ETDS Returns A CA’s Perspective

- CA Pankaj Trivedi

AGENDA

• Overview of TDS Provisions

• Overview of E TDS Provisions

• Objectives of Computerization

• Precautions for E TDS Returns

• Issues in filing of E TDS returns.

Overview of TDS Provisions

• Tax Deduction• Every person other than HUF & Individual where TO

is less than tax audit limits needs to deduct tax at the time of payment or at the time of credit which ever is Earlier by specified persons.

• Tax Deposit• TDS to be deposited within Specified Time Limits. For

TDS up to February, TDS to be deposited within 7th of subsequent month.

• For TDS deducted in the month of March, can be deposited till 30th April.Circular no 01 dated 06-04-2011 states its applicability from 01-04-2010 –Applicable to Assessment Year 2011-12

• Provision of Quarterly payment of TDS with the permission of AO- 7th July/Oct/Jan & 30th April

Overview of TDS Provisions

• Fines and Penalties- 201 & 207• Failure to deduct tax deductible will attract

simple Interest @ 1% p.a to be paid from the date on which deductible to the date on which deducted.

• Lead to disallowance of expenditure if TDS is not deducted and deposited before due date of filing of Return

• Penalty upto the amount of TDS can also be levied U/s 271 (C )

• Failure to deposit tax deducted will attract interest @ 1.5 pm from date of deduction to the date of payment AND will also attract Penal Provisions u/s 276 B

• rigorous imprisonment for period of 3 months to 7 years

Overview of TDS Provisions

• TDS Certificate • in Prescribed format• within prescribed time limits• penalty of Rs.100 per day can be levied.• Should contain PAN of deductee, TAN of deductor,

CIN numbers of TDS deposits & Receipt numbers of all quarterly returns filed.

• Duplicate Certificate can be issued• Issue of digital certificates• Non issue of certificate will attract

Penalty of Rs 100 per day

Overview of TDS Provisions

• TDS certificates for TDS other than salaries to be issued quarterly.

• TDS certificate should contain the receipt number mentioned on the Return filing receipt provided by Service provider of NSDL.

• Precautions while issuing TDS certificates:Serial Number, small change in Address, tallying is important before issuing certificates.

• TDS Returns• Need to file quarterly returns in prescribed format.• Failure to file returns will attract penalty of Rs 100

per day

Overview of ETDS Provisions

• Mandatory for Corporate, Government deductors & all deductors required to get their accounts audited in Preceding year & Deductors in whose case number of deductee records are equal to or more than 50

• Optional for Other Deductors-Paper return to be also filed with TIN centers only

• Returns need to be filed with NSDL • through TIN facilitation centres established by NSDL• can directly be uploaded in NSDL web site

Objectives of Computerisation:

• Need of the day• growing volumes• physical forms becoming formality• need for consolidation.

• Better Tax compliance• Incomes escaping assessment can now be easily tracked

by matching of PAN numbers. • Employees working in more than one organization in a year

• Misuse of TDS certificates can be prevented. • Better Governance as it would be easier for IT

department to collect Interest on delayed payments/Non deductions etc.

Section 139 (9) amended to state that Non Filing of TDS certificates will not deem return as defective.

E TDS RETURNS

• Each E TDS return should be • in separate CD/Floppy (form 24Q, 26Q, 27Q)• accompanied by duly filled in & signed Form No

27A in Physical format.• in single Floppy/CD and can also be compressed • Label should be affixed on each floppy

mentioning Name, Tan No, Period, & name of Form .

• Bank Challans, Physical Certificates, Other certificates need not be attached.

• CD/Floppy should be Virus Free.• Control totals mentioned in Form 27A

relating to amounts paid and tax deducted should cross tally with corresponding totals in main forms.

PRECAUTIONS FOR E TDS RETURNS

• PAN number of deductees is mandatory. Preferable to collect PAN card copy at the time of Joining/entering into contract itself.

• Separate challans to be made for TDS on salaries & TDS on other payments.

• Procedure to be introduced wherein a Senior Staff checks the Challan before it is sent to Bank with respect to Assessment Year, Section under which tax is paid etc.

• It is critical to check the availability of Challan Serial Number, BSR code etc on the Challan, the moment we receive the same.

• Amounts stated as paid on that particular date should match against the data of TDS deposited on that particular day. Entries to be passed carefully or else tallying payments will be difficult.

• Individual Payments to be matched with the challan payment.

• Names to be same against each PAN number.• 4th digit verification to ensure code is mentioned correctly

E TDS RETURNS

• Data-Form 24• Data in Form 24 for 1st three & 4th quarter.

• Only Particulars of Employees whose Estimated Income is above threshold limits needs to be given

• New Joinees-Details to be given from quarter in which the employee Joined the organisation.

• Employees Leaving Organisation.-Till the quarter in which employee is with Organisation.

• If Income exceeds threshold limit in mid-quarter, data should be given in relevant quarter and subsequent Quarterly returns.

• Section 206AA and deduction of Tax.

DUE DATES

Form No Particulars Due dates

Form No 24 Q Salaries 15th July, 15th October, 15th January & 15th May

Form No 26 Q Payments to Residents-other than Salaries

Same as above

Form No 27 Q Payments to Non Residents

15th July, 15th October, 15th January & 15th May

The present periodicity of filing of Quarterly returns is as under:

Changes/issues in E TDS returns.• For return being filed after 01-04-2011 need

to give details where there is no TDS due to 197 or in 194C.

• Lower Deduction certificates Precautions in TDS as well as deductions.

• Service Tax on Rent.• Payment of amount under wrong section• No PAN cases where TDS is done @ 20% +EC

or where TDS is done at Normal rates.• Precautions after Filing of Returns• Revised Returns or Correction return

Issues in E TDS returns.

• Clubbing Provisions- Declaration to be given or else problem of mismatch may arise.

• TDS from Salaries-where there is TDS on Positive Rental income Excess TDS from Previous Employer resulting in short deduction of TDS

• Notices for Non matching of TDS in Individual assessments vis a vis Section 205

• Remedy for Incorrect challans forWrong assessment YearWrong Section

E FILING

Filing of ETDS returns is very easy when you use a very simple

formula……….

“Charge for same”.

Thank You.