Analysis of Union Budget 2017 provisions of Income Tax Service Tax Excise Duty Custom Duty with Budget Highlights Commentary Speech, Notification, News & Articles.
1. Introduction -e-TDS implies, filing of the TDS return in electronic media as per prescribed data structure in either a floppy or a CD ROM. The aforesaid requirement is essentially a part of the process of automation of collection, compilation and processing of TDS returns. Preparation of returns in electronic forms or e-TDS will eventually be beneficial to the deductor, by cutting down the return preparation time, reducing the volume of documentation and thereby economizing the compliance cost. At the same time, it will also facilitate the Government in better co-relation of taxes deducted with the taxes finally deposited in the banks and credits of TDS claimed by the deductees.
2. Statutory Requirement of Preparation of e-TDS -As per proviso to section 206(2), w.e.f. 01/04/2005, a deductor is required to prepare the return of TDS in electronic form. The comprehensive scheme of e-TDS has been notified vide Notification No. S.O. 974 (E) dated 26/08/2003. The present statutory provisions mandate the Government and Corporate deductors to file the TDS returns in electronic form with the designated e-TDS Intermediary at any of the TIN facilitation centres. However, for the other deductors filing of e-TDS is optional.
3. e-Administrator, e-Intermediary, TIN Facilitation Centres –For the purpose of administering the scheme of e-TDS, the Central Board of Direct Taxes has appointed Director-General of Income-tax (Systems) as the e-Filing Administrator. The e-TDS return is mandatorily to be prepared in data format issued by the e-Administrator.
The e-Returns are to be submitted at Centres referred as TIN Facilitation Centres (or TIN FCs) which have been opened by National Security Depository Ltd. (NSDL) which has also been designated as e-Intermediary.
4. Data Structure of e-TDS, Procedure for filing – The e-TDS return has to be prepared in the data format issued by the e-Filing Administrator. This format/software is available on the website of the Income-tax Department at http:\ www.incometaxindia.gov.in and that of NSDL at http:\ www.tin-nsdl.com
There is also a validation software which is available along with the data structure. This is required to be used to validate the data structure of the e-TDS return prepared. Each e-TDS return filed should also be accompanied by a control chart which should be in the newly prescribed form 27A or 27B (for tax collection at source) . The same has to be duly signed by the deductor and submitted alongwith e-TDS to the e-Intermediary. The following specific points must also be noted in filing of e-TDS returns.
(a) Reformatted TAN : All deductors required to e-File TDS returns have to quote their reformatted Tax Deduction Account Number (TAN) in their respective TDS returns. Wherever, reformatted TANs have not been allotted, application in form 49B should be filed with NSDL for obtaining the same.
(b) Each e-TDS return file should be in a separate CD or floppy and should not span across multiple floppies.
Further, label must be affixed on each CD/floppy mentioning the name of the deductor, his stamp, form number and the period to which the return pertains.
(c) There should not be any overwriting, striking on form 27 A or 27 B and if there is, then the same should be ratified by the authorized signatory. Further if any of the controlled totals mentioned in form No. 27A or 27B) (control chart) does not match with that in the e-TDS return, then such returns will not be accepted at the TIN Facilitation Centres.
(d) While filing form no. 24Q and 26Q, deductor should furnish physical copies of certificates of no deduction or deduction at a lower rate of TDS, if any, received from the deductees.
(e) No bank challan, copy of TDS certificate should be furnished alongwith e-TDS return filed.
The e-TDS prepared by the deductor has to be submitted at the TIN Facilitation Centres opened by NSDL which is the e-TDS Intermediary. The addresses of the TIN Facilitation Centres are available at websites of Income-tax Department http:\ www.incometaxindia.gov.in and of NSDL at http:\ www.tin-nsdl.com. It is also to be noted that quarterly TDS returns are also to be filed in Electronic file with e-TDS Intermediary.
5. Checklist for Deductor
After preparing the e-TDS return deductor should check the following to ensure that the e-TDS return is complete and is ready for furnishing to TIN-FC :
• e-TDS return is in conformity with the file format notified by ITD.
• Each e-TDS return (Form 24Q and 26Q) is furnished in a separate CD/floppy alongwith duly filled and signed Form 27A in physical form.
• Separate Form 27A or 27 B in physical form is furnished for each e-TDS return.
• Form 27A or 27 B duly filled and signed by an authorized signatory.
• Striking and overwriting, if any, on Form 27A or 27B ratified by the person who has signed the Form .
