Budget 2015-16 -Rationalisation of provisions relating to Tax Deduction at Source (TDS) and Tax Collection at Source (TCS)

Under Chapter XVII-B of the Act, a person is required to deduct tax on certain specified payment at the specified rate if the payment exceeds the specified threshold. The person deducting tax (‘the deductor’) is required to file a quarterly Tax Deduction at Source (TDS) statement containing the details of deduction of tax made during the quarter by the prescribed due date. Similarly, under Chapter XVII-BB of the Act, a person is required to collect tax on certain specified receipts at the specified rates. The person collecting tax (‘the collector’) also is required to file a quarterly Tax Collection at Source (TCS) statement containing the details of collection of tax made during the quarter by the prescribed due date.

In order to provide effective deterrence against delay in furnishing of TDS/TCS statement, the Finance Act, 2012 inserted section 234E in the Act to provide for levy of fee for late furnishing of TDS/TCS statement. The levy of fee under section 234E of the Act has proved to be an effective tool in improving the compliance in respect of timely submission of TDS/TCS statement by the deductor or collector.

Finance (No.2) Act, 2009 inserted section 200A in the Act which provides for processing of TDS statements for determining the amount payable or refundable to the deductor. However, as section 243E was inserted after the insertion of section 200A in the Act, the existing provisions of section 200A of the Act does not provide for determination of fee payable under section 234E of the Act at the time of processing of TDS statements. It is, therefore, proposed to amend the provisions of section 200A of the Act so as to enable computation of fee payable under section 234E of the Act at the time of processing of TDS statement under section 200A of the Act.

Currently, the provisions of sub-section (3) of section 200 of the Act enable the deductor to furnish TDS correction statement and consequently, section 200A of the Act allows processing of the TDS correction statement. However, currently, there does not exist any provision for allowing a collector to file correction statement in respect of TCS statement which has been furnished. It is, therefore, proposed to amend the provisions of section 206C of the Act so as to allow the collector to furnish TCS correction statement.

Currently, there does not exist any provision in the Act to enable processing of the TCS statement filed by the collector as available for processing of TDS statement. As the mechanism of TCS statement is similar to TDS statement, it is proposed to insert a provision in the Act for processing of TCS statements on the line of existing provisions for processing of TDS statement contained in section 200A of the Act. The proposed provision shall also incorporate the mechanism for computation of fee payable under section 234E of the Act.

Under the existing provisions of the Act, after processing of TDS statement, an intimation is generated specifying the amount payable or refundable. This intimation generated after processing of TDS statement is (i) subject to rectification under section 154 of the Act; (ii) appealable under section 246A of the Act; and (iii) deemed as notice of demand under section 156 of the Act. As the intimation generated after the proposed processing of TCS statement shall be at par with the intimation generated after processing of TDS statement, it is, further, proposed to provide that intimation generated after processing of TCS statement shall also be—

(i)      subject to rectification under section 154 of the Act;

(ii)     appealable under section 246A of the Act; and

(iii) deemed as notice of demand under section 156 of the Act.

Further, as the intimation generated after proposed processing of TCS statement shall be deemed as a notice of demand under section 156 of the Act, the failure to pay the tax specified in the intimation shall attract levy of interest as per the provisions of section 220(2) of the Act. However, section 206C (7) of the Act also contains provisions for levy of interest for non-payment of tax specified in the intimation to be issued. To remove the possibility of charging interest on the same amount for the same period of default both under section 206C (7) and section 220(2) of the Act, it is proposed to provide that where interest is charged for any period under section 206C (7) of the Act on the tax amount specified in the intimation issued under proposed provision, then, no interest shall be charged under section 220(2) of the Act on the same amount for the same period.

