Tax Deducted at Source (TDS)

Submitted to: - Submitted by:-Prof. Amit Mandle Chaitany JoshiComputer Dept. M.B.E final

I owe a great many thanks to a great many people who helped andsupported me during the writing of this project.

My deepest thanks to Lecturer, Prof. Amit Mandle the Guide of

the project for guiding and correcting various documents of mine

with attention and care.

I would also thank my Institution and my faculty members

without whom this project would have been a distant reality. I also

extend my heartfelt thanks to my family and well wishers.

Chaitany JoshiM.B.E Final

Overview............................................4What is TDS.......................................5TDS rate.............................................5Salaries...............................................6TDS certificate...................................8Annual returns section 206...............10Tax Deducted Account No.................11How to deposit TDS..........................12TDS exemption..................................13Special cases.......................................14New Changes in TDS.........................16Income Tax Rules...............................17Amendments.......................................18Bibliography........................................28

Tax Deducted at SourceTax Deducted at Source or best known as TDS is one of the modes of collecting Income-

tax from the assessees in India. This is governed under Indian Income Tax Act, 1961, by

the Central Board for Direct Taxes (CBDT) and is part of the Department of Revenue

managed by Indian Revenue Service (IRS), Mini of Finance, Govt. of India.

Overview

In simple terms, TDS is the tax getting deducted from the person receiving the amount

(Employee/Deductee) by the person paying such amount (Employer/Deductor). This is applicable

for certain types of payments, as applicable under the Act.

In the process of TDS, deduction of tax is effected at the source when income arises or accrues.

Hence where any specified type of income arises or accrues to any one, the Income-tax Act

enjoins on the payer of such income to deduct a stipulated percentage of such income by way of

Income-tax and pay only the balance amount to the recipient of such income.

The tax so deducted at source by the payer, has to be deposited in the Government treasury to

the credit of Central Govt, within the specified time. The tax so deducted from the income of the

recipient is deemed to be payment of Income-tax by the recipient at the time of his assessment.

Income from several sources is subjected to tax deduction at source. Presently this concept of

TDS is also used as an instrument in enlarging the tax base. Some of such income subjected to

TDS is salary, interest, dividend, interest on securities, winnings from lottery, horse races,

commission and brokerage, rent, fees for professional and technical services, payments to non-

residents etc. It is always considered as an Advance tax which is paid to the government.

What is TDS?

In a simple language TDS stands for tax deducted at source. It is a tax that is deducted from the earning of the employee by the employer in other words it is a tax that is deducted at source. It is

deducted as per the finance act of that year. TDS should not be confused with the income tax return; TDS is a different tax than income tax . Tax deduction is useful to reduce the income taxand provide tax relief. TDS is deposited in the government treasury and later on assigned to central government. TDS came into existence because government wants to expand their tax bracket in the country.

Lets have a look at some of the income that is subjected to tax deduction at source (TDS).

1. Income through the salary2. Interest rate generated from nay mode3. Rental charges4. Insurance commission5. Prize money from betting, lotteries and horse races6. Commission on sale of lottery ticket7. Income generated from the foreign countries8. Fees for professional and technical services

Latest TDS (tax deducted at source) rate 2010 -2011�

Payment sourceThreshold

in Rs.

co-operative society/Local

authority/company firm (rate in %)

HUF (rate in %)

Winning from lotteries 10000 30 30

Winning from horse races 5000 30 30

Commission on insurance 20000 10 10

Rent or property 180000 10 10

Interest from bank 10000 10 10

Commission/brokerage 5000 10 10

Professional fees 30000 10 10

Scrap - 1 1

Toll plaza - 2 2

Mining /quarrying - 2 2

Interest on debenture and securities - 10 -

Withdrawal from NSS 2500 20 -

Payment to nonresident sportsmen - 10 -

Income from ling term capital gain - 20 -

Income by way of short term capital gain

- 15 -

Fees for technical services payable by Government or an Indian concern in Pursuance of an agreement made by

- 10 -

non- Resident with the government

TDS is not applicable if Pan is provided by the transporter. Surcharge and cess is not applicable on TDS with effect from 1 April 2009 on any payment made by the resident.

Calculation of how to deduct correct TDS

Salaries

1. Estimate the annual approximate salary.A. As it s an approximate deduction from the employee salary. Calculate �

the exact taxable salary amount payable till current month of financial year.

B. Calculate the approximate salary that will pay for next financial year.2. For the correct calculation of TDS it needs to calculate any other mode of income

declared by the employee.3. Deduct any loss declared by the employee such as loss of the house.4. Declaration as per 80C, 80D, 80G etc.5. Calculate the surcharge, income tax and cess on the net income of the

employee.6. Deduct any type of rebate.7. Calculate the total tax now deduct the TDS made till last month from it.8. Divide the net TDS by remaining number of months in the FY including this � �

month.9. Deduct this month from employee salary.

