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Brief provisions RELATED TO tds & Practical ISSUES IN filling of E-TDS RETURNS

This brief provides an overview of TDS provisions related to deductions, payment deadlines, consequences for failure to deduct or pay TDS, filing of E-TDS returns, and processing of TDS statements. It also covers the preparation and filing of E-TDS returns, issues related to payment of TDS, and the correct sequence of events for filing TDS returns.

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Brief provisions RELATED TO tds & Practical ISSUES IN filling of E-TDS RETURNS

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  1. CA. TEJAS PUROHIT Brief provisions RELATED TO tds&Practical ISSUES IN filling of E-TDS RETURNS

  2. PART-A BRIEF PROVISIONS RELATED TO TDS

  3. Chapter XVII-B of the ITA-1961 deals with the deduction of tax from various payments made by the deductor during the FY. • Section 192 to Section 196D covers various types of payments on which deductor is required to deduct TDS either at the time of amount credited or payment made by the deductor Deduction of tax at source

  4. When to deduct TDS

  5. Section 200(1) of the IT Act requires deductors to pay TDS within prescribed time. (Relevant Rule-30) Sec 200(1)-PAYMENT OF TDS

  6. RULE-30 (2) – TIMELIMIT FOR PAYMENT OF TDS

  7. As per the said rule following persons are required to pay tax including any interest or penalty electronically on or after 01/04/2008. Company and a person covered u.s. 44AB (Other than Company) Rule-30(6)(II) r.w.r 125(1)(i)-Mode of payment

  8. Section 201(1a) – Consequence of failure to deduct or pay

  9. Section 200(3) of the IT Act requires deductors to prepare TDS return in prescribed forms & file the same with the TIN facilitation centre (Persons Authorised by Income Tax Authority) within prescribed time. (Relevant Rule 31A) Sec 200(3)-furnishing e-tds return

  10. Rule-31a – statement of E-tds

  11. Due date for furnishing e-tds returns

  12. Section 234E of the IT Act has prescribed levy of fee in case of deductor fails to file E-TDS return within prescribed time w.e.f. 01/07/2012. • Late filing fees is Rs.200/- per day for every day during which the failure continues subject to maximum up to TDS amount. • Deductor is required to pay such levy before filing of E-TDS return Consequence for not filling E-tds return

  13. Section 200A-Computation of TDS deductible after following adjustments • Arithmetical error in E-TDS return filed or any incorrect claim apparent from information contained in the E-TDS return • Interest on the sum deductible as per the E-TDS return • Late filling fees u.s. 234E (introduced by FA-2015, w.e.f 01/06/2015 PROCESSING OF TDS STATMENTS

  14. After making adjustment as discussed in previous slide, intimation stating amount payable by or refundable to the deductor will be sent to the deductor. • No intimation u.s. 200A shall be sent after the expiry of one year from the end of the FY in which the E-TDS return is filed. Intimation u/s 200a to deductor

  15. Example – time limit for intimation u.s. 200a

  16. Amritsar Bench of ITAT in the case of Sibia Healthcare Private Limited Vs DCIT held that fees u.s. 234E cannot be levied before 01/06/2015 since there were no enabling provisions under section 200A. • Similar view taken by Chennai Tribunal & Chandigarh Tribunal in the case of G.Indhirani Vs DCIT & M/s Khanna Watches Ltd. Vs. DCIT Relevant ruling – 234e

  17. PART-B PAYMENT OF TDS & PREPARATION OF ORIGINAL RETURN & ISSUES

  18. Deduction & Payment of TDS Preparation of E-TDS Return Filling of E-TDS Return Quarterly statement status report Analysis of Justification Report Original return

  19. All the Corporate & Govermentdeductors/collectors • Persons who are covered u.s. 44AB of the IT Act 1961. • Where no of deductee records in a statement are 20 or more. Who is require to file e-tds return

  20. Government Utility or Private Software can be used. • Return can be validated by file validation utility (.fuv) • Files to be submitted with TIN-FC through electronic media viz pendrive/CD along with signed copy of Form 27A are .fuv, .txt, .html Software & files to be submitted

  21. Sequence of event-filling of TDS return

  22. 1. Challan Mode (Physical Challan): Wrong TAN may quoted - “0” may be wrongly typed as “o” & vise a versa - “D” may be wrongly typed as “o” & vise a versa - “I” may be wrongly typed as “1” & vise a versa - “5” may be wrongly typed as “S” & vise a versa (Whatever the mistake in TAN, the NSDL will not validate your payment & will show a error message as “Matching Pending”) 2. Payment through Net Banking – ensures payment is made only in the correct TAN Step : 1 Payment of tds