Under the existing scheme of payment of TDS and TCS, Government deductors/collectors are allowed to make payment of tax deducted/collected by them without production of challan i.e. through book entry. For payment of tax deducted/collected through book entry, the Drawing and Disbursing Officer (DDO) intimates the TDS/TCS amount to the Pay and Accounts Officer or the Treasury Officer or the Cheque Drawing and Disbursing Officer (PAO/TO/CDDO) who credits the TDS/TCS amount to the credit of Central Government through book entry. For generating credit for TDS/TCS paid through book entry by the Government deductors, a system of capturing information from PAO/TO/CDDO has been introduced by amending rule 30 and rule 37CA of the Income-tax Rules, 1962 with effect from 1.4.2010. The said rules provide that the PAO/TO/CDDO shall file the detail of payment of TDS/TCS made through book entry in the prescribed Form 24G. This system of reporting of payment of TDS/TCS made through book entry has improved the mechanism of reporting of TDS/TCS by the Government deductor to some extent. However, in the absence of any specific provisions in the Act for enforcing the same, it has been noticed that in a large number of cases, PAO/ TO/CDDOs do not file Form 24G in prescribed time. Delay in furnishing of the Form 24G results into delay in furnishing of the TDS/TCS statement by the DDO. In order to improve the reporting of payment of TDS/TCS made through book entry and to make existing mechanism enforceable, it is proposed to amend the provisions of sections 200 and 206C of the Act to provide that where the tax deducted [including paid under section 192(1A)] / collected has been paid without the production of a challan, the PAO/ TO/CDDO or any other person by whatever name called who is responsible for crediting such sum to the credit of the Central Government, shall furnish within the prescribed time a prescribed statement for the prescribed period to the prescribed income-tax authority or the person authorised by such authority by verifying the same in the prescribed manner and setting forth prescribed particulars. To ensure compliance of this proposed obligation of filing statement, it is proposed to amend the provisions of section 272A of the Act so as to provide for a penalty of Rs.100/- for each day of default during which the default continues subject to the limit of the amount deductible or collectible in respect of which the statement is to be furnished.

Under section 192 of the Act, the person responsible for paying (DDO) income chargeable under the head “salaries” under the Act is authorised to allow certain deductions, exemptions or allowances or set-off of certain loss as per the provisions of the Act for the purposes of estimating income of the assessee or computing the amount of the tax deductible under the said section. The evidence/proof/particulars for some of the deductions/exemptions/allowances/set-off of loss claimed by the employee such as rent receipt for claiming exemption of HRA, evidence of interest payments for claiming loss from self occupied house property etc. is generally not available with the DDO. In these circumstances, the DDO has to depend upon the evidence/particulars furnished, if any, by the employees in support of their claim of deductions, exemptions, etc. As the existing provisions of the Act do not contain any guidance regarding nature of evidence/documents to be obtained by the DDO, there is no uniformity in the approach of the DDO in this matter. In order to bring clarity in this matter, it is proposed to amend the provisions of section 192 of the Act to provide that the person responsible for paying, for the purposes of estimating income of the assessee or computing tax deductible under section 192(1) of the Act, shall obtain from the assessee evidence or proof or particulars of the prescribed claim (including claim for set-off of loss) under the provisions of the Act in the prescribed form and manner.

The existing provisions of sub-section (6) of section 195 of the Act provide that the person referred to in section 195(1) of the Act shall furnish prescribed information. Section 195(1) of the Act provides that any person responsible for paying any interest( other than interest referred to in sections 194LB or 194LC or 194LD of the Act) or any sum chargeable to tax (not being salary income) to a non-resident, not being a company, or to a foreign company, shall deduct tax at the rates in force. The mechanism of obtaining of information in respect of remittances fulfils twin objectives of ensuring deduction of tax at appropriate rate from taxable remittances as well as identifying the remittances on which the tax was deductible but the payer has failed to deduct the tax. Therefore, obtaining of information only in respect of remittances which the remitter declared as taxable defeats one of the main principles of obtaining information for foreign remittances i.e. to identify the taxable remittances on which tax was deductible but was not deducted. In view of this, it is proposed to amend the provisions of section 195 of the Act to provide that the person responsible for paying any sum, whether chargeable to tax or not, to a non-resident, not being a company, or to a foreign company, shall be required to furnish the information of the prescribed sum in such form and manner as may be prescribed. Further, currently there is no provision for levying of penalty for non-submission/inaccurate submission of the prescribed information in respect of remittance to non-resident. For ensuring submission of accurate information in respect of remittance to non-resident, it is further proposed to insert a new provision in the Act to provide that in case of non-furnishing of information or furnishing of incorrect information under sub-section (6) of section 195(6) of the Act, a penalty of one lakh rupees shall be levied. It is also proposed to amend the provisions of section 273B of the Act to provide that no penalty shall be imposable under this new provision if it is proved that there was reasonable cause for non-furnishing or incorrect furnishing of information under sub-section (6) of section 195 of the Act.

