Deduction of TDS, filing of TDS return and issue of TDS certificate to SAS Agents/ MPKBY Agents.

Deduction of TDS, filing of TDS return and issue of TDS certificate to SAS Agents/ MPKBY Agents.

Now one can find one more addition on the indiapost.gov.in web site.  During the course of a Workshop in Chandigarh there was a request to upload the SB Orders on the official web site of Department of Posts to ensure advance information and wider reach.  DDG Financial Services had agreed to the suggestion / request and now all SB Orders issued by the Department since 2007 onwards can be assessed at http://www.indiapost.gov.in/SB_Orders_01-01-2007.htm  This will go a long way to ascertain latest position with regard to SB orders.    

An analysis of all SB orders uploaded on the web site reveals that more than 40% of all SB orders have been issued just to fine tune the orders on TDS.  The latest order which supercedes  all previous orders on the subject is given below:  [  This SB Order is also available on http://www.indiapost.gov.in/SB_Orders_01-01-2007.htm ]

SB ORDER NO. 20/2010

No.107-02/2007-SB

Government of India

Ministry of Communications & IT

Department of Posts

Dak Bhawan, Sansad Marg,

New Delhi-110016.

Date: 21.09.2010

To All Heads of Circles/Regions Addl. Director General, APS, New Delhi.

Subject:-Deduction of TDS, filing of TDS return and issue of TDS certificate-regarding.

Sir / Madam,

The undersigned is directed to refer to this office SB Orders issued on the above subject from time to time. This order will supersede all the previous orders issued on TDS in small savings schemes.

2. There are two small savings schemes which are covered under the TDS regime. First is NSS-87 for which provisions of Section 194EE of the Income Tax Act are applicable. The second is SCSS-2004 for which provisions of Section 194A are applicable. Department is also liable to deduct TDS on the commission paid to agents appointed under SAS, MPKBY and PPF schemes for which provisions of Section 194H are applicable. Detailed provisions under above three categories are given below:-

(i) NSS-87 (Section 194EE)

As per Section 194EE, the person responsible for paying to any person any amount exceeding Rs.2500/- in a financial year has to deduct TDS @ 20%. No TDS is to be deducted if the payee gives declaration in Form 15-G that the tax on his estimated total income of the previous year in which such income is to be included in computing his total income will be NIL. In case of Sr. Citizens of the age of 65 years or above age, declaration should be in Form 15-H. These declarations can be given only if the total amount receivable does not exceed the maximum amount which is not chargeable to income Tax i.e Rs.1,60,000/- in case of individuals, Rs. 1,90,000/- in case of women and Rs.2,40,000/- in case of persons of 65 years or above age. No surcharge or education cess and Secondary education cess is to be charged. The tax is to be deducted at the time of payment either in cash or by cheque or by credit into savings account or by any other mode whichever is earlier.

(ii) Sr. Citizen Savings Scheme (Section 194A)

As per Section 194A, any person who is responsible for paying interest other than interest on Securities to a resident shall be required to deduct tax at source @ 10% if the amount of interest exceeds Rs.10,000/- in a financial year. No TDS is to be deducted if the payee up to the age of 65 years gives declaration in Form 15-G that the tax on his estimated total income of the previous year in which such income is to be included in computing his total income will be NIL. In case of Sr. Citizens of the age of 65 years or above age, declaration should be in Form 15-H. These declarations can be given only if the total amount of interest receivable does not exceed the maximum amount which is not chargeable to income Tax i.e Rs.1,60,000/- in case of individuals, Rs. 1,90,000/- in case of women and Rs.2,40,000/- in case of persons of 65 years or above age. No surcharge or education cess and Secondary education cess is to be charged. TDS is to be calculated o whole amount of interest paid if the same exceeds Rs.10,000/- in a financial year. The tax is to be deducted at the time of payment either in cash or by cheque or by credit into savings account or by any other mode whichever is earlier.

(iii) Agent Commission (Section 194H)

As per Section 194H, any person who is responsible for paying to a resident, by way of commission, shall at the time of payment either in cash or by cheque or by credit into savings account or by any other mode whichever is earlier, deduct income tax at the rate of 10% if the total amount of commission in a financial years exceeds Rs.5000/-.

(iv) Rate of TDS if certificate under Section 197 is produced.

If a certificate from Assessing Officer under Section 197 is produced, the payee shall deduct TDS @ mentioned in the certificate or shall not charge any TDS if the same is exempted in the certificate.