Non salaries 1. In this check that no payment should be paid to government, reserve bank or

mutual fund.2. It is always preferable to calculate the threshold.3. Deduct the amount as per the declaration 197A for non deduction of TDS.4. Check that employee has not submitted a certificate by Assessing officer under

section 197 for non-deduction of TDS or deduction at a lower rate.5. If you want to get effective TDS rates you need to include surcharge and cess.

Wrong or non calculation of TDS1. Any payment that is payable as interest, commission, rent or brokerage. It should be

added to the income tax to get the final tax structure.2. Attract penalty that is applicable for the person who is not able to pay the amount of tax

on time.

Interest earned from securities, horse racing, insurance commission and lottery prizes are applicable for the TDS. Tax deduction is applicable for any kind of charity and if the person is suffering from any kind of disability.

All people who want to pay TDS are required to apply for TAN (tax deduction and collection account number)

TDS certificate

Section 192  This certificate on form 16 is submitted by the payer with in one month prior to �next financial year.

Let s have a look at the key sections:�

Section 192 payment of salary or payment of wages.� Section 193 Payment of securities or payment of interest.� Section 194 A Interest other than securities.�

Section 194 B Amount generated from lotteries or card game.� Section 194 BB- Winning from horse race. Section 194C Payment to contractor.� Section 194 H payment of commission or brokerage.� Section 194 I Payment of rent of plant and payment of machinery� Section 194J- Payment of professional charges.

TDS implications on payment of commission or brokerage are like if a person who is responsible for paying to a resident, and any income that comes in the form of commission or brokerage have to deduct tax at source from there.

There are few charges that are exempted from tax at source (TDS)

The discount that is avail by the stamp vendor should not be confused with TDS as per section 194H, in the course of buying and selling of goods the discount comes does not come under the provision of commission or brokerage the tax will be deducted at source.

Deduction of tax by airlines from its agent. In this tax will be deducted at source as per the section 194H. TDS will be deducted from the actual cost of theairline fare.

TDS is not applicable in RBI due to the turnover commission payable by the reserve bank of India to the agency bank.

For PCO franchisee no deduction shall b e made by BSNL or MTNL.

In case of transport contract if PAN is provided then there will not be any deduction for TDS from 01/10/2009 to 31/03/2010.

If PAN is not provided then TDS deduction would be 1 %. As per the new clause the charges for the rent paid, plant and machinery the TDS would

be 2% however for land, furniture and building it would be 10%.

Annual Returns to be filed - Section 206 read with Rule 37

S No

Nature of paymentForm No.

SectionDue date of filing in the

next financial year

1. Payment of salary 24 Section 192 31st May

  Interest on securities 25 Section 193 30th June

2.Payment of dividend or income in respect of Units u/s194K

26Section 194Section 194K

30th April

3. Interest other than Interest on securities 26ASection 194A

30th June

  Winning from lotteries 26BSection 194B

31st May

  Winning from horse races 26BBSection 194BB

-do-

4. Payment to Contractors & Sub-Contractors 26CSection 194C

30th June

5. Insurance Commission 26DSection 194D

-do-

6.Insurance Commission paid/credited without deduction of tax

26E Section 206 Ommited w.e.f. 19.3.1997

7. Payments from deposits under NSS 26FSection 194EE

30th June

8.Payments on account of repurchase of Units

26GSection 194F

-do-

9.Payments regarding Commission on sale of lottery tickets

26HSection 194 G

-do-

11. Payment of rent 26JSection 194I

-do-

12.Payment of Professional fees or technical fees

26KSection 194J

-do-

TAN (Tax Deduction Account Number)

Tax Deduction and Collection Account Number or TAN is a 10 digit alpha-numeric number which is compulsory to be obtained by all persons who are accountable for Tax Deduction at Source (TDS) and Tax Collection at Source (TCS) on behalf of the Income Tax Department. The persons who deduct or collect tax at source on behalf of the Income Tax Department are required to apply for and obtain TAN. If a person responsible for TDS/TCS fails to apply for TAN or does not comply with the provisions of the Act, he may have to pay a penalty of Rs. 10,000/-.

The Income Tax Act makes it mandatory for all persons responsible for TDS/TCS to quote TAN in all the TDS/TCS returns, all TDS/TCS payment challans and all TDS/TCS certificates to be issued. TDS/TCS returns, whether filed in paper or electronic format, will not be received by the

authority if TAN is not quoted. Also, banks will not accept any TDS/TCS challans on which TAN is not quoted.

A person should have only one TAN. It is illegal for a person to have multiple TANs. If a person has received a duplicate TAN by mistake or otherwise, the same must be surrendered for cancellation. No separate TAN is required for TDS or TCS. The same TAN needs to be mentioned in all returns and challans, whether related to TDS or TCS. However, in case of companies or banks, if the company/bank has more than one branch, then each branch or the person responsible for that branch must separately apply for TAN.