These amendments will take effect from 1st June, 2015.

NOTE ON RELEVANT CLAUSES  OF FINANCE BILL 2015

Clause 37 of the Bill seeks to amend section 154 of the Income-tax Act relating to rectification of mistake.

It is proposed to insert a new clause (d) in sub-section (1) of the aforesaid section so as to provide that an income-tax authority may amend an intimation issued under sub-section (1) of section 206CB.

It is further proposed to amend sub-section (2) of the aforesaid section to insert the reference of “collector” in addition to assessee or deductor, so as to enable him to file an application under the said section.

It is also proposed to amend sub-section (3) of the aforesaid section to insert the reference of “collector” in addition to assessee or deductor, so as to provide a reasonable opportunity of being heard to collector in accordance with the provision of said sub-section.

It is also proposed to amend sub-section (5) of the aforesaid section to insert the reference of “collector” in addition to assessee or deductor, so as to enable issue of refund to the collector in accordance with the provisions of said sub-section.

It is also proposed to amend sub-section (6) of the aforesaid section to insert the reference of “collector” in addition to assessee or deductor, so as to enable service of notice of demand on the collector in accordance with the provisions of said sub-section.

It is also proposed to amend sub-section (8) of the aforesaid section to insert the reference of “collector” in addition to assessee or deductor so as to provide that where an application for amendment under the aforesaid section is filed by the collector, the income-tax authority shall pass an order within the time specified therein.

These amendments will take effect from 1st June, 2015.

Clause 38 of the Bill seeks to amend section 156 of the Income-tax Act relating to notice of demand.

The existing provisions contained in the proviso to the aforesaid section provide that where any sum is determined to be payable by the assessee or by the deductor under sub-section (1) of section 143 or sub-section (1) of section 200A, the intimation under those sub-sections shall be deemed to be a notice of demand for the purposes of this section.

It is proposed to amend the aforesaid proviso to section 156 so as to provide that where any sum is determined to be payable by the assessee or the deductor or the collector under sub-section (1) of section 143 or sub-section (1) of section 200A or sub-section (1) of section 206CB, the intimation under those sub-sections shall be deemed to be a notice of demand for the purposes of this section.

This amendment will take effect from 1st June, 2015.

Clause 40 of the Bill seeks to amend section 192 of the Income-tax Act relating to salary.

Under the existing provisions contained in sub-section (1) of the aforesaid section, any person responsible for paying any income chargeable under the head “Salaries” shall, at the time of payment, deduct income-tax on the amount payable at the average rate of income-tax computed on the basis of the rates in force for the financial year in which the payment is made on the estimated income of the assessee under the head “Salaries” for that financial year.

It is proposed to insert sub-section (2D) in the said section to provide that the person responsible for making the payment referred to in sub-section (1) of the said section shall, for the purposes of estimating income of the assessee or computing tax deductible under sub-section (1), obtain from the assessee the evidence or proof or particulars of prescribed claims (including claim for set-off of loss) under the provisions of the Act in such form and manner as may be prescribed.

This amendment will take effect from 1st June, 2015.

Clause 48 of the Bill seeks to amend section 195 of the Income-tax Act relating to other sums.

The existing provisions contained in sub-section (6) of the aforesaid section provide that the person referred to in sub-section (1) shall furnish the information relating to payment of any sum in such form and manner as may be prescribed by the Board.

It is proposed to substitute sub-section (6) of the aforesaid section so as to provide that the person responsible for paying to a non-resident, not being a company, or to a foreign company, any sum, whether or not chargeable under the provisions of this Act, shall furnish the information relating to payment of such sum,in such form and manner, as may be prescribed.

This amendment will take effect from 1st June, 2015.

Clause 50 of the Bill seeks to amend section 200 of the Income-tax Act relating to duty of the person deducting tax.

The existing provisions contained in sub-section (1) of the aforesaid section provide that any person deducting any sum in accordance with the provisions of Chapter XVII shall pay within the prescribed time the sum so deducted to the credit of the Central Government or as the Board directs. The existing provisions contained in sub-section (2) of the said section provide that the employer referred to in sub-section (1A) of section 192 shall pay within the prescribed time, the tax to the credit of the Central Government or as the Board directs.

