Tds Latest Update

1

TECHNICAL ISSUES RELATING TO PAYMENTS, RETURNS FILING AND

CERTIFICATES ISSUANCE PROCEDURES UNDER THE AMENDED

RULES FOR TDS/TCS

BY

C A S H A I L E S H R A T H IACA, M.Com

B A H E T I & S O M A N IChartered Accountants

1. Highlights of the new system.2. Mechanism for TDS/TCS payment 3. “Then and Now” regarding TDS/TCS

payment scheme4. Mechanism for TDS/TCS Returns filing5. “Then and Now” regarding TDS/TCS

Returns filing scheme6. Mechanism for Certificates issuance7. “Then and Now” regarding Certificates

issuance scheme8. Filing up Form No. 24C9. Amendments in Form Nos.

24Q/26Q/27Q/27EQ

2

SYNOPSIS FOR THE SESSION

HIGHLIGHTS

OF THE NEW

SYSTEM

3

THE NEW SYSTEM ESTABLISHES 3 BROAD PRINCIPLES FOR ALLOWABILITY OF TDS / TCS CLAIMS:

• Amount has been deposited by the deductor / collector into the credit of the Government

• Information relating to the deductee has been furnished by the deductor / collector to the Tax Information Network

•Claim by the deductee matches the information furnished by the deductor / collector.

• ALL deductors / collectors to pay TDS / TCS electronically only.

• E-payment to be made through new Form No. 17 (Mandatory)

• In Form No. 17, deductor simultaneously required to furnish :

PAN of the deductee Name of the deductee Amount of TDS / TCS against that deductee

• Scheme of Unique Transaction Number introduced.

4

MAJOR CHANGES IN THE SYSTEM:HIGHLIGHTS

OF THE NEW

SYSTEM

5

HIGHLIGHTS

OF THE NEW

SYSTEM • A UTN will be issued for every deduction

record which will be required to be quoted in the Quarterly Statements and Certificates.

• New TDS/TCS Compliance Statement in

Form No. 24C introduced.

• Quarterly filing of old TDS/TCS Returns in Form No. 24Q/26Q/27Q/27EQ not required henceforth. Such a Return required to be filed annually by 15th June for all the quarters at once.

MAJOR CHANGES IN THE SYSTEM:

HIGHLIGHTS

OF THE NEW

SYSTEM

There are certain transitionary provisions laid down by the amendment:

• Since Form 17 has become mandatory w.e.f. 1st April, 2009, but was kept in probation vide Press Release No. 402/92/2009 – MC (11 of 2009) dt. 11.05.2009 and made applicable from 1st July, 2009, the payments made during the month of April – May vide old Challan No. 281 will be issued UTNs by the NSDL either by e-mailing the same to the deductor or the deductor may directly download the same from the NSDL website.

•For this the deductor/collector will be required to fill up Form 17 for the above payments and furnish the same to the NSDL for obtaining the UTNs.

6

TRANSITIONARY PROVISIONS:

HIGHLIGHTS

OF THE NEW

SYSTEM

• The same will be required to be furnished between 1/07/09 to 15/07/09.

• For speedy processing and early refunds for the Income Tax Returns for AY 2009-10, UTNs may be quoted on the Income Tax Returns being filed while making a claim for TDS / TCS.

• For obtaining the UTNs for the above periods, following is to be done:

NSDL will assign a UTN for every TDS / TCS transaction reported in the Quarterly returns already filed.

7

TRANSITIONARY PROVISIONS:

8

HIGHLIGHTS

OF THE NEW

SYSTEM

8

TRANSITIONARY PROVISIONS:HIGHLIGHTS

OF THE NEW

SYSTEM

NSDL will e-mail the UTNs to the deductor or the deductor may download the UTN file. Such UTNs will be intimated to the deductees either through Certificates or Consolidated statement of TDS transactions.

• The deductor is required to issue new certificates under Form 16, 16A and 27D, quoting the UTNs. He may either issue the certificates without quoting the UTNs as he did so prior to 1st April, 2009 or issue the same after quoting the UTNs in the same. However, where the deductor issues the certificates without quoting the UTNs, he will have to send a consolidated statement of UTNs as soon as he receives them.

MECHANIS

M FOR

TDS/TCS

PAYMENT

UNDER THE

NEW

SYSTEM

•According to the amended Rules, e-payment of TDS/TCS by the deductor/collector has become mandatory to ALL. No deductor/collector can deposit the money in the Government treasury by any other mode.

•Further, new Form No. 17 will be required for making payment under the new scheme. The new Form requires the deductor/collector to furnish, alongwith the tax payment, details like the PAN of the deductee, Name of the deductee and moreover, the deductor is entrusted with the responsibility to check whether the PAN submitted by the deductor is valid. •In case the number of deductee records exceeds 10, then a separate deductee file is to be uploaded in addition to the Form No. 17!! 9

PROCEDURE FOR PAYMENT :

• Unique Transaction Number will be issued upon payment of the tax for every deductee record immediately.

