Provision before Amendment by Union Budget 2010
The existing provisions contained in subsection 3 of Section 203 states that there is no requirement to issue a certificate by the deductor to the deductee if TDS has been deducted and paid as per the provisions of chapter XVII B. Similarly the first proviso to subsection 5 of Section 206C of the Act prescribes that there is no requirement of TCS certificate to be issued in case the tax has been collected and paid as per Section 206C.
Amendment made in Union Budget 2010
Subsection 3 of section 203 of the Act is amended, to make it mandatory for the deductor of TDS to issue a TDS certificate as per the provisions laid down in subsection 1 & 2 of section 203 of the Act. Omission of subsection 3 would make issuance of TDS Certificate a mandatory exercise as it has been in the past. The first proviso to subsection 5 of Section 206C of the Act has been deleted, so as to make the issuance of TCS certificate as a mandatory exercise as per subsection 5 of section 206C of the Act.
Analysis & Comments
The present proposal to make the issuance of TDS/TCS certificates mandatory by the deductor / collector is a silent rollback of the compliance reforms and reduction of paperwork. The whole concept of doing away with the paper TDS/TCS certificates was to promote the mechanism of providing credit due to online systems based on the e-filed returns of the deductor and the matching PAN of the deductee/assessee. At the same time, it provided for the safeguard against malpractices pertaining to bogus TDS/TCS certificate, as only system reporting credits were provided. But as always the entire implementation of system were faulty from both the sides at one side being the revenue department providing credit and at the other side a big populace of Indian assessees always pointing finger of inefficiency at the Government without performing their own timely compliance, of course with a small section of exceptions. So, the days of issuing the paper certificates will be back and the assessee may be asked to produce them with the department for getting the credit of the same. All assessees will mandatorily have to issue TDS /TCS certificate in case if they are covered under the provisions of chapter XVII B. Also this amendment being in retrospective from 1st April, 2010, even for the ongoing financial year the TDS/TCS certificates will have to be issued by all the deductor /collector.
This amendment will take effect retrospectively from 1st April, 2010, and will, accordingly, apply in relation to the assessment year 2010-2011 and subsequent years.
It is good to issue TDS certificates, since many assessee will not be knowing whether the payer has deducted the TDS or not? Even if the payer has deducted, whether he has remitted to the government. Hence, In order to claim correct TDS amount, it is better on the part of the deductor to issue TDS certificate to the deductee.
these deductors did not credit the TDS properly or upload the info to form 26AS as a result of which the IT dept did not give me crdit for the TDS claimed..what do we helpless people do if the deductor is casual(incl a bank).it is silly as we will have some sort of proof if TDS certificate is given.now we are at the mercy of the deductor and the IT dept!!
what is the time frame for the issuance of tds certificate. More over since the due date of payment of tds has been extended till the due date of filling the income tax return u/sec 139, please let me know, what is the due date of filling the tds return in for 26,24 & 27
the previous provison of issue of TDS certificate not mandotory was absurd. suppose a Bank deducts TDS on fixed deposits. should not the asessee know how much was deducted so that he can adjust his income tax to be paid. Otherwise I do not understand how can she know this information. Will not IT authorities ask for this certificate to allow the deduction as tax paid. The left hand of governemnt does not know the right hand. Beisde banks like State bank of India do not send the collected TDS in individual.s anme with PAN but a consolidated amount resuting cdsl as irrelevant.
I was thinking it was mandatory all these days. Educative update