It is proposed to insert sub-section (2A) in the said section to provide that in case of an office of the Government, where the sum deducted in accordance with the foregoing provisions of this Chapter or tax referred to in sub-section (1À) of section 192 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, who is responsible for crediting such sum or tax to the credit of the Central Government, shall deliver or cause to be delivered to the prescribed income-tax authority, or to the person authorised by such authority, a statement in such form, verified in such manner, setting forth such particulars and within such time as may be prescribed.

This amendment will take effect from 1st June, 2015.

Clause 51 of the Bill seeks to amend section 200A of the Income-tax Act relating to processing of statements of tax deducted at source.

The existing provisions contained in sub-section (1) of the aforesaid section provide that statement of tax deduction at source or a correction statement made under section 200 shall be processed in the manner specified therein.

It is proposed to amend sub-section (1) of the said section to provide that statement of tax deduction at source or correction statement made under section 200 shall be processed and sum deductible under Chapter XVII shall be computed after also taking into account the fee, if any, payable in accordance with the provisions of section 234E. The sum payable or refundable shall be determined after adjusting the aforesaid computed sum against any amount paid under section 200 or section 201 or section 234E and any amount paid otherwise by way of tax or interest or fee.

This amendment will take effect from 1st June, 2015.

Clause 53 of the Bill seeks to amend section 206C of the Income-tax Act relating to profit and gains from the business of trading in alcoholic liquor, forest produce, scrap, etc.

The existing provisions contained in sub-section (3) of the aforesaid section provide that any person collecting any amount under sub-section (1) or sub-section (1C) or sub-section (1D) shall pay within the prescribed time, the amount so collected to the credit of the Central Government or as the Board directs.

It is proposed to insert sub-section (3A) in the said section to provide that in case of an office of the Government, where the amount collected under sub-section (1) or sub-section (1C) or sub-section (1D) has been paid to the credit of the Central Government without the production of a challan by the Pay and Accounts Officer or the Treasury Officer or the Cheque Drawing and Disbursing Officer or any other person, by whatever name called, who is responsible for crediting such tax to the credit of the Central Government, shall deliver or cause to be delivered to the prescribed income-tax authority, or to the person authorised by such authority, a statement in such form, verified in such manner, setting forth such particulars and within such time as may be prescribed.

The existing provisions contained in the proviso to sub-section (3) of the said section provide that any person collecting tax on or after 1st April, 2005 in accordance with the provisions of the said section shall, after paying the tax collected to the credit of the Central Government within the prescribed time, prepare such statements for such period as may be prescribed and deliver or cause to be delivered to the prescribed authority, or to the person authorised by such authority, such statement in such form and verified in such manner and setting forth such particulars and within such time as may be prescribed.

It is proposed to insert sub-section (3B) in the said section so as to provide that the person referred to in proviso to sub-section (3) may also deliver to the prescribed authority under the said proviso, a correction statement for rectification of any mistake or to add, delete or update the information furnished in the statement delivered under the said proviso in such form and verified in such manner, as may be specified by the authority.

This amendment will take effect from 1st June, 2015.

Clause 54 of the Bill seeks to insert a new section 206CB of the Income-tax Act relating to processing of statements of tax collected at source.

The existing provisions contained in the Income-tax Act provide the method of processing of statements of tax deducted at source. Since there is no procedure specified with respect to the processing of tax collected at source, it is proposed to insert a new section 206CB relating to processing of statements of tax collected at source and the said section provide that statement of tax collection at source or a correction statement made under section 206C shall be processed in the manner specified therein.

This amendment will take effect from 1st June, 2015.

Clause 55 of the Bill seeks to amend section 220 of the Income-tax Act relating to when tax payable and when assessee deemed in default.

It is proposed to insert sub-section (2C) in the aforesaid section so as to provide that notwithstanding anything contained in sub¬section (2) of section 220, where interest is charged under sub¬section (7) of section 206C on the amount of tax specified in the intimation issued under sub-section (1) of section 206CB for any period, then, no interest shall be charged under the said sub¬section (2) on the same amount for the same period.

This amendment will take effect from 1st June, 2015.

Clause 62 of the Bill seeks to amend section 246A of the Income-tax Act relating to appealable order before Commissioner (Appeals).