• Challan Identification Number will also be issued in addition to the UTNs being issued.

• The new Form No. 17 requires the deductor to furnish his e-mail id and mobile number too. The same has also been incorporated in the present Challan No. 281 recently. The purpose for the same would be to facilitate the issuance of UTNs to the deductor.

MECHANIS

M FOR

TDS/TCS

PAYMENT

UNDER THE

NEW

SYSTEM

10

PROCEDURE FOR PAYMENT:

MECHANIS

M FOR

TDS/TCS

PAYMENT

UNDER THE

NEW

SYSTEM

• The new Form No. 17 also provides for a Transaction Reference Number. The purpose has not been laid down either by the amended rules or by the circular. But looking over to the background of introducing these amendments, it can be assumed to be a part of the control mechanism of TIN.

PROCEDURE FOR PAYMENT:

• PAN of the Deductee• Amount of TDS/TCS against the deductee• Deductor/collector has to check the validity

of the PAN

PRE-REQUISITES FOR FORM No. 17:

11c a a m a r r a m e s h n i l a n g e

MECHANIS

M FOR

TDS/TCS

PAYMENT

UNDER THE

NEW

SYSTEM

12

FORM NO. 17

MECHANIS

M FOR

TDS/TCS

PAYMENT

UNDER THE

NEW

SYSTEM

13

FORM NO. 17

MECHANIS

M FOR

TDS/TCS

PAYMENT

UNDER THE

NEW

SYSTEM

14

FORM NO. 17

“THEN AND NOW”

REGARDING TDS/TCS PAYMENT SCHEME

THEN NOW

• TDS/TCS payment in electronic mode was mandatory only for Corporate deductors and such deductors liable for Tax Audit U/s. 44 AB

• TDS/TCS payment in electronic mode now made mandatory for all type of deductors.

• Challan No. 281 was used for payment of TDS/TCS (electronic and physical payment mode)

• Form No. 17 is to be used for payment of TDS/TCS and the payment has to be in electronic mode only.

15

THEN NOW

• No question of UTNs. Upon making the payment, a Challan Identification No. was allotted by the bank accepting the Tax.

• Unique Transaction Number will be issued upon payment of the tax in addition to the Challan Identification Number. Such UTNs will be issued for every transaction record furnished in the form.

• The above referred CINs were used to be quoted in TDS/TCS Returns Form No. 24Q/26Q/27Q/27EQ and also on Certificates in Form 16/16A/27D.

• The above referred UTNs will now be required to be quoted in Form No. 24C, TDS/TCS Returns in Form No. 24Q/26Q/27Q/27EQ and also on Certificates in Form 16/16A/27D.

“THEN AND NOW”

REGARDING TDS/TCS PAYMENT SCHEME

16

17

THEN NOW

• No details (like the deductee, amount paid etc.) of deductions were required while payment. Such details were required while filing the TDS/TCS Returns.

• Details like the PAN of the deductee, Name of the deductee, TDS/TCS done are required to be filled up in Form No. 17 while making the payment itself.

“THEN AND NOW”

REGARDING TDS/TCS PAYMENT SCHEME

17

MECHANISM FOR

TDS/TCS RETURNS

FILING

18

• Every person who has obtained TAN shall electronically furnish a “Quarterly Statement of Compliance with TDS provisions” in Form No. 24C.

• Filing of Form No. 24C is mandatory for all TAN holders, irrespective of whether any payment liable for TDS/TCS has been made or not. Form No. 24C shall be applicable from the quarter ending on 30th June, 2009.

• Quarterly filing of existing Form 24Q, 26Q, 27Q and 27EQ has been done away with.

PROCEDURES

MECHANISM FOR

TDS/TCS RETURNS

FILING

19

• Instead, Form 24C is required to file for all the quarters, the due dates being 15th July, 15th October, 15th January for the first three quarters and 15th June following the Financial Year for the last quarter.

• Form 24Q, 26Q, 27Q and 27EQ, though continued to be called as quarterly, shall now be required to be filed annually for all the quarters at once on or before 15th June following the Financial Year.

• Form 24C shall replace the existing Form 27A.

PROCEDURES:

MECHANISM FOR

TDS/TCS RETURNS

FILING

20

• The e-form 24 C has to be furnished at http://incometaxindiaefiling.gov.in.

• However, the quarterly returns in Form No.

24Q, 26Q, 27Q and 27EQ, which were e-filed/physically submitted at a TIN facilitation centre, will continue to be submitted there itself, with the only change that it is now required to submitted only annually on or before 15th June following the Financial Year.

PROCEDURES:

“THEN AND NOW”

REGARDING TDS/TCS RETURNS

FILING SCHEME

21

THEN NOW

• TDS/TCS Returns were required to be filed quarterly (due dates being 15th July, 15th October, 15th January and 15th June for the last quarter) in Form No. 24Q/26Q/27Q/27EQ.

