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Saturday, February 28, 2015

Income tax rates for FY 2015-16 changes on 28 February budget day

Finance Minister Mr. Arun Jaitley presented the Annual Budget in Lok Sabha on 28 February 2015. He proposed some changes in income tax rates for financial year 2015-16 analysis year 2016-17. However there is no change in basic exemption rate for individual as well as for companies.

However there are some changes too. A surcharge of 12% is levied on income exceeding Rs. 1 crore. For companies, surcharge of 7% will be charged on income above Rs. 1 crore and 12% surcharge on income above Rs. 10 crores.

For Foreign companies 2% surcharge on income above Rs. 1 crore and 5% surcharge on income above 10 crores.

 Other benefits to tax payers are as follows.
1- Limit of deduction of health insurance premium increased from `15000 to ` 25000, for senior citizens limit increased from `20000 to `30000.

2- Senior citizens above the age of 80 years, who are not covered by health insurance, to be allowed deduction of ` 30000 towards medical expenditures.

3- Deduction limit of ` 60000 with respect to specified decease of serious nature enhanced to ` 80000 in case of senior citizen.

4- Additional deduction of `25000 allowed for differently abled persons. ¾ Limit on deduction on account of contribution to a pension fund and the new pension scheme increased from ` 1 lakh to `1.5 lakh. 

5- Additional deduction of ` 50000 for contribution to the new pension scheme u/s 80CCD. 

6- Payments to the beneficiaries including interest payment on deposit in Sukanya Samriddhi scheme to be fully exempt. 

7- Service-tax exemption on Varishtha Bima Yojana.

8- Concession to individual tax-payers despite inadequate fiscal space. ¾ Lot to look forward to as fiscal capacity improves. 

9- Conversion of existing excise duty on petrol and diesel to the extent of ` 4 per litre into Road Cess to fund investment.

10- Service Tax exemption extended to certain pre cold storage services in relation to fruits and vegetables so as to incentivise value addition in crucial sector. 

11- Negative List under service-tax is being slightly pruned to widen the tax base.

12- Yoga to be included within the ambit of charitable purpose under Section 2(15) of the Income-tax Act. 

13- To mitigate the problem being faced by many genuine charitable institutions, it is proposed to modify the ceiling on receipts from activities in the nature of trade, commerce or business to 20% of the total receipts from the existing ceiling of ` 25 lakh.13 

14- Most provisions of Direct Taxes Code have already been included in the Income-tax Act, therefore, no great merit in going ahead with the Direct Taxes Code as it exists today.

15- Direct tax proposals to result in revenue loss of ` 8315 crore, whereas the proposals in indirect taxes are expected to yield ` 23383 crore. Thus, the net impact of all tax proposals would be revenue gain of `15068 crore.

Income tax slabs for FY 2015-16 relevant to analysis year 2016-17 are as follows.

For Individual (Male or Female) and H.U.F.
Slabs
Income tax rates
Income upto Rs. 250000
Nil
Income Above250000 to 500000
10%
Income Above 500000 to 1000000
20%
Income more than 1000000
30%
- There is an additional exemption under section 87A to the assessee whose income comes in 250001 to 500000, the exemption is on tax amount maximum of 2000 Rupees.
- Surcharge of 12% is applicable on income abvove Rs. 1 crore.
 - Education cess @3% will be charged on tax amount.

For Senior sitizen above 60 years but less than 80 years 
Slabs
Income tax rates
Income upto 300000
NIL
Income Above300000 to 500000
10%
Income Above 500000 to 1000000
20%
Income more than 1000000
30%
- There is an additional exemption under section 87A to the assessee whose income comes in 250001 to 500000, the exemption is on tax amount maximum of 2000 Rupees.
- Surcharge of 12% is applicable on income abvove Rs. 1 crore.
 - Education cess @3% will be charged on tax amount.

 For Senior citizen above 80 years 

Slabs
Income tax rates
Income upto 500000
NIL
Income Above 500000 to 1000000
20%
Income more than 1000000
30%

- Surcharge of 12% is applicable on income abvove Rs. 1 crore.
 - Education cess @3% will be charged on tax amount.