Application for TAN

In order to apply for a TAN or to get the details on the existing TAN changed or corrected, you are required to make an application in the requisite form. You cannot apply for a TAN on plain paper. Application for new TAN is to be made in Form 49B and submitted to any of the Tax Information Network Facilitation Centres (TIN-FCs) managed by the National Securities Depository Ltd (NSDL). TIN-FC addresses are available at www.incometaxindia.gov.in or http://tin.nsdl.com. The application can also be made online through http://tin.nsdl.com. Generally, no documents are needed to be submitted with TAN application, but in case of online application, the acknowledgement generated must be forwarded to the NSDL. The processing fee for TAN is Rs. 50/- + service tax, as applicable. This fee needs to be paid at the time of submitting the Form.

The applications are digitized by NSDL and are then forwarded to the Income Tax Department. The Income Tax Department will process the TANapplication and will issue the TAN that will be intimated online to NSDL. On the basis of receipt of the TAN from Income Tax Department, the NSDL will issue TAN letters to the applicant. The new TAN letter would come to the person at the address indicated in the Form or would be given against the acknowledgement in case of online application. NSDL will intimate the TAN to the person and he would be required to mention the TAN on all futurecorrespondence relating to TDS/TCS.

How to Deposit In TDS

Challan in which payment is to be made to Govt. Account

Sr. No

Challan No Nature of payment

1. Challan No 9-ITNS 191Where tax is deducted from salaries

2.Challan No 8-ITNS 39/ ITNS 271(Computerised)

Where tax is deducted at source (other than salaries) onpayment made to persons other than Companies.

3.Challan No 2-ITNS 39A/ ITNS 269(Computerised)

Where tax is deducted at source from payments made to Companies.

Important points to be kept in mind while   filling   the   Challan :

In case of TDS pertaining to item other than salaries, the deductor must indicate the nature of payment by ticking the relevant item. Two counterfoils will be returned by the bank- 4th counterfoil is required to be attached with the return of income and 3rd counterfoil is required to be retained by the deductor for his record as indicated on the top of the challan.

Exemption From TDS India

Circumstances in which tax is not to be deducted at source or is to be deducted at a lower rate :

S.No Type of Income

Form No in which application to be made

Certificate to be issued by the Assessing Officer

Period of validity

1. Salary (sec192)Form No 13 (see rule 28)

Form No 15AA (see rule 28AA). The certificate is issued to the deductor under advice to the applicant

Valid for the period specified in the certificate (see Rule 28AA) Fresh application required after expiry of validity period.

2.Interest on securities (Section 193)

-do- -do- -do-

3.Interest other than interest on Securities (Section 194A)

-do- -do- -do-

4.Insurance Commission (Section 194D)

-do- -do- -do-

5.Rental Income (Section 194I)

-do- -do- -do-

6.Income in respect of Units (Section 194K)

-do- -do- -do-

7.Payment to non-residents (Section 195)

-do- -do- -do-

8.

Payment to Contractors or Sub-Contractors (Section (194)

Form No.13C(See Rule 28)

No prescribed form. Thecertificate can be issued by the Assessing Officer on a plain paper

For the relevant FY.

9.Commission on sale of lottery tickets(sec 194G)

Form No 13D (applies to lottery agents and not prize winners)

-do- -do-

10.

Payment of fees for professional or technical services (sec 194J)

Form No 13E

-do- -do-

11.

Payment to non-resident banking company (sec 195(3))

Form No 15C (see rule 29B)

Form No 15EFor the FY specified in thecertificate

12.

Payment to non-resident company carrying on business or profession in India through a branch (not being interest or dividend)-sec 195(3)

Form No 15D (see rule 29B)

-do-For the relevant FY

Types of income/payment where the above benefit is not available under the Act:

1. Winning from Lottery or Crossword puzzles Section 194B2. Winning from horse race Section 194BB3. Payments to non-resident Sportsmen or Association Section 194E4. Payments in respect of NSS deposits Section 194EE5. Payments on account of repurchase of units issued by Mutual funds Section 194F6. Income in respect of units of non-residents, Off-shore Funds;foreign currency bonds;

(FIIs) Section 196A,196B, 196C & 196D

TDS Exemption For Individuals

The Act , vide Sec 197A, for the convenience of an individual payee, allows the benefit of non-deduction of tax at source on filing of declaration in the prescribed form with the payer. The details are given below (Sec 197A read with Rule 29C. Also see Circular No.351 dated 26.11.82)

S.No Types of Income

Prescribed form (in duplicate)

Payee who can

Period of validity

filedeclaration

1.Interest on securities Section 193

Form No 15F in duplicate. One copy to be sent by the Payer to Chief Commissioner/ Commissioner within seven days of the succeeding month.