The existing provisions of aforesaid section, inter alia, provide for appeal to be preferred by any assessee or deductor to the Commissioner (Appeals) as against the orders passed under various provisions of the Income-tax Act as specified in sub-section (1) thereof. It is proposed to include the reference of “any collector”, in addition to any assessee or any deductor, in sub¬section (1) of the said sub-section so as to enable such collector also to prefer an appeal under the said section.

It is further proposed to amend clause (a) of sub-section (1) of the said section so as to provide that the collector may prefer an appeal to the Commissioner (Appeals) against an intimation issued under sub-section (1) of section 206CB.

This amendment will take effect from 1st June, 2015.

Clause 73 of the Bill seeks to insert a new section 271-I in the Income-tax Act relating to penalty for failure to furnish information or for furnishing inaccurate information under section 195.

It is proposed to insert a new section 271-I so as to provide that if a person, who is required to furnish information under sub¬section (6) of section 195, fails to furnish such information; or furnishes inaccurate information, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of one lakh rupees.

This amendment will take effect from 1st June, 2015.

Clause 74 of the Bill seeks to amend section 272A of the Income-tax Act relating to penalty for failure to answer questions, sign statements, furnish information, returns or statements, allow inspections, etc.

The proposed amendment seeks to insert a new clause (m) in sub-section (2) of the aforesaid section to provide that if any person fails to deliver or cause to be delivered a statement within the time as may be prescribed under sub-section (2A) of section 200 or sub-section (3A) of section 206C, then, such person shall pay, by way of penalty, a sum of one hundred rupees for every day of such default.

It is also proposed to amend first proviso to sub-section (2) of the said section so as to provide that the amount of penalty for failure to file statements under sub-section (2A) of section 200 or under sub-section (3A) of section 206C shall not exceed the amount of tax deductible or tax collectible, as the case may be.

These amendments will take effect from 1st June, 2015.

Clause 75 of the Bill seeks to amend section 273B of the Income-tax Act relating to penalty not to be imposed in certain cases.

The section provides for non-levy of penalty under various sections of the Income-tax Act enumerated in the said section, if the assessee is able to show existence of reasonable cause for the failure for which penalty is leviable.

It is proposed to amend the aforesaid section so as to include the proposed new section 271 FAB relating to penalty for failure to furnish statement or information or document by an eligible investment fund.

It is further proposed to amend the said section to include the reference of the proposed new section 271GA relating to penalty for failure to furnish information or document under section 285A.

These amendments will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016- 17 and subsequent years.

It is also proposed to amend the aforesaid section so as to include the reference of new section 271-I.

This amendment will take effect from 1st June, 2015.

EXTRACT OF RELEVANT CLAUSES FROM FINANCE BILL 2015

37. Amendment of section 154.

In section 154 of the Income-tax Act, with effect from the 1st day of June, 2015,—

(i) in sub-section (1), after clause (c), the following clause shall be inserted, namely:—

 “(d) amend any intimation under sub-section (1) of section 206CB.”;

(ii)      in sub-section (2), in clause (b), after the words “or by the deductor”, the words “or by the collector” shall be inserted;

(iii)     in sub-section (3), after the words “or the deductor” wherever they occur, the words “or the collector” shall be inserted;

 (iv) in sub-section (5), after the words “or the deductor” at both the places where they occur, the words “or the collector” shall be inserted;

(v)      in sub-section (6), after the words “or the deductor” at both the places where they occur, the words “or the collector” shall be inserted;

(vi)     in sub-section (8), after the words “or by the deductor”, the words “or by the collector” shall be inserted.

38. Amendment of section 156.

  In section 156 of the Income-tax Act, in the proviso, with effect from the 1st day of June, 2015, for the words, brackets, figures and letter “by the deductor under sub-section (1) of section 143 or sub-section (1) of section 200A”, the words, brackets, figures and letters “the deductor or the collector under sub-section (1) of section 143 or sub-section (1) of section 200A or sub-section (1) of section 206CB” shall be substituted.

40. Amendment of section 192.

In section 192 of the Income-tax Act, after sub-section (2C), the following sub-section shall be inserted with effect from the 1st day of June, 2015, namely:—

“(2D) The person responsible for making the payment referred to in sub-section (1) shall, for the purposes of estimating income of the assessee or computing tax deductible under sub-section (1), obtain from the assessee the evidence or proof or particulars of prescribed claims (including claim for set-off of loss) under the provisions of the Act in such form and manner as may be prescribed.”.