Custom notification after budget 28 February 2015

Government release custom notifications after budget presented by Finance Minister Mr. Arun Jaitley. The notification no. 6/2015, 7/2015, 8/2015, 9/2015, 10/2015, 11/2015 and 27/2015 issued after budget by department of revenue, Government of India.  The notification details are as follows.

G.S.R. (E).- In exercise of the powers conferred by section 103 of the Finance (No.2) Act, 1998 (21 of 1998), read with sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts motor spirit commonly known as petrol, falling under heading 2710 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India, from so much of the additional duty of 
customs leviable thereon under section 103 read with the Second Schedule to the said Finance (No.2)Act, 1998, as is in excess of the amount calculated at the rate of rupees six per litre. 

Download all notification of custom after budget 


Friday, February 27, 2015

Service tax and central excise audit norms

Central excise department issued a circular no. 995/2015 dated 27 February 2015 regarding audit norms must follow by audit commissioner for central excise and service tax. Full circular is as under.

Central Excise and Service Tax Audit norms to be followed by the Audit Commissionerates–reg

1.   Audit Commissionerates have been created with an objective to improve the functional efficiency of audit in the field formations.  An effective taxpayer audit plays a key role in improving compliance and augmenting tax revenues.  It is one of the important compliance verification tools available to the tax administration to verify the correctness of the taxes self-assessed and reported in the tax returns besides complying with other legal obligations.

2. In the past, norms / guidelines were issued by the Board for conduct of audit by the Commissionerates. The existing norms / guidelines for selection of units for audit are based on a single criterion, namely, the threshold limit of taxes paid in the previous Financial Year.  Taxpayers are categorizedinto mandatory and non-mandatory units based on taxes paid and the units are required to be audited as per the frequency norms stipulated for each category.    The criteria adopted do not take into account the risk factors and the resources available for undertaking audit.  The uniform norms and frequency prescribed for conducting audits across the Commissionerates also do not factor in crucial inputs such as the assessee base, availabilityof manpower and the risk indicators for selection of units for conducting audit.  The audit coverage in Service Tax has been below the satisfactory levels on account of huge taxpayer base and limited availability of manpower in major cities such as Mumbai, Delhi, Bengaluru, etc. 

3.  In the background of creation of exclusive Commissionerates to deal with audit and having regard to the difficulties faced, and also the experience gained with regard to audit coverage in the past, it has been decided to revise the existing norms for conduct of audit and issue fresh norms / guidelines taking into account the availability of manpower in the Audit Commissionerate. The new norms move away from the concept of mandatory and non-mandatory audits and do not prescribe any frequency for conducting audits. The new norms introduce risk based selection of assessees for audit based on identified/quantified risk parameters and also introduce jurisdictional specific criteria (as opposed to uniform norm across the country) for segmenting the taxpayer into large, medium & small categories.

4. In this regard, the following guidelines are issued in supersession of the earlier guidelines:

Annual plan for Audit Coverage:

5.0  The Audit Commissionerate would release an Annual plan by 31stMay, indicating the names of Assessees that are proposed to be audited during the course of the year (period between 1st July to 30th June of the next year) and the month in which the Audit officers would visit the units for verification of records. The Audit coverage (i.e. numbers of units selected for Audit in a year) may be calibrated with the manpower availability in a Commissionerate. The working strength of officers in Audit Commissionerate would be taken as the basis for calibration.

5.1  In order to ensure adequate coverage, the Assessees/Taxpayersshall be grouped in three categories namely Large, Medium and Small units.Given the past experience in detection of non-compliance and recovery of duty through Audits, it is suggested that Auditgroups may be deployed to coverLarge, Medium and Small units as follows:
a)             40 % of manpower to Large units
b)            25 % of manpower to Medium units
c)             15 % of manpower to  Small units
d)            20 % of manpower for planning, coordination and follow up.