By an individual resident in India.

Declaration valid for one previous year.

2.

Interest other than interest on securities - Section 194A.

Form No.15H -do-Any payee other than Company or firm.

-do-

3.

Payment of NSS deposit – section 194EE

Form No.15I -do-Any individual resident in India

-do-

4.

Income in respect of Units Sec 194K

Form No 15H -do-Any payee other than a company or a firm

-do-

Certificate Of Deduction In India1. Salary (sec 192) :

Form No.16 (Rule 31 (1)(a). The certificate should be issued by the deductor within one month of the close of the financial year in which deduction is made.

2. In all other cases :

Form No 16A (Rule 31(1)(b)).

1. General time limit for issuing certificates in all other cases is within one month from the end of the month during which the credit is given or sum paid.

2. Rule 31(3), first proviso, gives further option to the payer to issue certificate within one week after the expiry of two months from the month in which income is credited. This option is available where the amount is credited to the account of the payee on the last day of the accounting period of the payer. This option is available in respect of payments except sec 192-salary, 194B-winning from lotteries, 194BB-winning fromhorse races, 194EE-payments from NSS deposits, 194F-payments in respect of repurchase of units, 194K-income in respect of units.

3. Where payment in respect of TDS is permitted quarterly under rule 30(1) i.e. income from interest, insurance commission, the certificate is to be issued within 14 days of the payment of Income Tax

Note : Where more than one certificate is required to be furnished to the payee during the financial year, then on the request of the payee, one consolidated certificate may be

issued within one month from the end of such financial year vide new proviso to Rule 30 inserted vide notification dated 2.7.1996

Deduction of Tax at Source in the case of Non-Residents and No Objection Certificate for Foreign Remittance (Sec. 195):

1. Any person responsible for paying to a non-resident, not being a company, or to a foreign company, any interest (not being interest on securities) or any other sum chargeable under the provisions of this Act (not being income chargeable under the head ''Salaries'' ) shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rates in force: Provided that in the case of interest payable by the Government or a public sector bank within the meaning of clause (23D) of section 10 or a public financial institution within the meaning of that clause, deduction of tax shall be made only at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode.

2. Where the person responsible for paying any such sum chargeable under this Act (other than interest on securities and salary) to a non-resident considers that the whole of such sum would not be income chargeable in the case of the recipient, he may make an application to the Assessing Officer to determine, by general or special order, the appropriate proportion of such sum so chargeable, and upon such determination, tax shall be deducted under sub-section (1) only on that proportion of the sum which is so chargeable.

3. Subject to rules made under sub-section (5) of Sec.195 , any person entitled to receive any interest or other sum on which income-tax has to be deducted under sub-section (1) may made an application in the prescribed form to the Assessing Officer for the grand of a certificate authorising him to receive such interest or other sum without deduction of tax under that sub-section, and where any such certificate is granted, every person responsible for paying such interest or other sum to the person to whom such certificate is granted shall, so long as the certificate is in force, makepayment of such interest or other sum without deducting tax thereon under sub-section (1).

4. A certificate granted under sub-section (3) of Sec.195 shall remain in force till the expiry of the period specified therein or, if it is cancelled by the Assessing Officer before the expiry of such period, till such cancellation.

Special Cases in TDS1. Return regarding deduction of tax from non-residents Rule 37A:

Returns in respect of T.D.S. under Section 193, 194, 194E, 195,196A,196B,196C & 196D from any payment made to a non resident or to a resident but not ordinarily resident assessee (not being a company) or from any company which is neither a Indian Company nor a company which has made the prescribed arrangement for the declaration of and payment of dividend within India have to be filed within14 days from the end of the quarter in Form No 27 to the designated officer as per Rule 36 A.

However, where T.D.S. is pertaining to interest on securities under Sec.193, or payment to non-resident sportsmen or sports associations under Sec.194E, or of interest or any other sum referred to in Sec.195, or income from units of UTI to a non resident Indian or a non resident HUF where the assets were acquired out of funds from a NR(E) account or by remittance of foreign currency as referred to in Section 196A(2) , or income from units referred to in section 196B, or income from foreign currency bonds or shares of an Indian Company referred to in Section 196C at the income of FIIs from securities referred in Section 196D then the return is to be filed in Form No. 27 within 14 days after the expiry of two months from the month in which the income was so credited.

2. Return of deduction of tax from contribution paid by Trustees of approved Superannuation Fund-Rule 33:

Return to be filed in Form No 22 within 2 months from the end of the financial year.

New Changes in TDS Rules – CBDT Press Release Dt.2-6-2010

The Central Board of Direct Taxes (CBDT) have amended the Rules relating to TDS

provisions date and mode of payment of tax deducted at source (TDS),

TDScertificate and filing of ‘statement of TDS’ (TDS return) vide Notification No.