• More than one e-TDS return is not furnished in one CD/ floppy.
• More than one CD/floppy is not used for furnishing one e-TDS return.
• Label is affixed on CD/floppy containing details of deductor/collector like name of deductor/collector, TAN, Form no. and period to which return pertains.
• e-TDS return is compressed using Winzip 8.1 or ZipItFast 3.0 compression (or higher version) utility only.
• TAN quoted in e-TDS return and stated on Form 27A or 27 B (for tax collection at source) is same. Confirm new TAN by using search facility on ITD website .
• Carry copy of TAN allotment letter from ITD or screen print from ITD website as proof of TAN to avoid inconvenience at time of furnishing due to minor variation in way of transcribing the new TAN in e-TDS return.
• In case of Government deductors if TAN is not available at the time of furnishing return, application for TAN (Form 49B) should be made along with e-TDS return or copy of acknowledgement of TAN application to be submitted.
• Control totals, TAN and name mentioned in e-TDS return match with those mentioned on Form 27A or 27 B.
• In case of Form 24Q and 26Q, copies of certificates of no deduction of TDS and deduction of TDS at concessional rate, received from deductees are attached.
• e-TDS return has been successfully passed through the FVU.
• CD/floppy furnished is virus free.
6. Quarterly Statements of TDS :
The provisions of quarterly statements of TDS have been introduced in the statute vide section 200(3) w.e.f. 01/04/2005. Every person responsible for deducting tax is required to file quarterly statements of TDS for the quarter ending on 30th June, 30th September, 31st December, and 31st March in each Financial Year. This statement is to be prepared in Form No.26 Q (for TDS other than salaries),Form No.27 EQ ( for Tax collection at source) and 24Q( for salaries), 27Q(for payments other than salary to non-residents) (relevant rule 31A and 31AA) and is to be delivered with prescribed income-tax authority or the person authorized by such authority on or before the 15th July, the 15th October and the 15th January in respect of the first 3 quarters of the Financial Year and on or before the 1 5th June following the last quarter of the Financial Year. However the statement of last quarter in Form 27EQ is to be furnished by 30th April.
With respect to the quarterly statements of TDS, the following points are noteworthy : –
• Every deductor is required to file the quarterly statement of TDS in form specified above for each quarter and as per the dates specified above.
• In case of every Government and Corporate deductor, the quarterly statements are to be delivered on computer readable media (3.5”, 1.44 MB floppy diskette or CD-Rom of 650 MB capacity). The statement in computer readable media is to be prepared as per data structure provided by the e-filing Administrator(DGIT Systems) designated by the Board for purposes of e-TDS Scheme : 2003. Further, a declaration in Form 27A or 27B is also to be submitted in paper format.
• A person other than a Corporate or Government deductor may at his option deliver the quarterly statements in computer readable media as specified above. However, it is not mandatory for him to do so. The scheme has been extended to certain other deductors vide notification 238/2007 dt. 30.8.2007 of CBDT(as discussed at para 8.4 of this booklet).
• The quarterly statements are to be furnished in accordance with the provisions of rule 31A and rule 31AA.
• It is mandatory for the deductor to quote TAN and PAN in the quarterly statements. However, where the deduction has been made by or on behalf of the Government, PAN shall not be required to be quoted in the quarterly statement.
• In the quarterly statements, the deductor is also required to quote the Permanent Account Number (PAN) of all persons in respect of whom Income-tax has been deducted. However, PAN of those persons is not required to be quoted who are specified under second proviso to sub section 5B to section 1 39A. These persons include those who are not required to obtain PAN under any provisions of this Act or those whose total income is not chargeable to Income-tax.
• The deductor is also required to furnish the particulars of tax paid to the Central Government in the quarterly statements.
7. Frequently Asked Questions
1. What is e-TDS Return?
e-TDS return is a TDS return prepared in form No.24Q, 26Q, 27EQ or 27Q in electronic media as per prescribed data structure in either a floppy or a CD ROM. The floppy or CD ROM prepared should be accompanied by a signed verification in Form No.27A or 27B.
2. Who is required to file e-TDS return?
As per Section 206 of Income Tax Act all corporate and government deductors are compulsorily required to file their TDS return on electronic media (i.e. e-TDS returns). However for other Deductors, filing of e-TDS return is optional.
3. Under what provision the e-TDS return should be filed?
An e-TDS return should be filed under Section 206 of the Income Tax Act in accordance with the scheme dated 26.8.03 for electronic filing of TDS return notified by the CBDT for this purpose. CBDT Circular No.8 dated 19.9.03 may also be referred.