5.2   The composition of AuditGroupsto cover Large, Medium and Small units may be done as follows:
a)    2 – 3 Superintendents and 3 – 5 Inspectors for the conduct of audit of Large assessees / taxpayers.

b)   1 – 2 Superintendent and 2 – 3 Inspectors for conduct of audit of Medium assessees / taxpayers.

c)    1 Superintendent and 1 - 2 Inspectors for Small assessees / taxpayers.
Assistant / Deputy Commissioners may lead the Audit Groups in select cases.
5.3          The indicative duration for conduct of audit that is inclusive of desk review, preparation and approval of Audit plan, actual Audit and preparation of Audit report wherever necessary, for each category would be as under:

a)    Large assessees / taxpayers – 6 to 8 working days
b)   Medium assessees / taxpayers – 4 to 6 working days.
c)    Small assessees / taxpayers – 2 to 4 working days

5.4  Given that there are around 249 working days in a year, the number of Audits that can be approximately conducted in a year are as follows:

a)   31 Large units (calculated at 8 days per unit) by one Audit party
b)   42 Medium units (calculated at 6 days per unit) by one Audit party and
c)    62 Small units (calculated at 4 days per Audit) by one Audit party

5.5  The aforementioned number of Audits could be then multiplied by the number of Audit teams prepared for each category to arrive at the total number of Audits that can be conducted by each Commissionerate during the year.

5.6  The manner of deployment of officers as mentioned above and calculation of number of units that can be audited during the year are illustrated below:

 i.   Suppose the working strength of an Audit Commissionerate is 60 Superintendents and 80 Inspectors.The deployment of officers would be: 24 Superintendents and 32 Inspectors for large units, 15 Superintendents and 20 Inspectors for medium units and 9 Superintendents and 12 Inspectors for small units and 12 Superintendents and 16 Inspectors in Headquarters.  To the extent possible, the manpower distribution amongst the Circles within an Audit Commisssionerate should be proportional to the large, medium and small Assessee base in the Circle. In other words, the 24 Superintendents and 32 Inspectors designated for large Assessees would be divided amongst the Circles proportional to the number of large Assessees under each Circle.The deployment has to be done in similar manner for medium and small units.

   ii.   Using the manpower as above, there would be around 10teams for large units, 12 teams for Medium units and 6 teams for Small units in the Commissionerate. The total number of units that could be audited in a year thus works out to around 310 large units, 504 medium units and 372 small units i.e. 1186 units in all.  The Commissioners could exercise necessary reallocation of officers to Medium units, if the audit of Large units is completed. Thus, each Commissionerate can carry out the calculations based on the working strength.

5.7  The criteria for categorizing an assessee / taxpayer as large, medium or small would be(a) annual value of clearances and total duty paid in case of Central Excise and/or(b) value of services rendered and services received (which are dutiable on reverse charge basis)and total duty paid in the case of Servce Tax. The threshold limits of value of clearances / value of services for categorizing the units into large, medium and small would be dependent upon (i) the available manpower in the Audit Commissionerate and (ii) the Assessee base, turnover and duty paid by each Assessee in the jurisdiction of the Audit Commissionerate. It may be noted that threshold limits may vary from one Audit Commissionerate to another Audit Commissionerate in view of varying number of Assessees and quantum of value of clearances / services and duty paid in case of each Assessee. The Audit Commissionerateswould obtainthe requisite data from EDW / ACES / EASIEST for categorization of Assessees into large / medium / small within their Commissionerate. The categorization would be done based on the methodology prescribed by the Directorate General of Audit.The methodology for categorization would be communicated to the Audit Commissionerates by Directorate General of Audit during the month of March / Aprilevery year.

5.8  The Audit Commissionerates shall consult zonal units of Directorate General of Audit while finalizing the Annual plan ofAudit coverage with the available manpower at the beginning of the financial year. The scheduling can be reviewed half yearly for necessary adjustments, if any.The Directorate General of Audit will also periodically review and revise, wherever necessary, the criteria for categorizing the units into large, medium and small within each Zone / Commisionerate, manpower deployment in each category, composition of audit team and number of days required for audit in each category. The review / revision would be done in consultation with the Audit Commissionerates so as to ensure that Audit coverage by officers is made optimal.