  23. Correct code for type of payment

  24. Tax is to be deposited by 7th of the next month and in case of deduction in the month of March, by 30th April • If the due date is the public holiday, tax can be paid in the next day. However system does not recognise such a clause and notice for interest on delay in payment may be received. In that case rectification application will then have to be filed with the jurisdictional TDS Officer. Payment issue

  25. Online payment of tax – request for rectification of mistake with jurisdictional AO(TDS) • Physical payment of tax – request for rectification of mistake with bank within 7days in respect of TAN, AY & Amount and within 3 months in case of other fields. Note: After the time limit rectification application can be filled with the jurisdictional AO(TDS) More details on Challan Correction Mechanism available athttp://www.incometaxindia.gov.in/_layouts/15/dit/pages/viewer.aspx?path=http://www.incometaxindia.gov.in/documents/challan-correction-mechanism-26082011.htm?int=1&IsDlg=1 Mistake in challan

  26. Basic details of the Deductor – PAN, TAN, Status, Address, responsible person etc. Basic details about the Deductee – PAN, Date of payment, Amt. paid, Tax Deducted, Tax Paid, Rate of TDS Challan Detail (CIN) Correct Challan Detail Step-2 Preparation of E-TDS Return

  27. Basic details of the deductor

  28. Continue…...

  29. Deductee details

  30. Continue… deductee details

  31. CONTINUE…. DEDUCTEE DETAILS

  32. CHALLAN DETAILS

  33. - It may be possible that physical challan is available with the deductor but does not reflected in NSDL site due to non uploading of challan details or wrong details may be uploaded in OLTAS by collecting bank. (Deductor is required to inform the Bank for uploading the challan detail in OLTAS or correct the details uploaded before preparation of E-TDS return) Verification of challan amount in challan status enquiry

  34. CHALLAN STATUS ENQUIRY

  35. TAN BASED VIEW

  36. CIN BASED VIEW

  37. In E-TDS return correct details about the challan is required to be entered viz BSR Code, Challan Serial no., Date of Payment (Challan Identification No.) and amount paid. Any mistake will result in generation of default by the system with “short payment” status. (This can be corrected by filling correction return / Online Correction facility from TRACES) Correct details in challan

  38. In E-TDS return correct PAN of the deductee is required to be mentioned otherwise it will not be reflected in Form 26AS of the deductee and assessee will not get the credit for the same. (This mistake can be corrected by filing “Correction Statement(Return/or online correction with DSC of responsible person)” Correct deductee details

  39. Section 206AA – Where the PAN provided to the deductor is invalid or does not belong to deductee, it shall be deemed that the deductee has not furnished his PAN to the deductor and the provisions of sub-section (1) i.e. higher deduction of tax, shall apply accordingly. • Notice for short deduction received with interest. Wrong pan of deductee

  40. Rectification of more than 4 characters in the PAN not permitted (2 characters in digit & 2 characters in letters) (Whether valid to valid or invalid to valid) • Advisable to verify PAN of all the deductees through online verification facility available on TRACES. Rectification in pan OF DEDUCTEE

  41. In E-TDS return wrong mention of amount paid to deductee, TDS deducted, Section, Rate at which TDS deducted will result into short deduction/payment of TDS & department can raise the demand notice for the same. (This mistake can be corrected by filing “Correction Statement (Return)”

  42. Correction is not permitted when deductee’s data are inserted with “ c “ flag. • Only up dation of PAN is permitted. • No deletion or modification in the field of Amount paid, TDS deducted & TDS deposited CORRECTION OF DEDucTEES WITH “C” FLAG

  43. Once the data is uploaded in the required software, the resultant file is to be given to NSDL TIN facilitation centre for filing. TIN facilitation center will issue acknowledgement bearing 15 digit no for the same. Which will be required to file the “Correction Statement”. Step-3 filling of e-tds return

  44. This will show you whether E-TDS return uploaded is “Accepted by TIN” or Rejected by TIN” (In case it is rejected by the TIN, deductor is required to file again original return till it is not accepted by the TIN) It can be viewed on www.tin-nsdl.com and select –E-TDS/TCS Filling-Quarterly Statement Status STEP-5 VERIFICATION OF QUATERLY STATEMENT STATUS

  45. If return is processed with default notice u.s. 200A will be sent to the deductor which is similar to intimation u.s. 143(1) issued in case of income tax returns. • Intimation u.s. 200A is to be treated as a notice of demand as per the deeming provision u.s. 156 Step-6 Processing of e-tds return

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