41/2010; SO No. 1261(E) dated 31.05.2010. The amended rules will apply only in

respect of tax deducted on or after 1st day of April 2010.

Forms for TDS certificate have been revised to include the receipt number of the

TDS return filed by the deductor. Now the Tax-deduction Account Number (TAN) of

the deductor, Permanent Account Number (PAN) of the deductee, and Receipt

number of TDS return filed by the deductor will form the unique identification for

allowing tax credit claimed by the taxpayer in his income-tax return.

Government Authorities (Pay and Accounts Officer or Treasury Officer or Cheque

Drawing and Disbursing Officer) responsible for crediting tax deducted at source to

the credit of the Central Government by book-entry are now required to

electronically file a monthly statement in a new Form No. 24G containing details of

credit of TDS to the agency authorised by the Director General of Income-tax

(Systems).

Due date for furnishing TDS return for the last quarter of the financial year has been

modified to 15th May (from earlier 15th June). The revised due dates for furnishing

TDS returns are

Sl. No.Date of ending of the quarter of the financial year

Due date

1. 30th June 15th July of the financial year

2. 30th September 15th October of the financial year

3. 31st December 15th January of the financial year

4. 31st March 15th May of the financial year immediately following the financial year in which deduction is made

Due date for furnishing TDS certificate to the employee or deductee or payee is revised as under :

Sl. No. CategoryPeriodicity offurnishing TDScertificate

Due date

1. Salary       (Form No.16)

Annual By 31st day of May of the financial year immediately following the financial year in which the income was paid and tax deducted

2. Non-Salary(Form No.16A)

Quarterly Within fifteen days from the due date for furnishing the ‘statement of TDS’

Income-tax (Sixth Amendment) Rules, 2010 – TDS Rules Amended for A.Y. 2011-12

Income-tax (Sixth Amendment) Rules, 2010 – Substitution of rules 30, 31, 31A, 31AA,

37CA and 37D; Form Nos. 16, 16A and 27D; insertion of Form No. 24G and omission

of rule 37A.

Notification No. 41/2010 [F.No. 142/27/2009-SO(TPL)], dated 31-5-2010.

S.O. 1261(E).- In exercise of the powers conferred by section 295 of the Income-tax

Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following

rules further to amend the Income-tax Rules, 1962, namely:-

1.  (1) These rules may be called the Income-tax (6th Amendment) Rules, 2010.

(2) They shall come into force on the 1st day of April, 2010.

2. In the Income-tax Rules, 1962, -

(a) for rules 30, 31, 31A and 31 AA the following rules shall be substituted, namely:-

“Time and mode of payment to Government account of tax deducted at

source or tax paid under sub-section (1A) of section 192.

30.

(1) All sums deducted in accordance with the provisions of Chapter XVII-B by an office

of the Government shall be paid to the credit of the Central Government -

(a) on the same day where the tax is paid without production of an income-

taxchallan; and

(b) on or before seven days from the end of the month in which the deduction is

made or income-tax is due under sub-section (1A) of section 192, where tax is paid

accompanied by an income-tax challan.

(2) All sums deducted in accordance with the provisions of Chapter XVII-B by

deductors other than an office of the Government shall be paid to the credit of the

Central Government -

(a)   on or before 30th day of April where the income or amount is credited or paid in

the month of March; and

(b)  in any other case, on or before seven days from the end of the month in which-

(i)         the deduction is made; or

(ii)        income-tax is due under sub-section (1A) of section 192.

(3)  Notwithstanding anything contained in sub-rule (2), in special cases, the

Assessing Officer may, with the prior approval of the Joint Commissioner, permit

quarterly payment of the tax deducted under section 192 or section 194A or section

194D or section 194H for the quarters of the financial year specified to in column (2)

of the Table below by the date referred to in column (3) of the said Table:-

Table

Sl. No. Quarter of the Financial Year ended on Date for quarterly payment

(1) (2) (3)

1. 30th June 7th July

2. 30th September 7th October

3. 31st December 7th January

4. 31st March 30th April.

B.- Mode of payment

(4) In the case of an office of the Government, where tax has been paid to the credit

of the Central Government without the production of a challan, the Pay and Accounts

Officer or the Treasury Officer or the Cheque Drawing and Disbursing Officer or any

other person by whatever name called to whom the deductor reports the tax so

deducted and who is responsible for crediting such sum to the credit of the Central

Government, shall-

(a)           submit a statement in Form No. 24G within ten days from the end of the

month to the agency authorised by the Director General of Income-tax (Systems) in

respect of tax deducted by the deductors and reported to him for that month; and

(b) intimate the number (hereinafter referred to as the Book Identification Number)

generated by the agency to each of the deductors in respect of whom the sum

deducted has been credited.