5.9   The Chief Commissioner may allow temporary reallocation / diversion of officers amongst the Audit Commissionerates to ensure adequate Audit coverage of all categories of Assessees / Taxpayers falling under the jurisdiction of the zone.

Selection methodology:

6.0  The selection of Assessees would be done based on the risk evaluation method prescribed by the Directorate General of Audit. The risk evaluation method would be separately communicated to the Audit Comissionerates during the month of March / April every year. The risk assessment function will be jointly handled by National Risk Managers (NRM) situated in the Directorate General of Audit and Local Risk Managers (LRM) heading the Risk Management section of Audit Commissionerates.The Risk Management section of Audit Commissionerate would ensure availability of Assessee / Taxpayer wise data for a period of last three years,which would facilitate risk assessment and preparation of the list of assessees that would be audited in the current year.

6.1  The Audit Commissionerates could also select few units at random or based on local risk perception in each category of large, medium and small tax payers. The results of Audit and the feedback from random selection would help in evaluating parameters used for selection process.

6.2  The Audit Commissionerates after preparing the annual plan ofAudit coverage as indicated above, would also prepare a list of units where risk can be mitigated through detailed scrutiny of returns and convey the details to the Executive Commissioners for taking necessary action. The selection of such units can be carried out at zonal level so that the Audit and detailed scrutiny complement each other. The list of such units and reason for selection should be shared with the Directorate General of Audit.

6.3  The above norms would become operative from 1st July 2015. Directorate General of Audit will review the efficacy of the above parameters as well as frequency of audits in consultation with Audit Commissionerates.

Theme based coordinated Audits

7.0   Theme based coordinated Audits at all India level would be conducted by concerned Audit Commissionerates in a synchronized manner. The theme would be selected by the Directorate General of Audit based on systematic and methodical risk analysis of internal taxpayer data (from ACES and EDW), economic indicators, third party information from tax and other regulatory authorities and other relevant sources of data. Directorate General of Audit would also consult trade, industry and service providers from time to time, wherever necessary. The theme would be intimated well in advance, say four to six months, to the field formations. Detailed questionnaires would be prepared as guidance to the Audit parties. The dates for such Audits would be fixed in advance, say sometime in December every year, so that they can be blocked by the Commissionerates. The number of such Audits will be one or at best two in a year. The selection of theme / issue, coordination and dissemination would be done by DG(Audit) in consultation with the field formations.

7.1   The theme based coordinated Auditswould also be carried out at the Zonal level. The theme for the Audit, which could be a sensitive commodity or a service, would be selected at the zonal level and simultaneous and coordinated Audit would be carried out within the zone. The number of such Audits will again be one or two in a year. The theme for the Audit would be selected based on analysis of data provided by ACES, EDW and relevant third party information identified from time to time. The Chief Commissioner may involve the zonal units of Directorate General of Audit in selection of theme, planning and execution of theme based Audit.

Audit of Multi Locational Units

8. In case of multi-locational units and multi-locational Service Providers, as prescribed in the Central Excise Audit Manual and Service Tax Audit Manual respectively, the zonal units of the Directorate General of Audit will continue to coordinate the audit of multi-locational manufacturing units and multi-locational service providers.  In case of mulit-locational units located with one zone under different Audit Commissionerates, the coordination will be carried out at the zonal level by one of the Audit Commissionerates.  For this purpose, wherever there are more than one Audit Commissionerate in a zone, the Principal Chief Commissioner / Chief Commissioner may designate one of the Audit Commissionerate for undertaking such coordination and for identifying units based on common PAN for the purposes of integrated Audit.

Accredited status for deferring frequency of Audit

9.There can be a segment of Assessees, who could be given “accredited” status, similar to the one given in Customs, based on their proven track record of compliance with tax laws and procedures. Such identified assessees need not be subjected to Audit in every cycle. It has been decided that the frequency or periodicity of audit in their case would not be less than 3 years.  The procedure and criteria for accreditation are under examination and would be communicated separately.