48. Amendment of section 195.

In section 195 of the Income-tax Act, for sub-section (6), the following sub-section shall be substituted with effect from the 1st day of June, 2015, namely:—

“(6) The person responsible for paying to a non-resident, (not being a company), or to a foreign company, any sum, whether or not chargeable under the provisions of this Act, shall furnish the information relating to payment of such sum, in such form and manner, as may be prescribed.”.

50. Amendment of section 200.

In section 200 of the Income-tax Act, after sub-section (2), the following sub-section shall be Amendment of inserted with effect from the 1st day of June, 2015, namely:—

“(2A) In case of an office of the Government, where the sum deducted in accordance with the foregoing provisions of this Chapter or tax referred to in sub-section (1À) of section 192 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, who is responsible for crediting such sum or tax to the credit of the Central Government, shall deliver or cause to be delivered to the prescribed income-tax authority, or to the person authorised by such authority, a statement in such form, verified in such manner, setting forth such particulars and within such time as may be prescribed.”.

51. Amendment of section 200A.

In section 200A of the Income-tax Act, in sub-section (1), for clauses (c) to (e), the following Amendment of clauses shall be substituted with effect from the 1st day of June, 2015, namely:—

“(c) the fee, if any, shall be computed in accordance with the provisions of section 234E;

(d)      the sum payable by, or the amount of refund due to, the deductor shall be determined after adjustment of the amount computed under clause (b) and clause (c) against any amount paid under section 200 or section 201 or section 234E and any amount paid otherwise by way of tax or interest or fee;

(e)      an intimation shall be prepared or generated and sent to the deductor specifying the sum determined to be payable by, or the amount of refund due to, him under clause (d); and

(f) the amount of refund due to the deductor in pursuance of the determination under clause (d) shall be granted to the deductor.”.

5. Amendment of section 206C.

In section 206C of the Income-tax Act, after sub-section (3), the following sub-sections shall be inserted with effect from the 1st day of June, 2015, namely:—

 “(3A) In case of an office of the Government, where the amount collected under sub-section (1) or sub-section (1C) or sub-section (1D) 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, who is responsible for crediting such tax to the credit of the Central Government, shall deliver or cause to be delivered to the prescribed income-tax authority, or to the person authorised by such authority, a statement in such form, verified in such manner, setting forth such particulars and within such time as may be prescribed.

(3B) The person referred to in the proviso to sub-section (3) may also deliver to the prescribed authority under the said proviso, a correction statement for rectification of any mistake or to add,   delete or update the information furnished in the statement delivered under the said proviso in such form and verified in such manner, as may be specified by the authority.”.

54. Insertion of new section 206CB.

Processing of statements of tax collected at source.

After section 206CA of the Income-tax Act, the following section shall be inserted with effect from the 1st day of June, 2015, namely:—

‘206CB. (1) Where a statement of tax collection at source or a correction statement has been made by a person collecting any sum (herein referred to as collector) under section 206C, such statement shall be processed in the following manner, namely:—

(a) the sums collectible under this Chapter shall be computed after making the following adjustments, namely:—

(i)       any arithmetical error in the statement;

(ii)      an incorrect claim, apparent from any information in the statement;

(b) the interest, if any, shall be computed on the basis of the sums collectible as computed in the statement;

(c)      the fee, if any, shall be computed in accordance with the provisions of section 234E;

(d)      the sum payable by, or the amount of refund due to, the collector, shall be determined after adjustment of the amount computed under clause (b) and clause (c) against any amount paid   under section 206C or section 234E and any amount paid otherwise by way of tax or interest or fee;

(e)      an intimation shall be prepared or generated and sent to the collector specifying the sum determined to be payable by, or the amount of refund due to, him under clause (d); and

(f)       the amount of refund due to the collector in pursuance of the determination under clause (d) shall be granted to the collector:

Provided that no intimation under this sub-section shall be sent after the expiry of the period of one year from the end of the financial year in which the statement is filed.

Explanation.—For the purposes of this sub-section, “an incorrect claim apparent from any information in the statement” shall mean a claim, on the basis of an entry, in the statement—         

(i) of an item, which is inconsistent with another entry of the same or some other item in such statement;

(ii) in respect of rate of collection of tax at source, where such rate is not in accordance with the provisions of this Act.

