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Circular on Changes in TDS from 2009-2010

 

Circular on TDS Changes

Income Tax Department has issued a detailed circular related to TDS changes from 1st April 2009. All the items are in effect from the said date.

  1. Challan Payment:
    1. Transfer voucher provision removed for government deductors. They are also compulsorily required to make e-Payment.
    2. All the challan payments should happen through Form 17.
      1. This is through e-Payment at www.tin-nsdl.com. Facility will be available after 01st June 2009.
      2. Till then the Payments can be made in ITNS 281 challan, using earlier process. And for such challans paid, the details have to be re-entered in Form 17, between 01/07/2009 to 15/07/2009.
      3. On payment through Form 17, every deductee records will be assigned with a UTN. Such UTNs will be emailed to deductor email address and also will be available for download (UTN File).
      4. Deductees will also have provision to view their UTNs from NSDL website. But it is not very clear, whether it will be available at existing PAN login or a separate option.
    3. Form FY 2007-08 and 2008-09:
      1. NSDL will also generate the UTNs for TDS returns filed for these years. Such UTNs will be emailed to the deductors and also will be available for viewing and download at NSDL website.
      2. Deductees will also have provision to view their UTNs from NSDL website for these years.
      3. Such UTNs can be mentioned in ITR filing of 2009-10 assessment year.
  2. Quarterly Return:
    1. Form 24C has to be filed from first quarter itself.
    2. This has to be filed at www.incometaxindiaefiling.gov.in. This will be probably in an XML format!!
    3. All the TAN holders have to compulsory file. If there is not records, then a NIL return has to be filed.
  3. Annual returns:
    1. Form 24Q, 26Q, 27Q, 27EQ are to be filed before 15th June of subsequent year. Effectively, the quarterly returns have now been replaced by annual return.
  4. TDS Certificates:
    1. For FY 2008-09, deductor can issue either in new format or old format
      1. If issued in old format, deductor has to additionally send the consolidated statement of UTN to the deductee, as soon as he receives that.
      2. New forms can also be issued as an alternate.
    2. Certificates can be issued until 30th June 2009.
    3. For 2009-10 FY, new forms should be used compulsorily.
  5. TDS Claims:
    1. TDS/TCS claims will be allowed in ITR, only if:
      1. Deducted Amount has been deposited by the deductor through challan payment.
      2. Deductee/deduction information has been furnished by the deductor through TDS Return/Challan.
      3. TDS claimed by the assessee matches with information furnished by the deductor.

Regarding Form 24C COM Schedule:
The Schedule COM-I relates to details of TDS/TCS compliance in the first month of the relevant quarter. Likewise details of TDS/TCS compliance for the second and third month of the relevant quarter would have to be reported in Schedule COM-2 and Schedule COM-3 respectively.

  • In this Schedule in column (3), for example, against section 194A in column (1), the TAN holder is required to furnish the total amount of interest paid during the month. Let us assume that this total  amount is Rs. 1 crore.
  • In column (4) of the corresponding entry, the deductor is required to furnish the total amount on which TDS was liable or eligible to be deducted out of Rs. 1 crore. As is well known, no TDS is required to be deducted if the interest payment is less than Rs. 10,000. If the total of the amounts of interest payment/credit less than Rs. 10,000 is Rs. 30 lakhs, then the deductor must report in column (4) an amount of Rs. 70 lakhs (Rs. 1 crore – Rs. 30 lakhs).
  • In column (5), the deductor has to report that the total amount on which tax was deducted at prescribed rate out of the amount reported in column (4). In the instant case the rate of tax to be deducted at source is 11.33 percent (including surcharge and education cess).
  • However, in many instances the recipients of interest exceeding the threshold limit of Rs. 10,000/- would either furnish certificate for non deduction of tax or deduction at a lower rate than the prescribed rate. Let us assume that the amount of interest paid to such recipients is Rs. 15 lakhs.
  • Therefore, the amount of interest payment liable to TDS at the prescribed rate would be Rs. 55 lakhs (Rs. 70 lakhs – Rs. 15 lakhs), which is required to be reported in column (5).
  • Since the prescribed rate is 11.33%, and the amount of interest liable to TDS at the prescribed rate is Rs. 55 lakhs, the amount of TDS on such payment is Rs. 6,23,150/-. This amount is required to be reported in column (6).
  • In column (7), the deductor is required to report the amount of Rs. 15 lakh i.e., the amount of interest payment liable to TDS at less than the prescribed rate.
  • Let us assume that the TDS at ‘nil’ or lower rate on the amount of Rs. 15 lakh is Rs. 50,000/-. This amount would be required to be reported in column (8).
  • The total amount of TDS of Rs. 6,73,150/- (Rs. 6,23,150 + Rs. 50,000) is required to be reported in column (9).

 

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