(5) For the purpose of sub-rule (4), the Director General of Income-tax (Systems)

shall specify the procedures, formats and standards for ensuring secure capture and

transmission of data, and shall also be responsible for the day-to-day administration

in relation to furnishing the information in the manner so specified.

(6) (i) Where tax has been deposited accompanied by an income-tax challan, the

amount of tax so deducted or collected shall be deposited to the credit of the Central

Government by remitting it within the time specified in clause (b) of sub-rule (1) or in

sub-rule (2) or in sub-rule (3) into any branch of the Reserve Bank of India or of

the State Bank of India or of any authorised bank;

(ii) Where tax is to be deposited in accordance with clause (i), by persons referred to

in sub-rule (1) of rule 125, the amount deducted shall be electronically remitted into

the Reserve Bank of India or the State Bank of India or any authorised bank

accompanied by an electronic income-tax challan.

(7) For the purpose of this rule, the amount shall be construed as electronically

remitted to the Reserve Bank of India or to the State Bank of India or to any

authorised bank, if the amount is remitted by way of-

(a)           internet banking facility of the Reserve Bank of India or of the State Bank of

India or of any authorised bank; or

(b)          debit card.

(8) Where tax is deducted before the 1st day of April, 2010, the provisions of this rule

shall apply as they stood immediately before their substitution by the Income-tax

(      Amendment) Rules, 2010.

Certificate of tax deducted at source to be furnished under section 203.

31. (1) The certificate of deduction of tax at source by any person in accordance with

Chapter XVII-B or the certificate of payment of tax by the employer on behalf of

the employee under sub-section (1A) of section 192 shall be in-

(a)         Form No. 16, if the deduction or payment of tax is under section 192; and

etaxindia.org

(b)        Form No. 16A if the deduction is under any other provision of Chapter XVII-B.

(2)  The certificate referred to in sub-rule (1) shall specify:-

(a)     valid permanent account number (PAN) of the deductee;

(b)     valid tax deduction and collection account number (TAN) of the deductor;

(c)     (i) book identification number or numbers  where deposit of tax deducted is

without production of challan in case of an office of the Government;

(ii)challan identification number or numbers in case of payment through bank.

(d)     (i) receipt number of the relevant quarterly statement of tax deducted at

source which is furnished in accordance with the provisions of rule 31A;

(ii) receipt numbers of all the relevant quarterly statements in case the statement

referred to in clause (i) is for tax deducted at source from income chargeable under

the head “Salaries”.

(3) The certificates in Forms specified in column (2) of the Table below shall be

furnished to the employee or the payee, as the case may be, as per the periodicity

specified in the corresponding entry in column (3) and by the time specified in the

corresponding entry in column (4) of the said Table:-

Table

Sl. No. Form No. Periodicity Due date

(1) (2) (3) (4)

1. 16 Annual By 31st day of May of the financial year immediately following the financial year in which the income was

paid and tax deducted

2. 16A Quarterly Within fifteen days from the due date for furnishing the statement of tax deducted at source under rule 31A.

(4) If an assessee is employed by more than one employer during the year, each of

the employers shall issue Part A of the certificate in Form No. 16 pertaining to the

period for which such assessee was employed with each of the employers and Part B

may be issued by each of the employers or the last employer at the option of the

assessee.

(5) The deductor may issue a duplicate certificate in Form No. 16 or Form No. 16A if

the deductee has lost the original certificate so issued and makes a request for

issuance of a duplicate certificate and such duplicate certificate is certified

asduplicate by the deductor.

(6)  (i) Where a certificate is to be furnished in Form No. 16, the deductor may, at his

option, use digital signatures to authenticate such certificates.

(ii) In case of certificates issued under clause (i), the deductor shall ensure that-

(a)      the provisions of sub-rule (2) are complied with;

(b)      once the certificate is digitally signed, the contents of the certificates are not

amenable to change; and

(c)      the certificates have a control number and a log of such certificates is

maintained by the deductor.

(7) Where a certificate is to be furnished for tax deducted before the 1st day of April,

2010, it shall be furnished in the Form in accordance with the provisions of the rules

as they stood immediately before their substitution by the Income-tax (     

Amendment) Rules, 2010.

Explanation.- For the purpose of this rule and rule 37D, challan identification number

means the number comprising the Basic Statistical Returns

(BSR)                                                                                                                               

                                                                                                                                        

                                                                     Code of the Bank branch where the tax

has been deposited, the date on which the tax has been deposited and challan serial

number given by the bank.

