mentioned on the Form 16.

In case the TAN of the Employer or Bank is not correctly mentioned, no matching is possible and TDS credit will not be given.

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Know your PAN Structure Meaning of PAN digits (Income Tax India)

Structure of the new series of PAN : The Permanent Account Number under new series is based on following constant permanent parameters of a taxpayer and uses Phonetic Soundex code algorithm to ensure uniqueness :-

i. Full name of the taxpayer;

ii. Date of birth / Date of Incorporation;

iii. Status;

iv. Gender in case of individuals; and

v. Father name in case of individuals (including in the cases of married ladies)

These five fields are called core fields, without which PAN cannot be allotted.

The PAN under the new series is allotted centrally by a customised application system (IPAN / AIS) for all-India uniqueness. The system automatically generates a 10 character PAN using the information in above five core fields.

Structure of PAN

The fourth character of the PAN must be one of the following, depending on the type of assesse:
C  Company
P  Person
H  HUF(Hindu Undivided Family)
F  Firm
A  Association of Persons (AOP)
T AOP (Trust)
B Body of Individuals (BOI)
L Local Authority
J  Artificial Juridical Person
G  Govt

The fifth character of the PAN is the first character (a) of the surname / last name of the person. In the case of Personal Pan card, where the fourth character is “P” or (b) of the name of the Entity/ Trust/ Society/ Organisation in the case of Company/ HUF/ Firm/ AOP/ BOI/ Local Authority/ Artificial Jurdical Person/ Govt, where the fourth character is “C”,”H”,”F”,”A”,”T”,”B”,”L”,”J”,”G”.

Know PAN by Name

The phonetic PAN (PPAN) is a new concept which helps prevent allotment of more than one PAN to assessees with same / similar names. AIS works out the PPAN based on some important key fields of an assessee using an internal algorithm. At the time of PAN allotment, the PPAN of the assessee is compared with the PPANs of all the assessees to whom PAN has been allotted all over the nation. If a matching PPAN is detected, a warning is given to the user and a duplicate PPAN report is generated. In such cases, a new PAN can only be allotted if the Assessing Officer chooses to override the duplicate PPAN detection.

A unique PAN can be allotted under this system to 17 crore taxpayers under each alphabet under each status (i.e. individual, HUF, Firm, Company, Trusts, Body of Individuals, Association of Persons etc.)

Permanent Account Number under new series Since a taxpayer can make payment of taxes or have monetary transaction anywhere in India, a unique all India taxpayer identification Number is essential for linking and processing transactions / documents relating to a taxpayer on computers, as also for data matching. Therefore, a new series of Permanent Account Number was devised . Section 139A of the Act was amended w.e.f. 1.7.95 to enable allotment of PAN under new series to persons residing in areas notified by the Board.Ã…¡ Applications for allotment of PAN under new series was made mandatory in Delhi, Mumbai and Chennai w.e.f. 1.6.96, and in rest of the country w.e.f. 11.2.98.

Objectives sought : PAN was introduced keeping in view the following objectives :-

i.  to facilitate linking of various documents and information, including payment of taxes, assessment, tax demand, arrears etc. relating to an assessee.
ii. to facilitate easy retrieval of information.
iii.  to facilitate matching of information relating to investment, raising of loans and other business activities of taxpayers collected through various sources, both internal as well as external, for widening of tax base and detecting and combating tax evasion through non-intrusive means.

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Revised CBDT Instruction on Grant of TDS Credit For AY 2011-12

Section 143 of the Income-tax Act, 1961  Assessment  General  Processing of returns of A.Y. 2011-12  Steps to clear backlog withdrawal of Instruction No. 1/2012, dated 2-2-2012

Instruction No. 4/2012 [F. No. 225/34/2011-ITA.II], dated 25-5-2012

The Board has decided to withdraw Instruction no. 01/2012 issued on 2nd February, 2012 on the subject above with immediate effect. The following decisions have been taken in this regard:

(i)  In all returns (ITR-1 to ITR-6), where the difference between the TDS claim and matching TDS amount reported in AS-26 data does not exceed Rs. Five thousands, the TDS claim may be accepted without verification.

(ii) Where there is zero TDS matching, TDS credit shall be allowed only after due verification.

(iii)  Where there are TDS claims with invalid TAN, the TDS credit for such claims is not to be allowed.

(iv  In all other cases TDS credit shall be allowed after due verification.

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