509064 64485 Tds Handbook by Traces

Tax Deduction at Source (TDS) is one of the means of collection of

direct taxes. TDS constitutes nearly 40% of the direct tax collections.

In the legacy system, the deductees claimed TDS credits based on

manual TDS certificates, issued by the deductors. There was no

correlation between tax deductions, tax payments and issuance of

TDS certificates. Verification from the deductor was limited &

restricted. Thus, the conventional practice of giving credit of tax

deductions, based on manual TDS certificates was open ended

leading to tax frauds.

The tax deductors electronically report TDS to the Income Tax

Department through quarterly TDS statements. The deductor is

obliged to report the following details:

PAN & Name of the deductee;

Nature, extent & the date of transaction;

Amount, rate & the date of tax deducted/collected at

Source;

Details of tax payment including the amount & date

thereof

Based on the information submitted by the deductor, the deductee

is given credit of taxes. Therefore, a robust mechanism that ensures

correct, reliable flow of data to the department’s database and its

collation on the basis of taxpayer identifier(s) (PAN) prevents

revenue leakage.

LEGACY

PLUGGING THE GAP

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Centralized Processing Cell for TDS (CPC(TDS)) has been

conceptualized to ensure a seamless flow of data for tax credits. It

leverages technology to provide efficient services. CPC(TDS)

introduces transparency in the processes through online display of

information. Thus, it forms the backbone of overall TDS

administration of the Income Tax Department.

Background

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India is amongst very few countries where Comprehensive

Solution for withholding tax (TDS) has been put in place.

Centralized Processing Cell (TDS) is a technology

driven transformational initiative on ‘Tax Deduction

at Source’ that provides a comprehensive solution

through ‘Tax Deduction, Reconciliation, Analysis and

Correction Enabling System (TRACES)’ - its core

engine.

CPC (TDS) undertakes bulk processing of TDS

statements to generate ‘Annual Tax Credit’

statements for each taxpayer (PAN holder) in Form

26AS, TDS certificates in Form 16 / 16A & identifies

TDS defaults of short payment, short deduction,

interest etc.

CPC (TDS) reconciles and co-relates information from

various sources including banks (tax payment),

deductors (reporting tax deduction), Assessing

Officers ( mapping no tax / low tax deductions) and

tax professionals (reporting international

transactions).

With its inclusive approach, the initiative provides

bouquet of services to its stake holders including

deductors, deductees, Principal Accounts Officers of the

Central and State Governments & the officers of the

Income Tax Department.

The users/ stakeholders interact with the CPC (TDS) system

and with each other through multiple channels of

communication including Call Centre, e-mail, website etc.

Concept

Each Rupee that is collected is

accounted for. Robust reconciliation

of tax collected vis-à-vis tax credits

claimed.

Empowering the taxpayer with

information, knowledge of laws

& procedures and status of

t h e p r o c e e d i n g s . M u l t i p l e

communication channels.

Services at the doorstep of taxpayer

– any time / anywhere & realizing

jurisdiction free tax administration

for bulk processes.

Simplification & standardization of

Backend & Frontend processes.

Redesigning & reduction in number

of Forms.

Uniform interpretation of laws &

procedures through conversion of

laws into set of mathematical

formulae.

Approach & Strategy

Uniformity

Simplification

Accessibility

Good Tax Governance

Empowerment

USAGE- Facilitating easier compliance

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Provide a comprehensive technology platform for

all stakeholders

Enhance TDS processing capabilities

Streamline tax accounting

Address TDS mismatch issues through Online

Generation of TDS certificates

Minimize TDS frauds

Improve filing of Income Tax Returns and reporting

of correct Income

Release of manpower from Bulk Functions

Empower assessing officers using Business

Analytics for risk profiling and enforcement

functions

Provide insights for policy formulation on the basis

of data relating to nature & extent of financial

transactions & demographic profile of persons

involved in such transactions

Objectives

Leverage technology for better governance

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�Primary Data Centre, Noida

�Disaster Recovery Site, Pune

�Deductors

�Deductees

�Principal Accounts Officers

�Inbound

�Outbound

�Awareness of Tax Provisions

�Feedback on compliance

Data Centre :