• TDS/TCS Returns in Form No. 24Q/26Q/27Q/27EQ are now required to be filed for all the four quarters, all at once, by 15th June following the last quarter of the financial year.

• Other than the above referred Form No. 24Q/26Q/27Q/27EQ, no other forms were required to be submitted.

• Instead a TDS/TCS compliance statement is required to be filed in Form 24C on a quarterly basis (due dates being 15th July, 15th October, 15th January and 15th June.)

22

“THEN AND NOW”

REGARDING TDS/TCS RETURNS

FILING SCHEME

“THEN AND NOW”

REGARDING TDS/TCS RETURNS

FILING SCHEME

THEN NOW

• The TDS/TCS returns were required to be furnished electronically (at a TIN FC Centre) in the case of a corporate deductor or where the deductor is liable for Tax Audit u/s. 44AB and physically in the case of other deductors /collectors.

• The TDS/TCS compliance statement in Form No. 24C is required to be furnished electronically at the website of the Income tax Department directly i.e. www.incometaxindiaefiling.gov.in Such e-filing is mandatory for all types of deductors.

THEN NOW• In case the

deductor/collector is not liable for any TDS/TCS on the payments, though he holds a valid TAN, he is not required to file any TDS/TCS Returns for that period.

• E-filing of Form 24C is mandatory for all the assessees holding a valid TAN, irrespective of whether any payment liable to TDS/TCS has been made or not.

23

“THEN AND NOW”

REGARDING TDS/TCS RETURNS

FILING SCHEME

MECHANISM FOR

CERTIFICATE ISSUANCE

24

• UTNs shall be quoted on the TDS / TCS Certificates.

• The deductor/collector is required to issue new Certificates under Form 16, 16A and 27D, quoting the UTNs.

• He may either issue the certificates without quoting the UTNs as he did so prior to 1st April, 2009 or issue the same after quoting the UTNs in the same. However, where the deductor issues the certificates without quoting the UTNs, he will have to send a consolidated statement of UTNs as soon as he receives them.

PROCEDURE:

25

• However, where the deduction/collection relate to a period later than 1/04/2009, then the deductor/collector is mandatorily required to issue the Certificates after quoting UTNs on them.

• Under the transitionary period, the deductor/collector may issue the Certificates after quoting UTNs on them, but not later than 30/06/2009.

MECHANISM FOR

CERTIFICATE ISSUANCE

PROCEDURE:

26

MECHANISM FOR

CERTIFICATE ISSUANCE

FORM No. 16

27

MECHANISM FOR

CERTIFICATE ISSUANCE

FORM No. 16a

28

MECHANISM FOR

CERTIFICATE ISSUANCE

FORM No. 27D

29

“THEN AND NOW”

REGARDING TDS/TCS

CERTIFICATE ISSUANCE

THEN NOW

• The TDS/TCS Certificates issued earlier didn’t provided for the quoting of the UTNs, since the scheme of UTNs was not in existence earlier.

• The amended TDS/TCS Certificates in Form No. 16/16A/27D provide for the quoting of UTNs alongwith the CINs.

30

“THEN AND NOW”

REGARDING TDS/TCS

CERTIFICATE ISSUANCE

THEN NOW

• The Certificates were required to be issued within a period of one month from the end of the period or one month from the end of the month in which such collection/deduction was done as the case may be. The issuer was eligible to issue a consolidated certificate for the whole period at the request of the receiver of the certificate.

• The due dates for the issuance of the amended certificates is same as the earlier ones. However, the deductor/collector, while issuing certificates for deductions / collections done prior to 1/04/09, can issue without quoting of UTNs as he used to do it earlier and later on send a consolidated statement of UTNs. Where the deductions/collections relate to a period on or after 1/04/09, the deductor/collector has to issue the certificates under new certificates only. The deductor /collector may also issue the new certificates for the deduction /collections done before but not later than . It should be noted that this is a transitionary provision and is applicable only for the said period.

31

FILING UP FORM NO.

24C

FORM NO. 24C

32

FILING UP FORM NO.

24C

FORM NO. 24C

33

FILING UP FORM NO.

24C

FORM NO. 24C

34

FILING UP FORM NO.

24C

FORM NO. 24C

35

FILING UP FORM NO.

24C

FORM NO. 24C

36

AMENDMENT IN FORM NOS. 24Q / 26Q / 27Q /

27EQ

FORM NO. 24Q

37

AMENDMENT IN FORM NOS. 24Q / 26Q / 27Q /

27EQ

FORM NO. 26Q

38

AMENDMENT IN FORM NOS. 24Q / 26Q / 27Q /

27EQ

FORM NO. 27Q

39

AMENDMENT IN FORM NOS. 24Q / 26Q / 27Q /

27EQ

FORM NO. 27EQ

4040

THANK YOU