Audit of LTUs

10.  In case of LTUs, 80% of the manpower may be used forconducting audits and 20% of the manpower may be used for headquarters functions. The Audit Group would comprise 2-4 Superintendents and 3-6 Inspectors. The indicative duration for conduct of audit that is inclusive of desk review, preparation and approval of Audit plan, actual audit and preparation of Audit report is 8 to 10 working days. Based on the recommended duration, the number of units that could be audited in a year would be 25 LTUs (calculated at 10 days per Audit) by one Audit group. The Audit groups from LTU Audit Commissionerate’s Circles would conduct the audit of LTUs and wherever additional manpower assistance is required the same can be sought from other LTUs or the jurisdictional Central Excise/Service Tax Audit Commissionerate. Further, audit of the LTU should be conducted in a coordinated manner i.e., the audit of Head Office and group units should be conducted simultaneously. For this purpose, the audit dates should be decided in consultation with the LTU. The total number and selection of individual assessees for audit would be done as per the risk evaluation method recommended by the Directorate General of Audit.

Removal of difficulty

11. Past guidelines and instructions on the subject stand modified to the extent they are in conflict with these guidelines. Difficulties faced, if any in the implementation of above instructions may be brought to the notice of the Board and Directorate General of Audit at an early date. The Principal Chief Commissioners and Chief Commissioners are authorized to issue appropriate instructions, to be valid for temporary periods, to remove any difficulty in conduct of audits which are important from the perspective of augmentation of revenue.

Thursday, February 26, 2015

Overdraft facility in PMJDY accounts

Reserve Bank of India issued a note allowing overdraft facility in Pradan Mantri Jan Dhan Yojna accounts. PMJDY account is the new beginning in banking sector in which you can open an account with bank having zero balance. Full note is as under.

Priority Sector Lending- Targets and Classification –Overdraft in PMJDY accounts

Please refer to our Master Circular RPCD.CO.Plan.BC 10/04.09.01/2014-15 dated July 01, 2014 on Priority Sector Lending- Targets and Classification.

2. It has been decided that overdrafts extended by banks upto ` 5,000/- in Pradhan Mantri Jan-Dhan Yojana (PMJDY) accounts will be eligible for classification under priority sector advances (‘others’ category) as also weaker sections, provided the borrowers household annual income does not exceed ` 60,000/- for rural areas and ` 1,20,000/- for non-rural areas.

3. The above instructions come into effect from the date of this circular. 

Monday, February 23, 2015

Judicial interpretation on late fees on TDS statement filing u/s 234E

Section 234E of the Income-tax Act, 1961 inserted by the Finance Act, 2012 provides for levy of a fee of Rs. 200/- for each day's delay in filing the statement of Tax Deducted at Source (TDS) or Tax Collected at Source (TCS). The provision for Levy of Late filing fee was introduced to improve Filing Compliance and to avoid subsequent inconvenience to the taxpayers due to inordinate delays in availability of tax credits in their 26AS Statements. 

This assumes further significance in view of the decision of the Hon'ble High Court of Bombay, dated February 6 2015, upholding the validity of the Levy for Late Filing u/s 234E. The court has observed the following in its decision in the case of Rashmikant Kundalia vs. UOI: 

Immediate Attention:
The late filing of TDS returns by the deductor causes inconvenience to everyone and s. 234E levies a fee to regularize the said late filing.
The fee is not in the guise of a tax nor is it onerous.
The levy is constitutionally valid.


CPC (TDS), in its endeavor to strengthen TDS Compliance, is reaching out to you to reiterate the essence of timely filing of Quarterly TDS Statements. Section 200(3) of the Income Tax Act, 1961 read with Rule 31A of the Income Tax Rules, 1962, prescribes the following due dates for filing of TDS Statements:


Where the TDS Statements are not filed within the due date, CPC (TDS) sends Intimations u/s 200A of the Act that includes Levy under section 234E. Your attention is hereby drawn towards the provisions of section 234E of the Act (Levy for Late filing of TDS Statement), which reads as follows:

Without prejudice to the provisions of the Act, where a person fails to deliver or cause to be delivered a statement within the time prescribed in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C, he shall be liable to pay, by way of fee, a sum of two hundred rupees for every day during which the failure continues.