Document Management Centre, Vaishali

Website – TRACES Portal - for

Portal for Field Assessing Officers

Call Centre :

Bulk email facilities

Online Feedback Module

Ticket Management Systems

Components

Effective & efficient service delivery mechanisms

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Non-intrusive integrated platform that provides

online services related to TDS Statement / Challan

processing, Corrections, Default information, TDS

certificates and real-time support for clarifications

View of Tax Credit Statements in Form 26AS with real-

time support for clarifications

• Consolidation of Demand Registers

• Real time Analytics and MIS for enforcement

• Online Ticket Management System

Deductors:

Taxpayers:

Field TDS Assessing Officers: Comprehensive Portal

that enables :

CPC (TDS) for End Users

CPC for End Users

Integrated platform for stakeholders

CPC (TDS) FrameworkC

PC

(TD

S)

PR

OC

ES

SIN

GO

UT

CO

ME

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on

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aned

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data

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appin

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ith

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vant

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ata

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ANING

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efa

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hort

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ent,

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nts

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on

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ec

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ata

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va

nc

eR

ed

res

sa

lIs

su

eIn

tim

ati

on

s/

De

ma

nd

no

tic

es

Tools

&A

pplicati

ons

(such

as

DM

S,

BI,

Port

al,

CR

Metc

.)

•

•

•

•

•

•

•

•

•

•

•

•

•

•

– Statement Status and Default payable

– Deductor Compliance Profile

– TDS Certificates Form 16 / 16A

– Transaction Based Report for Non - Residents

– Consolidated Statement File

– Justification Reports on Defaults

TRACES: https://www.tdscpc.gov.in

Dashboard

Online Corrections

Defaults Summary

Online PAN Verification

Online Verification of Certificates u/s 197 of

Income tax Act

Statement and Challan Status

TAN – PAN Consolidated File

Downloads

Aggregated TDS Compliance Report

e-Tutorials and FAQs

Circular and Notifications

CPC (TDS) Communications

Bulk Email Facilities

Online Facilities for Deductors

Non-adversarial tax administration

•

•

•

•

– Upload & updation of manual demand raised by

the Assessing Officer

– Integration of Manual Demands with demands

generated by the CPC (TDS)

– Tagging of Challans against demand entries to

liquidate demands

– TDS/TCS Statement Processing Status

– TAN/ AIN details

– Consolidated Statement files

– Intimations u/s 200A/ 154 of the Income tax Act

– Challan details

– Justification Reports

– Foreign Remittance Reports in Form 15CA

– Change of one TAN/ PAN to other TAN/ PAN

– Change of Assessment Year

– Change of section Code

Consolidation & Update of TDS Demand:

View and Download of:

Challan Corrections:

Generation of customized MIS and Data Analytics

Reports on various features of TDS Compliance.

Online Facilities for TDS Officers

Empowering officers for enforcement & services

•

•

•

•

View and Download

Feedback Module to log issues relating to TDS

credits & other obligations on part of

deductors & other stakeholders.

Comprehensive view of TDS defaults relating

to all TANs associated with a PAN through

'Aggregated TDS Compliance' Utility & 'Part G'

of the 26 AS statement.

Non - Resident Taxpayer Registration

– Annual Tax Credit Statements in Form 26AS

– TDS Certificates in Form 16B

Online Facilities for Taxpayers

Inclusive approach in tax administration

Snapshot of Form 26AS

Key CPC (TDS) Statistics

Processing upto 30th June, 2014

*

@

@

**

* Average Processing time : < 5 days from date of filing.

@ percentage is with respect to the total statements received.

** Intimations also sent to registered emails.

Online facilities

#

##

# percentage of Total Active TANs.

## Facility for registered tax payers at CPC (TDS), Income Tax

India E-filing Website & Banks.