(2) The Board may make a scheme for centralised processing of statements of tax collected at source to expeditiously determine the tax payable by, or the refund due to, the collector, as required 5   under sub-section (1).’

55. Amendment of section 220.

In section 220 of the Income-tax Act, after sub-section (2B), the following sub-section shall be inserted with effect from the 1st day of June, 2015, namely:—

“(2C) Notwithstanding anything contained in sub-section (2), where interest is charged under sub-section (7) of section 206C on the amount of tax specified in the intimation issued under sub-section (1) of section 206CB for any period, then, no interest shall be charged under sub section (2) on the same amount for the same period.”.     

62. Amendment of section 246A.

In section 246A of the Income-tax Act, in sub-section (1), with effect from the 1st day of June, 2015,—

(a) in the opening portion, after the words “or any deductor”, the words “or any collector” shall be inserted;

(b) in clause (a), for the words, brackets, figures and letter “sub-section (1) of section 200A, where the assessee or the deductor”, the words, brackets, figures and letters “sub-section (1) of section 200A or sub-section (1) of section 206CB, where the assessee or the deductor or the collector” shall be substituted.

73. Insertion of new section 271-I.

Penalty for failure to furnish information or furnishing inaccurate information under section 195.

After section 271H of the Income-tax Act, the following section shall be inserted with effect from the 1st day of June, 2015, namely:—

“271-I. If a person, who is required to furnish information under sub-section (6) of 45 section 195, fails to furnish such information; or furnishes inaccurate information, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of one lakh rupees.”.

74. Amendment of section 272A.

In section 272A of the Income-tax Act, in sub-section (2), with effect from the 1st day of June, 2015,—

(a)      after clause (l), the following clause shall be inserted, namely:—

“(m) to deliver or cause to be delivered a statement within the time as may be prescribed under sub-section (2A) of section 200 or sub-section (3A) of section 206C,”;

(b)      in the first proviso, for the words, brackets, figures and letter “statements under sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C”, the words, brackets, figures and 5 letters “statements under sub-section (2A) or sub-section (3) of section 200 or the proviso to sub-section (3) or under sub-section (3A) of section 206C” shall be substituted.

75. Amendment of section 273B.

In section 273B of the Income-tax Act,—

(I)       for the words, figures and letters “section 271 FB, section 271 G”, the words, figures and letters “section 271 FAB, section 271 FB, section 271 G, section 271 GA” shall be substituted with effect from the 1st day of April, 2016;

(II)      after the word, figures and letter “section 271H”, the word, figures and letter “section 271-I,” shall be inserted with effect from the 1st day of June, 2015.

( Compiled by Taxguru Team)

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Type : Articles (13240)
Tags : Budget (1472) Budget 2015-16 (272) section 195 (136) Section 220 (5) Section 234E (51) Section 271H (9) Section 272A (6) tcs (177) TDS (869)

0 responses to “Rationalisation of provisions relating to TDS and TCS”

  1. Adwin Anil Saldanha says:

    Dear Sir,
    I am a NRI working in kuwait. Sir, I had invested in SBI Life Insurance traditional policy-Setubandhan on 26th May 2005 a single premium sum of 3 Lakhs. Sir, it is matured on 26th May 2015 (though not credited yet, due to tax problems). Sir, it had become 4.5 lakhs ( as 5% guaranteed addition). It is funded from my NRE account. Now first they said they will deduct 30.9% from the total 4.5 lakhs and will credit 3.1 Lakh. When I said out of 4.5 lakhs 3 lakhs is my capital investment, i got one more calculation saying that deduction of 30.9% only on accrued 1.5 lakhs. But your website including so many other websites say that tds is only 2% or the maturity proceeds are tax free. If i ask them for the basis of calculation, they i do not get any reply for them. Sir, what is actually correct. Sir, please help me to understand this and help me to resolve the matter as an amount of 4.5 lakhs of mine is just hanging with them without any returns from almost 23 days. Thank you Sir.

  2. Ganesh says:

    What about the cases where the fee has been paid or the Dept. has adjusted the 234E dues against the Income tax refund payable to the assessee?

    Is there any remedy to claim refund of the same?

  3. CA NAVEEN KUMAR GOYAL says:

    amend. in section 200A in Budget 2015 means notice u/s 200A issued earlier by AO CPC for late fees u/s 234E are invalid and void, without any authority of law.

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