4. What are the forms to be used for filing annual/ quarterly TDS/TCS returns?
Following are the returns for TDS and TCS and their periodicity:
|Form 24||Annual return of “Salaries” under Section 206 of Income Tax Act, 1961||Annual|
|Form 26||Annual return of deduction of tax under section 206 of Income Tax Act, 1961 in respect of all payments other than “Salaries”||Annual|
|Form 24Q||Quarterly statement for tax deducted at source from “Salaries”||Quarterly|
|Form 26Q||Quarterly statement of tax deducted at source in respect of all payments other than “Salaries”||Quarterly|
|Form 27EQ||Quarterly statement of tax collection at source||Quarterly|
|Form 27Q||Quarterly statement of deduction of tax from interest, dividend or any other sum (other than salary) payable to non-residents||Quarterly|
|Form 27A||Forms for furnishing information and 27B with the statement of deduction /collection of tax at source filed on computer media||Quarterly|
8. Who is the e-Filing Administrator?
The CBDT has appointed the Director General of Income tax(Systems) as e- Filing Administrator for the purpose of the Electronic Filing of Returns of Tax Deducted at Source Scheme,2003.
9. Who is an e-TDS Intermediary?
CBDT has appointed National Securities Depository Ltd., Mumbai as e-TDS Intermediary.
10. How will the e-TDS returns be prepared?
e-TDS return has to be prepared in the data format issued by e-Filing Administrator. This is available on the websites of Income-tax Department at i.e. http://www.incometaxindia.gov.in and of NSDL at http://www.tin-nsdl.com/. There is a validation software available along with the data structure which should be used to validate the data structure of the e-TDS return prepared. The e-TDS return should have following features:
• Each e-TDS return file (Form 24, 26 or 27Q or 27EQ) should be in a separate CD/floppy.
• Each e-TDS return file should be accompanied by a duly filled and signed (by an authorised signatory) Form 27A/27B in physical form.
• Each e-TDS return file should be in one CD/floppy. It should not span across multiple floppies.
• In case the size of an e-TDS return file exceeds the capacity of one floppy, it should be furnished on a CD.
• In case the e-TDS return file is in a compressed form, it should be compressed using Winzip 8.1 or ZipItFast 3.0 compression utility only to ensure quick and smooth acceptance of the file
• Label should not be affixed on each CD/floppy mentioning name of the deductor, his TAN, Form no. (24, 26 ) and period to which the return pertains.
• There should not be any overwriting / striking on Form 27A/27B. If there is any, then the same should be ratified by an authorised signatory.
• No bank challan, copy of TDS certificate should be furnished alongwith e-TDS return file.
• In case of Form 26 a deductor need not furnish physical copies of certificates of no deduction or lower deduction of TDS received from deductees.
• In case of Form 24 deductor should furnish physical copies of certificates of ‘no deduction or deduction of TDS at lower rate’, if any, received from deductees.
• e-TDS return file should contain TAN of the deductor without which the return will not be accepted.
• CD/floppy should be virus free.
• In case any of these requirements are not met the e-TDS return will not be accepted at TIN- FCs.
11. Can more than one e-TDS return of the same Deductor be prepared in one CD/floppy?
No, separate CD/floppy should be used for each return.
12. Where can the e-TDS return be filed?
e-TDS returns can be filed at any of the TIN-FC opened by the e-TDS Intermediary for this purpose. Addresses of these TIN-FCs are available at the website on http://www.incometaxindia.gov.in or at www.tin-nsdl.com
13. What are the basic details that should be included in the e-TDS return?
Following information must be included in the e-TDS return for successful acceptance. If any of these essential details is missing, the returns will not be accepted at the TIN – Facilitation Centres –
• Correct Tax deduction Account Number (TAN) of the Deductor is clearly mentioned in Form No.27A/27B as also in the e¬TDS return, as required by sub-section (2) of section 203A of the Income-tax Act.
• The particulars relating to deposit of tax deducted at source in the bank are correctly and properly filled in the table at item No.6 of Form No.24 or item No.4 of Form No.26, as the case may be.
• The data structure of the e-TDS return is as per the structure prescribed by the e-Filing Administrator.
• The Control Chart in Form 27A/27B is duly filled in all columns and verified and is enclosed in paper form with the e-TDS return on computer media.
• The Control totals of the amount paid and the tax deducted at source as mentioned at item No.4 of Form No.27A tally with the corresponding totals in the e-TDS return in Form No. 24 or Form No. 26 or Form No.27, as the case may be.