Statements processed

Corrections : 40.36 lacs (98%)

Total : 141.77 lacs (98.3%)

Default Paper 75.34 lacs

Intimations issued

Online Correction

Requests Processed > 12,500

Challan Correction > 20,000

Requests Processed

Deductors Registered > 12 lacs (88%)

Taxpayers Viewing 26AS > 2.75 Crores

TDS Certificates > 10 Crores

Educational Emails > 1.25 Crores

Original : 101.41 lacs (99%)@

Minimizing physical interface with the department

Attributes of the CPC (TDS) System

1 Processing of more than 1 Crore deductee

records in 24 Hours

2 Processing of nearly 2000 Inbound letters in a

day

3 Processing of nearly 30000 Outbound

intimations in a day

4 Attending to more than 3000 Inbound Calls

per day at the Call Centre

5 Database size - 700 Crore Transactional Data

6 State of Art Data Centre at Noida and Pune

7 250 Plus Operational Resources

�TDS statements are processed within 5 days from the

date of their filing at the TIN-Facilitations Centres.

�More than registered deductors besides

taxpayers use various online facilities.

12 lakh

2.75 crore

Services on anytime anywhere basis

Value Addition through CPC(TDS)

Output

1

4

6

7

5

Significance

Critical for Income tax

return processing.

Ta x C o m p l i a n c e &Revenue Augmentation

Minimiz ing Phys ica l

interface

Non-adversar ia l tax

administration

Risk Profiling

3Addressing TDS

MismatchTDS Certificates

2 Online view of 26AS

TDS Defaults

Online Services

Educational emails,

FAQ, e-tutorials

Analytics

Tax Credits

Facilitates timely recon-ciliation of Tax Credits -Inclusive approach

Towards Robust tax administration

TDS Matching- Post CPC(TDS)2

6A

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Towards minimizing tax credit mismatch & tax frauds

Impact of CPC-TDS

TDS (Amount in Crores)

300,000

TDS Collection (Amount in Crores)

260,052250,000

160,769

201,983

222,014

150,000

200,000

143,496

100,000

-

50,000

2013-20142012-20132011-20122010-20112009-2010

Better Discipline in filing TDS Statements & Payment of taxes

Percentage of

statements

received within

due date

35.80

40.10

52.80

73.10

Financial Year

2010

2011

2012 #

2013

Percentage of

Statements

where TDS

Payment made

within due date

71.70

72.30

74.60

79.40

# Oct 2012 : CPC(TDS) commences operations

0

10

20

30

40

50

60

70

80

90

100

2005-0

62006-0

72007-0

82008-0

92009-1

02010-1

12011-1

22012-1

32013-1

4

9.6

24.5

630.3

637.8

442.8

52.7

1

70.8

8

84

90.9

8

No

.ofT

DS

Sta

tem

en

ts(i

nla

cs)

Impact of CPC-TDS

Increasing trend in filing of TDS Statements

Impact of CPC-TDS

Better discipline in filing TDS statements and payment of taxes

36.2

42.2

49.252.0

-

10.00

20.00

30.00

40.00

50.00

60.00

2010 -11 2011 -12 2012 -13 2013 -14

No

of

Tra

nsacti

on

s(i

nC

rore

s)

Financial Year

Growth in Reporting Transactions by Deductors

Pe

rce

nta

ge

Non-PAN Transactions

Improved reporting of transactions - Quantitative & Qualitative

0

5000000

10000000

15000000

20000000

25000000

30000000

As on 31st March2011

As on 31st March2012

As on 31st March2013

As on 31st March2014

3999049

8433086

15359754

27652958

TaxpayersViewing 26AS

TaxpayersViewing 26AS

Impact of CPC-TDS

Promoting Voluntary Compliance through online service

Count of Unique Deductors Filing at least one TDS statement

during the respective FY

0

200000

400000

600000

800000

1000000

1200000

1400000

1600000

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

658771

931170 9933771118466 1189804

13112301432427

Visitors’ Feedback @ TDS CPC

Message from the Union Finance Minister

Operations @ CPC (TDS)

Operations @ CPC (TDS)

Venue @ CPC (TDS)

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