Clarification regarding discontinuance of Form No. 16B

1. Under the provisions of section 203 of the Income-tax Act, every person deducting tax in accordance with the provisions of sections 192 to 194, 194A, 194B, 194BB, 194C, 194D, 194E, 195 and 196A is required to furnish a certificate to the effect that tax has been deducted and to specify  therein, inter alia the amount deducted, and any other particulars that may be prescribed. The certificate has to be furnished within the period prescribed under rule 31 of the Income-tax Rules, 1962, to the person to whose account credit is given or to whom payment is made or the cheque or warrant is issued, as the case may be.

2. With a view to streamlining the work of issue of certificates for tax deducted at source, and avoiding the problems experienced in the use of the unified Form No. 16 [which was brought into force with effect from 1-4-1989 vide Notification No. SO 937(E), dated the 10th October, 1988 (Ref. Board’s Circular No. 529, dated 13-2-1989, the Central Government have now introduced a new scheme for the issue of these certificates. The main features of the scheme are as under :—

     (i)   Instead of the existing common Form No. 16 for various deductions, three different forms, viz , Form Nos. 16, 16A and 16B have been introduced by amending, inter alia, rule 31 of the Income-tax Rules through Notification No. SO 148(E), dated 28-2-1991.

   (ii)    The new Form No. 16 shall be used for issuing the certificates for tax deducted at source under section 192 relating to salaries.

  (iii)   Form No. 16A shall be used for issuing the certificates of tax deducted at source under section 193 relating to  interest on securities, section 194 relating to dividends and section 194D relating to insurance commission.

   (iv)   Form No. 16B shall be used for issuing the certificates of tax deducted at  source under section 194A relating to interest other than interest on securities, section 194B relating to winnings from lotteries or crossword puzzles, section 194BB relating to winnings from horse races, section 194C relating to payments to contractors or sub-contractors, section 194E relating to payments to non-resident sportsmen or sports associations, section 195 relating to other sums, and section 196A relating to income payable to unit-holders of Mutual Fund.

    (v)   Form Nos. 16 and 16A can be issued on private stationery of the tax deductor or the printed forms available in the market, without approaching the Income-tax Department. However, these forms must be in the prescribed proforma.

   (vi)   Form No. 16B shall be issued on a paper serially numbered and printed by the Central Government in book form  and supplied for a consideration to the person deducting tax at source on an application made by him in Form No. 17 to the Chief Commissioner or Commissioner of Income-tax having jurisdiction over him in this regard. However, in the case of companies which have adopted computerisation for furnishing such certificates, the Commissioner of Income-tax can waive the stipulation of the issue of certificates on forms printed by the Government. Such companies can issue the certificates through computers, but in the prescribed proforma.

  (vii)   The new forms are to be used by the tax deductors for  issuing any certificates for tax deducted at source after 28-2-1991.

3. It may be mentioned that as per sub-rule (3) of rule 31, the aforesaid TDS certificates are to be furnished to the payee within a period of one month from the date of credit or payment of the sum, or as the case may be, from the date of issue of a cheque or warrant for payment of any dividend to a shareholder, subject to the exceptions covered  by the provisos to sub-rule (3). For deductions under sections 192 and 194D, the certificates can be issued within one month from the close of the financial year in which the deductions were made. Non-furnishing of these certificates within the prescribed time invites penalty under section 272A of the Income-tax Act at the rate of a minimum of rupees one hundred and a maximum of rupees two hundred per day for the period of default.

4. According to rule 37 of the Income-tax Rules, a person responsible for deducting tax under any of the provisions of Chapter XVIIB of the Income-tax Act is required to file an annual return of tax deduction by the end of the specified month. The annual return for deduction from salaries (Form No. 24) was hitherto required to be filed by the 30th of April every year. This date has now been changed to 31st May by the aforesaid Notification of 28th February, 1991. Form No. 24 has also been modified vide Notification No. SO 220 (E), dated 26th March, 1991. The returns this year may be filed in the new form.

5. For ready reference, the Table below rule 37, which specifies the Form numbers and the months by the end of which the annual return of tax-deduction have to be filed, is reproduced below :

Sl. No.
Nature of returns
Form No.
Month
(1)
(2)
(3)
(4)
1.
Annual  return  of  deduction  of  tax under section 192 from ‘Salaries’
24
May
2.
Annual return  of deduction of tax under section 193 from ‘Interest on securities’
25
June
3.
Annual  return  of  deduction  of  tax under section 194 from ‘Dividends’
26
April
4.
Annual  return  of  deduction  of  tax under  section  194A  from  ‘Interest other than interest on securities’
26A
June
5.
Annual  return  of  deduction  of  tax under   section  194  from  ‘Winnings from lotteries or crossword puzzles’
26B
May
6.
Annual return of deduction of tax under section 194BB from ‘Winnings from horse races’
26BB
May
7.
Annual return of deduction of tax under  section  194C  from  ‘Payments to any contractor or sub-contractor’
26C
June
8.
Annual return of deduction of tax under section 194D from ‘Insurance commission’
26D
June
9.
Annual return of insurance commission  paid/credited  during  the  year without deduction of tax
26E
June

It may be mentioned that if a person fails to furnish in due time, any of the aforesaid annual returns he shall be liable to pay penalty under section 272A of the Income-tax Act, at the rate of a minimum of rupees one hundred and a maximum of rupees two  hundred per day for the period of default.

Circular : No. 597, dated 27-3-1991.

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