TDS ceritificates

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bhushan gupta

bhushan gupta (Querist)
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15 July 2010 As per new rules of TDS whether it is mandatory to issue TDS certificates quarterly ?

CA Ravi Sisodia

CA Ravi Sisodia (Expert)
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15 July 2010 The Central Board of Direct Taxes (CBDT) has recently amended vide Notification No. 41/2010 Dated 31/05/2010 the Income Tax Rules, 1962 (the Rules) in respect of the provisions relating to Tax Deduction at Source (TDS). The new Rules shall apply in respect of TDS on or after 1 April 2010.

The Central Board of Direct Taxes (CBDT) has recently amended vide Notification No. 41/2010 Dated 31/05/2010 the Income Tax Rules, 1962 (the Rules) in respect of the provisions relating to Tax Deduction at Source (TDS). The new Rules shall apply in respect of TDS on or after 1 April 2010.

Deposits of TDS :-In case of salaries and other payments, the tax deducted by the employer/deductor is required to be deposited with the tax authorities on or before seven days from the end of the month in which the tax has been deducted. A relaxation has been provided for the tax deducted at the end of the financial year ie, in the month of March wherein tax could be deposited on or before 30th April.

Annual TDS certificate :-In case of salary payments, an annual TDS certificate in Form 16 is to be issued by the employer to the employee by May 31 following the end of relevant financial year. Further, the Form 16 should contain particulars as to the PAN of the employee, the TAN of the employer, challan identification numbers and receipt numbers of all the quarterly statements (Form 24Q) filed by the employer.

It is important to note that with the change in the due dates of filing of the quarterly returns, the information in respect all the four quarters would have to be filled in by the employer at the time of issuing the Form 16. The employer, as an option, may use digital signatures to authenticate the Form 16 subject to specified conditions.

Quarterly TDS certificate :-In case of payments other than salary, the deductor is required to issue to the deductee, Form 16A on a quarterly basis within 15 days from the due date of furnishing the quarterly TDS statement (Form 26Q/27Q).

It is important to note that earlier, an option was available to the deductor to issue monthly or annual certificates subject to the prescribed conditions. However, now quarterly TDS certificates would have to be issued as per the new rules.

Due date for furnishing TDS certificate to the employee or deductee or payee is revised as under:

Sl. No. Category Periodicity of furnishing TDScertificate Due date
1. Salary (Form No.16) Annual By 31st day of May of the financial yearimmediately following the financial yearin which the income was paid and tax deducted
2. Non-Salary

(Form No.16A)
Quarterly Within fifteen days from the due date for furnishing the ‘statement of TDS’

Quarterly statements

Quarterly statements are to be filed for TDS on salary by employer in Form 24Q and on other payments by the deductor in Form 26Q/27Q as prescribed. These quarterly statements are to be filed within 15 days of the end of the each quarter. Due date

for furnishing TDS return for the last quarter of the financial year has been modified to 15th May w.e.f 01.04.2010 (from earlier 15th June). The revised due dates for furnishing TDS return are:-

Sl. No. Date of ending of the quarter of the financial year Due date
1. 30th June 15th July of the financial year
2. 30th September 15th October of the financial year
3. 31st December 15th January of the financial year
4. 31st March 15th May of the financial year immediately following the financial year in which deduction is made

Employed with more than one employer during the year

A new Form 16 has been prescribed which contains two sections, Part ‘A’ and Part ‘B’. If an employee is employed by more than one employer during the financial year, each of the employer is required to issue Part ‘A’ of the certificate in Form 16 pertaining to the respective period for which such employee was employed with the respective employer. Further, Part ‘B’ of Form 16 may be issued by each of the employer or by the last employer only as per the option of the employee.

The new rules have amended the due date for issuing the TDS certificate to the employees in Form 16 from April 30 to May 31 following the end of the financial year.

In case of payments other than salary, Form 16A would now have to be issued on quarterly basis vis-à-vis the earlier option of issuing it on a monthly / annual basis.

Even though the Form 16/16 A is not required to be filed with the tax return, still the employee/deductee should ensure that all the necessary particulars in respect of the TDS on salary/other payments are correctly recorded in these forms, to ensure that there are no issues at a later date while claiming credit for the TDS in personal/other tax return.