14. What happens if any of the control totals mentioned in Form 27A does not match with that in the e-TDS return?
In such a case the e-TDS return will not be accepted at the TIN Facilitation Centre.
15. What happens in a situation where a deductor does not have TAN or has a TAN in old format?
The Deductor will have to file an application in Form 49B at the TIN Facilitation Centre along with application fee (Rs. 50/-) for TAN.
16. Whether any charges are to be paid to the e¬TDS Intermediary?
The assessee is to pay following charges as upload charges at the time of filing of e-TDS return to M/s NSDL.
|Category of e-TDS return||Upload charges|
|Returns having up to 100 deductees records||Rs.25/-|
|Returns having 101 to 1000 deductees records||Rs. 150/-|
|Returns having more than 1000 deductees records||Rs.500/-|
Tax as applicable will also be paid by the deductor.
17. How to find address of the office where e-TDS return can be filed?
Addresses of the TIN FCs are available on www.incometaxindia.gov.in or at www.tin-nsdl.com.
18. What are the due dates for filing quarterly TDS Returns?
The due dates for filing quarterly TDS returns, both electronic and paper are as under:
|Quarter||Due date||Due date for 27Q|
|April to June||July 15||14 July|
|July to September||October 15||14 October|
|October to December||January 15||14 January|
|January to March||June 15||14 June|
19. E-TDS returns have been made mandatory for Government deductors. How do I know whether I am a Government deductor or not?
All Drawing and Disbursing Officers of Central and State Governments come under the category of Government deductors.
20. Whether the particulars of the whole year or of the relevant quarter are to be filled in Annexures I and II of Form 24Q?
• In Annexure I, only the actual figures for the relevant quarter are to be reported.
• In Annexure II, estimated/actual particulars for the whole financial year are to be given. However, Annexure II is optional in the return for the 1st, 2nd and 3rd quarters but in the quarterly statement for the last quarter, it is mandatory to furnish Annexure II giving actual particulars for the whole financial year.
21. In Form 24Q, should the particulars of even those employees be given whose income is below the threshold limit or in whose case, the income after giving deductions for savings etc. is below the threshold limit?
• Particulars of only those employees are to be reported from the 1st quarter onwards in Form 24Q in whose case the estimated income for the whole year is above the threshold limit.
• In case the estimated income for the whole year of an employee after allowing deduction for various savings like PPF, GPF, NSC etc. comes below the taxable limit, his particulars need not be included in Form 24Q.
• In case due to some reason estimated annual income of an employee exceeds the exemption limit during the course of the year, tax should be deducted in that quarter and his particulars reported in Form 24Q from that quarter onwards.
22. How are the particulars of those employees who are with the employer for a part of the year to be shown in Form 24Q?
• Where an employee has worked with a deductor for part of the financial year only, the deductor should deduct tax at source from his salary and report the same in the quarterly Form 24Q of the respective quarter(s) up to the date of employment with him. Further, while submitting Form 24Q for the last quarter, the deductor should include particulars of that employee in Annexures II & III irrespective of the fact that the employee was not under his employment on the last day of the year.
• Similarly, where an employee joins employment with as deductor during the course of the financial year, his TDS particulars should be reported by the current deductor in Form 24Q of the relevant quarter. Further, while submitting Form 24Q for the last quarter, the deductor should include particulars of TDS of such employee for the actual period of employment under him in Annexures II .
23. Form 24Q shows a column which requires explanation for lower deduction of tax. How can a DDO assess it? Please clarify.
Certificate for lower deduction or no deduction of tax from salary is given by the Assessing Officer on the basis of an application made by the deductee. In cases where the Assessing Officer has issued such a certificate to an employee, deductor has to only mention whether no tax has been deducted or tax has been deducted at lower rate on the basis of such a certificate.
24. Can I file Form 26Q separately for contractors, professionals, interest etc.?
No, A single Form 26Q with separate annexures for each type of payment has to be filed for all payments made to residents.
25. From which financial year will the Annual Statement under Sec. 203AA (Form No.26AS) be issued?
The annual statement (Form No 26AS) will be issued for all tax deducted and tax collected at source from F.Y 2008-09 onwards after the expiry of the financial year.
26. How will the PAN wise ledger account be created by the intermediary i.e. NSDL in respect of payment of TDS made by deductors in Banks.
The PAN wise ledger account will be created after matching the information in the TDS/TCS returns filed by the deductor/ collector and the details of tax deposited in banks coming through OLTAS.