Statement of deduction of tax under sub-section (3) of section 200.31A. (1)

Every person responsible for deduction of tax under Chapter XVII-B, shall, in

accordance with the provisions of sub-section (3) of section 200, deliver, or cause to

be delivered, the following quarterly statements to the Director General of Income-

tax (Systems) or the person authorised by the Director General of Income-tax

(Systems), namely:-

(a)                 Statement of deduction of tax under section 192 in Form No. 24Q;

(b)                Statement of deduction of tax under sections 193 to 196D in-

(i)                  Form No. 27Q in respect of the deductee who is a non-resident not

being a company or a foreign company or resident but not ordinarily resident; and

(ii)                 Form No. 26Q in respect of all other deductees.

(2)        Statements referred to in sub-rule (1) for the quarter of the financial year

ending with the date specified in column (2) of the Table below shall be furnished by

the due date specified in the corresponding entry in column (3) of the said Table:-

Table

Sl. No. Date of  ending of the quarter of the financial year

Due date

(1) (2) (3)

1. 30th June 15th July of the financial year

2. 30th September 15th October of the financial year

3. 31st December 15th January of the financial year

4. 31st March 15th May of the financial year immediately following the financial year in which deduction is made

(3) (i) The statements referred to in sub-rule (1) may be furnished in any of the

following manners, namely:-

(a)                 furnishing the statement in paper form;

(b)        furnishing the statement electronically in accordance with the procedures,

formats and standards specified under sub-rule (5) alongwith the verification of the

statement in Form 27A.

(ii) Where,-

(a)                 the deductor is an office of the Government; or

(b)                the deductor is the principal officer of a company; or

(c)                 the deductor is a person who is required to get his accounts audited

under section 44AB in the immediately preceding financial year; or

(d)       the number of deductee’s records in a statement for any quarter of the

financial year are twenty  or more,

the deductor shall furnish the statement in the manner specified in item (b)  of clause

(i).

(iii)    Where deductor is a person other than the person referred to in clause (ii), the

statements referred to in sub-rule (1) may, at his option, be delivered or cause to be

delivered in the manner specified in item (b) of clause (i).

(4)        The deductor at the time of preparing statements of tax deducted shall,-

(i)         quote his tax deduction and collection account number (TAN) in the

statement;

(ii)        quote his permanent account number (PAN) in the statement except in the

case where the deductor is  an office of the Government;

(iii)      quote the permanent account number of all deductees;

(iv)       furnish particulars of the tax paid to the Central Government including  book

identification number or challan identification number, as the case may be.

(5) The Director General of Income-tax (Systems) shall specify the procedures,

formats and standards for the purposes of furnishing of the statements and shall be

responsible for the day to day administration in relation to furnishing of the

statements in the manner so specified.

(6) Where a statement of tax deducted at source is to be furnished for tax deducted

before the 1st day of April, 2010, the provisions of this rule and rule 37A shall apply as

they stood immediately before their substitution or omission by the Income-tax (     

Amendment) Rules, 2010.

Statement of collection of tax under proviso to sub-section (3) of section

206C.

31AA. (1) Every collector, shall, in accordance with the provisions of the proviso to

sub-section (3) of section 206C, deliver, or cause to be delivered, to the Director

General of Income-tax (Systems) or the person authorised by the Director General of

Income-tax (Systems), a quarterly statement in  Form No. 27EQ.

(2)        Statements referred to in sub-rule (1) for the quarter of the financial year ending with the date specified in column (2) of the Table below shall be furnished by the due date specified in the corresponding entry in column (3) of the said Table:-

Sl. No. Quarter of the financial year ended Due date

(1) (2) (3)

1. 30th June 15th July of the financial year

2. 30th September 15th October of the financial year

3. 31st December 15th January of the financial year

4. 31st March 15th May of the financial year immediately following the financial year in which collection is made

(3) (i) The statement referred to in sub-rule (1) may be furnished in any of the

following manners, namely:-

(a)                 furnishing the statement in paper form;

(b)                furnishing the statement electronically in accordance with the

procedures, formats and standards specified under sub-rule (5) alongwith the

verification of the statement in Form 27A.

(ii) Where,-

(a)              The collector is an office of the Government; or

(b)              The collector is the principal officer of a company; or

(c)              The collector is a person who is required to get his accounts audited

under section 44AB in the immediately preceding financial year;

(d)      The number of collectee’s records in a statement for any quarter of the

financial year are twenty  or more,

The collector shall furnish the statement in the manner specified in item (b)  of clause

(i).

(iv)   Where the collector is a person other than the person referred to in clause (ii),

the statement referred to in sub-rule (1) may, at his option, be delivered or cause to

be delivered in the manner specified in item (b) of clause (i).

(4)      The collector at the time of preparing statements of tax collected shall,-

(i)         quote his tax deduction and collection account number (TAN) in the

statement;

(ii)        quote his permanent account number (PAN) in the statement except in the

case where the collector is an office of the Government;

(iii)      quote the permanent account number of all collectees;

(iv)     furnish particulars of the tax paid to the Central Government including  book

identification number or challan identification number, as the case may be.