The amount of fee referred to in sub-section (1) shall not exceed the amount of tax deductible or collectible, as the case may be.

The amount of fee referred to in sub-section (1) shall be paid before delivering or causing to be delivered a statement in accordance with sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C.

The provisions of this section shall apply to a statement referred to in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C which is to be delivered or caused to be delivered for tax deducted at source or tax collected at source, as the case may be, on or after the 1st day of July, 2012.

Action to be taken in case of Levy intimated u/s 234E:
Please download the Justification Report from our portal TRACES to view your latest outstanding demand. Please click here for assistance on downloading the Justification Report.
Use Challan ITNS 281 to pay the Levy with your relevant Banker, if there are no challans available for consumption.

Please use the Online Corrections facility on TRACES to submit corrections, to payoff the demand. To avail the facility, please Login to TRACES and navigate to Defaults tab to locate Request for Correction from the drop-down list. You can refer to our e-tutorials for necessary help.
Alternatively, you may also download the Conso File from our portal provided there are no Short Payment Defaults.

Prepare a Correction Statement using the latest Return Preparation Utility (RPU) and File Validation Utility (FVU).

Submit the Correction Statement at TIN Facilitation Centre.
For any assistance, you can write to ContactUs@tdscpc.gov.in or call our toll-free number 1800 103 0344.

CPC (TDS) is committed to provide best possible services to you.

Saturday, February 21, 2015

TRACES follow up for payment of outstanding Late Filing Fee u/s 234E

As per the records of CPC (TDS), there is an outstanding default of Rs. 0.00 on account of Late filing fee Levy u/s 234E, for the TANs associated with your PAN. The TAN-wise summary of the default is attached for your reference.

Section 234E of the Income-tax Act, 1961 inserted by the Finance Act, 2012 provides for levy of a fee of Rs. 200/- for each day's delay in filing the statement of Tax Deducted at Source (TDS) or Tax Collected at Source (TCS). The provision for Levy of Late filing fee was introduced to improve Filing Compliance and to avoid subsequent inconvenience to the taxpayers due to inordinate delays in availability of tax credits in their 26AS Statements. 

This assumes further significance in view of the decision of the Hon'ble High Court of Bombay, dated February 6 2015, upholding the validity of the Levy for Late Filing u/s 234E. The court has observed the following in its decision in the case of Rashmikant Kundalia vs. UOI:

Immediate Attention:
The late filing of TDS returns by the deductor causes inconvenience to everyone and s. 234E levies a fee to regularize the said late filing.
The fee is not in the guise of a tax nor is it onerous.
The levy is constitutionally valid.


CPC (TDS), in its endeavor to strengthen TDS Compliance, is reaching out to you to reiterate the essence of timely filing of Quarterly TDS Statements. Section 200(3) of the Income Tax Act, 1961 read with Rule 31A of the Income Tax Rules, 1962, prescribes the following due dates for filing of TDS Statements:

Where the TDS Statements are not filed within the due date, CPC (TDS) sends Intimations u/s 200A of the Act that includes Levy under section 234E. Your attention is hereby drawn towards the provisions of section 234E of the Act (Levy for Late filing of TDS Statement), which reads as follows:

Without prejudice to the provisions of the Act, where a person fails to deliver or cause to be delivered a statement within the time prescribed in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C, he shall be liable to pay, by way of fee, a sum of two hundred rupees for every day during which the failure continues.

The amount of fee referred to in sub-section (1) shall not exceed the amount of tax deductible or collectible, as the case may be.

The amount of fee referred to in sub-section (1) shall be paid before delivering or causing to be delivered a statement in accordance with sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C.

The provisions of this section shall apply to a statement referred to in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C which is to be delivered or caused to be delivered for tax deducted at source or tax collected at source, as the case may be, on or after the 1st day of July, 2012.