27. What essential information will be required to be given in the quarterly statement to enable accurate generation of PAN wise ledger account?
The accuracy of PAN wise ledger account will depend on:-
• Correct quoting of TAN by the deductor.
• Correct quoting of PAN of deductor
• Correct and complete quoting of PAN of deductee.
• Correct quoting of CIN ( challan identification number) wherever payment is made by challan.
28. Will a deductee be able to view his ledger account on TIN website?
29. If a deductee finds discrepancy in his PAN ledger account, what is the mechanism available for correction?
The details regarding the help required for filing of e-TDS are available on the following two websites:
The TIN Facilitation Centers of the NSDL at over 270 cities are also available for all related help in the e-filing of the TDS returns.
30. Whether the e-TDS can be filed online?
Yes, e-TDS return can be filed online under digital signature.
31. Will the Paper TDS data be available online on TIN database?
Yes, the Paper TDS data will also be available in TIN database after the digitalization of the Paper TDS return by the e-intermediary.
32. I do not know the Bank branch code of the branch in which I deposited tax. Can I leave this field blank?
Bank Branch code or BSR code is a 7 digit code allotted to banks by RBI. This is different from the branch code which is used for bank drafts etc. This no. is given in the OLTAS challan or can be obtained from the bank branch or from http://www.tin-nsdl.com/. It is mandatory to quote BST code both in challan details and deductee details. Hence, this field cannot be left blank. Government deductors transfer tax by book entry, in which case the BSR code can be left blank.
33. What should I mention in the field “paid by book entry or otherwise” in deduction details?
If payment to the parties (on which TDS has been deducted) has been made actually i.e. by cash, cheque, demand draft or any other acceptable mode, then “otherwise” has to be mentioned in the specified field. But if payment has not been actually made and merely a provision has been made on the last date of the accounting year, then the option “Paid by Book Entry” has to be selected.
34. What is the “Upload File” in the new File Validation Utility?
Earlier the “Input file” of the File Validation Utility (FVU) had to be filed with TIN FC. Now “Upload File” which has some additional information such as the version no. of FVU has to be filed with TIN FC. This is a file which is generated by the FVU after the return /file prepared by the Return Preparation Utility (RPU) is validated using the FYU.
35. By whom should the control chart Form 27A be signed?
Form 27A is the summary of the TDS return. It has to be signed by the same person who is authorized to sign the TDS return in paper format.
36. What are the Control Totals appearing in the Error / response File generated by validating the text file through File Validation Utility (FVU) of NSDL?
The Control Totals in Error response File are generated only when a valid file is generated. Otherwise, the file shows the kind of errors. The control totals are as under:
• No. of deductee/party records: In case of Form 24, it is equal to the number of employees for which TDS return is being prepared. In case of Form 26/ 27, it is equal to the total number of records of tax deduction. 10 payments to 1 party would mean 10 deductee records.
• Amount Paid: This is the Total Amount of all payments made on which tax was deducted. In case of Form 24, it is equal to the Total Taxable Income of all the employees. In case of Form 26/27, Amount Paid is equal to the total of all the amounts on which tax has been deducted at source.
• Tax Deducted: This is the Total Amount of Tax actually Deducted at source for all payments.
• Tax deposited: This is the total of all the deposit challans. This is normally the same as Tax Deducted but at times may be different due to interest or other amount.
37. Are the control totals appearing in Form 27A same as that of Error! response File?
Yes, the control totals in Form 27A and in Error/ response File are same.
38. What if e-TDS return does not contain PANs of all deductees?
In case PANs of some of the deductees are not mentioned in the e-TDS return, the Provisional Receipt will mention the count of missing PANs in the e-TDS return. The details of missing PANs (extent it can be collected from the deductees) may be furnished within seven days of the date of Provisional Receipt to TIN- FC. e¬TDS return will be accepted even with missing PANs. However, if PAN of deductees is not given in the TDS return, tax deducted from payment made to him cannot be posted to the statement of TDS to be issued to him u/s. 203AA.
39. Is the bank challan number compulsory?
Yes. Challan identification number is necessary for all non government deductors.
40. Will the quarterly paper returns be accepted by the Income tax department?
No, All quarterly paper TDS/TCS returns will be received at TIN-FCs
41. Is PAN mandatory for deductor and employees! deductees ?
PAN of the deductors has to be given by non government deductors. It is essential to quote PAN of all deductees failing which credit of tax deducted will not be given.