Deductors Must Comply with their Obligations to Ensure Correct Credit to Persons from Whose Income Tax is Deducted at Source


All deductors other than Government deductors must file their quarterly TDS statement for the quarter ending 30th June 2012, on or before 15th July 2012 and Government deductors must file their statement on or before 30th July 2012. While submitting their statements, the deductors have to choose correct and relevant form, quote correct PAN against all entries and ensure that correct CIN/BIN is quoted in the TDS statement. Non-quoting of PAN or TAN in TDS statements or delay in filing of TDS statements may lead to levy of penalty. 

Filing of TDS statement with correct PAN and CIN/BIN is important because under Rule 37BA of Income Tax Rules, 1962 credit for tax deducted at source is given to the deductees on the basis of TDS statement furnished to the Income-tax Department by the deductor. Filing of TDS statements with incorrect PAN or other details of the deductee would, therefore, cause inconvenience to the deductees (taxpayer).

In case the income on which tax has been deducted at source is assessable in the hands of a person other than the deductee, the deductee must file a declaration with the deductor that credit for the TDS shall be given to the other person and not to the deductee. The declaration filed by the deductee must contain the name, address, Permanent Account Number of the person to whom credit is to be given and reasons for giving credit to such person. The deductor must, in the TDS statement, report the tax deduction in the name of such other person and also issue the TDS certificate in the name of the person in whose name credit is shown in the TDS statement.

TDS certificates for deductions on income other than salary income (Form 16A) for the quarter ending 30th June 2012 should be issued on or before 30th July 2012. 

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  1. H J OZA says:

    Central Govt. should introduce TDS Challan-cumForm No 16A for 194A etc.,as per proposed Sec.194LAA, to avoid many problem.No down loading of Form No16A,filling of Form No 26Q,27A.That NSDL,Bank etc. gent charges from Govt. etc. but TDS deductor is UNPAID SERVANT OF GOVT.. I have send my proposal in details to Cental Govt.

  2. vswami says:

    The deductor in discharging his function by way of meeting the requirement of the law, is, in essence, acting as the ‘agent’ of the UOI . Though, as said, the deductor has the responsibility to ensure ‘correct credit’, it is the UOI as the ‘principal’ of the deductor has the primary and ultimate responsibility , to ensure ‘correct credit’. In other words, for any failure (including any defect or deficiency) in doing so, it is both the UOI and the deductor who are jointly and severally responsible / accountable in law, to taxpayer for such failure.
    It needs no specific mention that, such accountability or answerability, in the nature of things, are not merely restricted to ensuring ‘correct credit’; but essentially extend to the responsibility to deduct just exactly the appropriate and correct amount, nothing more nothing less. Should keep in focus for the purpose that, as per the scheme of the Act, TDS is a collection in advance of the tax due on any ‘income’ , and only of an amount, and as due on the facts in a given case.
    To illustrate, here is a typical case: Say, Bank FD is opened for a 3 year period; but prematurely closed at the end of second year. Should the Bank rule in force as on the date of opening so provide, it may recalculate and withdraw excess interest, at the time of closing the FD in the second year. In that event, in the second year, for reckoning the TDS, it is only the interest actually payable, and paid, that is as reduced /netted out by the amount of excess withdrawn in that year, that should rightly be taken as the basis. As, otherwise, the payee of interest would be faced with the hassle of claiming credit for the excess TDS in his tax return.

    Anyone having an experience is invited to share!

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October 2020