Action to be taken by the TANs associated with your PAN, in case of levy intimated u/s 234E :
Please download the Justification Report from our portal TRACES to view your latest outstanding demand. Please click here for assistance on downloading the Justification Report.
Use Challan ITNS 281 to pay the Levy with your relevant Banker, if there are no challans available for consumption.

Please use the Online Corrections facility on TRACES to submit corrections, to payoff the demand. To avail the facility, please Login to TRACES and navigate to Defaults tab to locate Request for Correction from the drop-down list. You can refer to our e-tutorials for necessary help.

Alternatively, you may also download the Conso File from our portal provided there are no Short Payment Defaults.

Prepare a Correction Statement using the latest Return Preparation Utility (RPU) and File Validation Utility (FVU).

Submit the Correction Statement at TIN Facilitation Centre

Friday, February 20, 2015

TRACES advice on TDS defaults and no statement filed as yet

As per the records of the Centralized Processing Cell (TDS), there exist outstanding Defaults in "all six preceding Quarters" with respect to the TDS Statements filed by you, relevant to the Financial Years 2013-14 and 2014-15. 

Please note that you have "not filed" any Correction Statements as of December 31, 2014 for closure of the TDS Defaults. 

Immediate Attention:
CPC(TDS) facilitates downloading of TDS Certificates (Forms 16/16A) in accordance with section 203 of the Income Tax Act, 1961 read with Rule 31(1) of the Income Tax Rules, 1962 for issuance of the same to the deductees. The deductor duly verifies to the effect that the amount due has been deducted and deposited to the credit of the Government and the information provided in the said certificate is true, correct and complete.

However, as per the records of CPC(TDS), it is observed that the amount of tax deposited / remitted mentioned by you in the TDS Statements is not correct due to insufficient or unmatched challans (owing to possible data entry errors).

To take care of the above and to facilitate non-intrusive TDS Compliance, Online Correction facility has been made available at TRACES for closure of Short Payment defaults due to challan errors. CPC (TDS) processes such statements within 24 hours of submission of such corrections.
In view of the above, Short Payment Defaults ought to be closed at the earliest , failing which you may not be able to submit requests to download TDS Certificates from the web portal TRACES


Consequences of failure to pay the demand:
As per the provisions of section 220 of the Act, Any amount, specified as payable in a notice of demand shall be paid within thirty days of the service of the notice.

If the amount specified in any notice of demand is not paid within the period limited under sub-section (1), the assessee shall be liable to pay simple interest at one per cent for every month or part of a month comprised in the period commencing from the day immediately following the end of the period mentioned in sub-section (1) and ending with the day on which the amount is paid.

If any person fails to deduct or pay the whole or any part of the tax, then, such person shall be liable to pay, by way of penalty, a sum equal to the amount of tax which such person failed to deduct or pay under Section 271C of the Act.

Failure to pay tax to the credit of Central Government is punishable with fine as per the provisions of section 276B/ 276BB.

Section 278A of the Act prescribes for punishment for second and subsequent offences, if any person has been convicted of an offence under section 276B.

Actions to be taken:
Use Challan ITNS 281 to pay the above demand with your relevant Banker, if there are no challans available for consumption

Please download the Justification Report from our portal TRACES to view your latest outstanding demand. Please click here for assistance on downloading the Justification Report.

Please use the Online Corrections facility on TRACES to submit corrections, to payoff/ close the demand.

To avail the facility, please Login to TRACES and navigate to Defaults tab to locate Request for Correction from the drop-down list. You can refer to our e-tutorials for necessary help.

In case of Short Payment Defaults due to Unmatched Challans, please use Tag Unmatched Challan facility using Online Corrections.

In case of Short Payment Defaults due to Insufficient Challans, please use Move Deductee facility using Online Corrections.

Alternatively, you may also download the Conso File from our portal provided there are no Short Payment Defaults.

Prepare a Correction Statement using the latest Return Preparation Utility (RPU) and File Validation Utility (FVU).

Submit the Correction Statement at TIN Facilitation Centre.
For any assistance, you can write to ContactUs@tdscpc.gov.in or call our toll-free number 1800 103 0344.

CPC (TDS) is committed to provide best possible services to you.