Clarifications and FAQs about newly amended Tax Collected at Source (TCS)

CBDT vide Circular No 22/ 2016 dated 08.06.2016 has clarified certain provisions relating to amended TCS rules of the Income Tax. It has also answered few of the Frequently Asked Questions.

Sub: Amendment in Section 206C vide Finance Act 2016
 
Section 206C of the Income-tax Act, 1961 (hereafter referred to as 'Act'), prior to amendment by Finance Act,20 16. provided that the seller shall collect tax at source at specified rate from the buyer at the time of sale of specified items such as alcoholic liquor [or human consumption, tender leaves, mineral being coal or lignite or iron orc etc. It also provided for collection of tax at source at the rate of one per cent on sale in cash of bullion exceeding 2 lakh rupees and jewellery exceeding 5 lakh rupees.

In order to reduce the cash transactions in sale of goods and services, Finance Act 2016 has expanded the scope of section 206C (I D) to provide that the seller shall collect tax at the rate of one per cent from the purchaser on sale in cash of any goods (other than bullion and jewellery) or providing of any services (other than payment on which tax is deducted at source under Chapter XV II-B) exceeding two lakh rupees. 

Best practices to be followed for filing Q4 TDS statements for Financial Year 2013-14

CPC (TDS) is reaching out to you to ensure that the best practices are followed for filing of your Q4 TDS statements. The emphasis is on timely, correct and complete reporting for taxes deducted at source, to ensure that the deductees are able to correctly claim TDS Credits and for generating correct TDS Certificates. As the due date for filing quarterly TDS statement for 4th quarter is approaching close, you are requested to take note of following important information before submitting TDS statements.

Payment of Taxes deducted / collected:

• In accordance with Central Government Account (Receipts and Payments) Rules, 1983, Government dues are deemed to have been paid on the date on which the cheque or draft tendered to the bank, was cleared and entered in the receipt scroll.
• Rule 125 of Income Tax Rules, 1962 provisions for Electronic Payment of Tax by way of internet banking facility, for a Company and a Person to whom provisions of section 44AB of the Act are applicable.

Timely Filing:

• The due date to file TDS statements for Q4, FY 2013-14 is 15th May, 2014.
• Please submit the statement within due date to avoid Late filing fee, which, being statutory in nature, cannot be waived

Correct Reporting:

• Please use your correct contact details, including Contact Number and email IDs in TDS Statements.
• It is very important to report correct and valid particulars in respect to deductor and deductees. Please report the TAN of the deductor, Category (Government / Non-Government) of the deductor, PAN of the deductees and other particulars of deduction of tax correctly in the quarterly TDS statement.
• Please make use of TAN-PAN Master from TRACES to Validate PAN and name of deductees before quoting it in TDS statement. Please note that there are restrictions for correction of PAN.
• Quote correct and valid lower rate TDS certificate in TDS statement wherever the TDS has been deducted at Lower/Nil rate on the basis of certificate issued by the Assessing Officer. Please raise Flag "A"/ "B", as appropriate, and quote valid and correct Certificate Numbers.
• Please maintain your correct Contact details in your Registration profile at TRACES.

Complete Reporting:

• Please ensure completeness of your TDS statement by including all your deductees. Please note that the obligation to report each transaction correctly in the relevant quarter is on the deductor and non-compliance amounts to incorrect verification of completeness of TDS statement.
• Completeness of statement will ensure that a C5, C3 or C9 correction can be avoided. It may be noted that CPC (TDS) does not encourage C9 corrections by addition of a new challan and underlying deductees.
• Please also complete Annexure II for all deductees employed for any period of time during the current financial year, including Annexure I for TDS details.

No requirement of Original Return Provision copy while filing Revised Return for TDS/TCS

• With effect from June 1,2014, Deductors/Collectors need not submit copy of Provisional Receipt of original statement and Statement Statistics Report (SSR) for furnishing e-TDS/TCS correction statement.

TDSCPC warns against raising incorrect Flags in TCS Returns

CPC(TDS) Communication : Flag raised for 15G/H despite Income exceeding the amount of exemption 

 

Dear Deductor ( TAN XXXXXXXXXX ),

CPC(TDS) feels glad to provide you with the new feature of downloading Form 27D, the Tax Collection Certificate for Deductees forming part of TCS Statements, filed in the form of 27EQ.