(5) The Director General of Income-tax (Systems) shall specify the procedures,

formats and standards for the purposes of furnishing of the statements and shall be

responsible for the day to day administration in relation to furnishing of the

statements in the manner so specified.

(6) Where a statement of tax collected at source is to be furnished for tax collected

before the 1st day of April, 2010, the provisions of this rule shall apply as they stood

immediately before their substitution by the Income-tax (      Amendment) Rules,

2010. ”;

(b) rule 37A shall be omitted;

(c) for rules 37CA and 37D, the following rules shall be substituted, namely:-

“Time and mode of payment to Government account of tax collected at

source under section 206C.

37CA.(1) All sums collected in accordance with the provisions of sub-section (1) or

sub-section (1C) of section 206C by an office of the Government shall be paid to the

credit of the Central Government -

(a) on the same day where the tax is so paid without production of an income-tax

challan; and

(b) on or before seven days from the end of the month in which the collection is

made, where tax is paid accompanied by an income-tax challan.

(2) All sums collected in accordance with the provisions of sub-section (1) or sub-

section (1C) of section 206C by collectors other than an office of the Government

shall be paid to the credit of the Central Government within one week from the last

day of the month in which the collection is made.

(3) In the case of an office of the Government, where tax has been paid to the credit

of the Central Government without the production of a challan, the Pay and Accounts

Officer or the Treasury Officer or the Cheque Drawing and Disbursing Officer or any

other person by whatever name called to whom the collector reports the tax so

collected and who is responsible for crediting such sum to the credit of the Central

Government, shall-

(a)    submit  a statement in Form No. 24G within ten days from the end of the month

to the agency authorised by the Director General of Income-tax (Systems) in respect

of tax collected by the collectors and reported to him for that month; and

(b)     intimate the number (hereinafter referred to as the Book Identification Number)

generated by the agency to each of the collectors in respect of whom the sum

collected has been credited.

(4) For the purpose of sub-rule (3), the Director General of Income-tax (Systems)

shall specify the procedures, formats and standards for ensuring secure capture and

transmission of data, and shall also be responsible for the day-to-day administration

in relation to furnishing the information in the manner so specified.

(5) (i) Where tax has been deposited accompanied by an income-tax challan, the tax

collected under sub-section (1) or sub-section (1C) of section 206C shall be deposited

to the credit of the Central Government by remitting it within the time specified in

clause (b) of sub-rule (1) or in sub-rule (2) into any branch of the Reserve Bank of

India or of the State Bank of India or of any authorised bank.

(ii) Where tax is to be deposited in accordance with clause (i), by persons referred to

in sub-rule (1) of rule 125, the amount collected shall be electronically remitted into

the Reserve Bank of India or the State Bank of India or any authorised bank

accompanied by an electronic income-tax challan.

(6) For the purpose of this rule, the amount shall be construed as electronically

remitted to the Reserve Bank of India or to the State Bank of India or to any

authorised bank, if the amount is remitted by way of-

(a)           internet banking facility of the Reserve Bank of India or of the State Bank of

India or of any authorised bank; or

(b)          debit card.

(7) Where tax is collected  before the 1st day of April, 2010, the provisions of this rule

shall apply as they stood immediately before their substitution by the Income-tax

( Amendment) Rules, 2010.

Certificate of tax collected at source under section 206C(5).

37D. (1) The certificate of collection of tax at source under sub-section (5) of section

206C to be furnished by the collector shall be in Form 27D.

(2)  The certificate referred to in sub-rule (1) shall specify:-

(a)                 valid permanent account number (PAN) of the collectee;

(b)                valid tax deduction and collection account number (TAN) of the

collector;

(c)                 (i) book identification number or numbers  where deposit of tax

collected  is without production of challan in case of an office of the Government;

(ii)challan identification number or numbers in case of payment through bank;

(d)                 receipt number of the relevant quarterly statement of tax collected at

source which is furnished in accordance with the provisions of rule 31AA.

(3)  The certificate in the Form No. 27D referred to in sub-rule (1) shall be furnished

to the collectee within fifteen days from the due date for furnishing the statement of

tax collected at source specified under sub-rule (2) of rule 31AA.

(4) The collector may issue a duplicate certificate in Form No. 27D if the collectee has

lost the original certificate so issued and makes a request for issuance of a duplicate

certificate and such duplicate certificate is certified as duplicate by the collector.

(5) Where a certificate is to be furnished for tax collected before the 1st day of April,

2010, it shall be furnished in the Form in accordance with the provisions of the rules

as they stood immediately before their substitution by the Income-tax (  

Amendment) Rules, 2010. ”;

(d) in Appendix-II,-

(i)   for Form. No. 16 and Form No.16A, the following Forms shall be substituted,

namely:-