Centralized Processing Cell (TDS) has observed from its records that Flag "B" (for 15G/H Forms) has been wrongly raised in the quarterly TDS Statements as per the provisions of section 197A(1B) of the Income Tax Act, 1961. Following are the provisions of section 197A(1B) for your ready reference:

"The provisions of this section shall not apply where the amount of any income of the nature referred to in sub-section (1) or sub-section (1A), as the case may be, or the aggregate of the amounts of such incomes credited or paid or likely to be credited or paid during the previous year in which such income is to be included exceeds the maximum amount which is not chargeable to income-tax".

What is Form 15G/ H and its relevance :

• Under section 197A of the Income Tax Act 1961, Form 15G / H is a self-declaration, which is provided by a person resident in India (not being a Company or Firm) to their deductor that the tax on his estimated total income of the previous year, in which such income is to be included in computing his total income, will be NIL.
• The Declaration is made in the following Forms :
  • Form 15H - For Senior Citizens
  • Form 15G - For other than Senior Citizens

Consequences, if deductor wrongly raises Flag "B" for Forms 15G/H :

• If the deductor raises Flag "B" for non-deduction of tax, despite the total payments made by him exceeding the taxable amount, this results into incorrect reporting in the TDS Statements.
• Your attention is invited to provisions of section 201 of the Act, which reads as follows :
  • Where any person who is required to deduct any sum, does not deduct or does not Pay or after deduction, fails to pay,
    the whole or any part of the tax, then such person shall be deemed to be an assessee in default in respect of such
    tax.
• Under section 277 of the Act, if a person makes a statement in any verification under this Act or under any rule made thereunder, or delivers an account or statement which is false, and which he either knows or believes to be false, or does not believe to be true is punishable.

This may be noted that obligation to report each transaction correctly in the TDS statements, falls on the deductor and non-compliance amounts to incorrect verification of correctness of TDS statement.

 

You can reach out to us on ContactUs@tdscpc.gov.in or call our toll-free number 1800 103 0344.

CPC (TDS) is committed to provide best possible services to you.

CPC (TDS) TEAM
 

PAN Card misuse scam

Don't give PAN number for railway Tatkal booking as proof of ID.

The Railways display the PAN. name, sex and age of passengers on reservation charts pasted on railway compartments.

This is a boon for benami transactions. It is mandatory for traders like jewelers to collect tax (TCS) from customers on purchase of jewelry worth Rs 5 lakh & bullion worth Rs 2 lakh.

While complying with TCS rules for collection, payment and uploading of TCS information (e-filing of TDS returns) jewellers have to furnish PAN of customers. For certain customers it is not convenient to provide PAN.

To accommodate high net worth customers, traders have a easy source of benami PAN numbers, name, sex and age from reserved railway compartments. A traveller recently noticed a chap copying PAN particulars along with name, age and sex pasted on reserved compartments, and when confronted with the help of railway police, he admitted that he gets Rs 10 per PAN particulars from jewellers. These persons are copying PAN information of senior citizens, women etc from sleeper class with the intention that passengers in sleeper class are not serious tax payers and generally salaried class.

This wrong usage of a PAN number is known only to the regular tax payers, who regularly check their tax credit on form 26AS provided by the Income Tax department on their website.

This form 26AS is updated only on filing of e-TDS returns by the traders. There is almost 6-12 months time delay for the PAN holder to know that a transaction of above nature has taken place on his name and that too only if he goes through form 26AS.

On noticing the tax credit of above nature while reconciling form 26AS for tax credits for filing the return during subsequent financial year i.e. July / September, the tax payer has an option to exclude the same and go ahead in filing the return.

In that case the department will first initiate action from the tax payer's side asking him to explain the sources of money for the above transaction done in his name and also to prove that he has not carried on the above transaction.

The onus lies on the genuine tax payer for the fault committed by the traders.

This dispute may even take more than 2 years to be settled.

In conclusion, the only way to protect yourself from these fraudulent transactions, is to avoid quoting PAN details for identity proof at any source except for income tax related matters for which your Government had issued for.

You may quote your driving licence , Voter ID etc as your ID Proof but definitely not your PAN.

SOURCE : UNKNOWN/INTERNET