3.	Deposit of TDS, filing of TDS return and issue of TDS certificate.
(i)	Deposit of TDS

         

As per Notification No. 41/10 [ F.No.142/27/2009-SO(TL)] dated 31.5.2010, from 1^st April 2010, TDS deducted by Government Department has to be deposited by Book Entry Challan in the form of a statement in Form No.24G within ten days from the end of the month to the agency authorized by Director General of Income Tax (Systems) in respect of tax deducted by the deductors and reported to him for the month and intimate the number (Book Identification number) generated by the agency to each of the deductors in respect of whom the sum deducted has been credited.

(ii) Filing of TDS return

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

All tax deductors have to file Quarterly return. In case of TDS deducted from NSS/SCSS depositors and agent’s commission, return has to be filed in Form 26Q. The time schedule of filing return for the TDS

(iii) Filing of e-returns of Tax deducted on or after 1^st April 2010.

(a)      As per Notification No. 41/2010[F.No.142/27/2009-SO(TL)] dated 31.5.2010, in case TDS deductor is an office of Government, e filing of return is compulsory. The tax collector at the time of preparing statements of tax deducted shall:-

(i)       quote his tax deduction and collection account number (TAN) in the statement.

(ii)      quote Permanent Account Number (PAN) of all collectees.

(ii)      furnish particulars of the tax paid to the Central Government including Book Identification Number.

(b)      For preparation of e-TDS return, the return should be prepared in one of the authorized media i.e Floppy, CD-DOM or on-line transmission of electronic data to a server designated by e-filing Administrator. The file should be as per data structure given by the e-filing Administrator. Each computer media used for preparing the e-return should be labeled. The label should indicate Name, Permanent Account Number and address of deductor.

(c)      As per CBDT Press Release No. 402/92/2006-MC (27 of 2010), dated 2.6.2010, Government Authorities (Pay and Accounts Officer or Treasury Officer or Cheque Drawing and Disbursing Officer) responsible for crediting tax deducted at source to the credit of Central Government by book-entry are now required to electronically file monthly statement in a new form No.24G containing details of credit of TDS to the agency authorized by Director General of Income Tax (Systems).

(iv)     TDS Certificate  :  Form in which certificate of TDS deducted is required to be issued quarterly is Form 16A in case of NSS/SCSS and Commission paid to agents. The format of form 16A has been revised vide CBDT Notification No. 41/2010 [F.No. 142/27/2009-SO(TPL)] dated 31.5.2010. The certificate has to be prepared in two copies i.e original copy for payee and duplicate as office copy. Duplicate copy of TDS certificate can be issued with same details as in the original if original is lost on making application by the depositor/agent. On duplicate certificate, “DUPLICATE” should be clearly marked on top in bold letters. It has now become mandatory to specify the following information in the Form 16A:-

(a)	Valid TAN no. of the deductor
(b)	Book Identification Number.
(c)	Receipt number of the Form 24G
(g)	DDO Sequence number in the Book Adjustment Mini Statement.

TDS certificate has to be issued on quarterly basis from 1.4.2010 and due date for issue of TDS certificate is now within 15 days from the due date for furnishing the quarterly statement of TDS. This certificate should be prepared and handed over to the customer or agent within this specified period. If the customer/agent failed to receive the certificate personally, it should be sent to customer/agent by ordinary post at the last available address.

4. Penalties

Following are the provisions of penalties in various Sections of Income Tax Act:-

Sl.No.	Section	Contents	Penalty
1	271C	Non deduction of tax at source	Equal to the tax not deducted at source
2	272A(2)(f)	Form 15G/Form 15H not delivered to the Income Tax department	Rs.100/- per day but penalty not to exceed the amount of tax deductible.
3	272A(2)(g)	Failure to issue TDS Certificate	Rs.100/per day of default subject to  maximum of the tax deducted.

4	272A(2)(k)	Non submission of quarterly Statement	Rs.100/per day of default subject to maximum of tax payable.
5	272B(2)	Non-intimating PAN to tax deductor.	Rs. 10,000/-
6	272BB(1)	TAN not obtained	Rs.10,000/-
7	272BB(1A)	Quoting false TAN	Rs.10,000/-

5. Collection of PAN or deduction of higher rate of TDS.

As per CBDT Press Release No. 402/92/2006-MC(04 of 2010) dated 20.1.2010;

(i)            a new provision relating to tax deduction at source (TDS) under Income Tax Act 1961 will become applicable from 1^st April 2010 according to which Tax at the higher rate of the prescribed rate or 20% will be deducted on all transactions liable to TDS, where the Permanent Account Number(PAN) of the deductee is not available.

(ii)      all deductors are liable to deduct tax at the higher rate in all transactions not having PAN of the deductees on or after 1^st April 2010.All deductors are advised to intimate their deductees to obtain and furnish their PAN so as to avoid TDS at the higher rate.

1.                       Birds Eye view of TDS provisions.

Sl.No.	Section & payment	Deductor	Payee	Threshold Limit	Rate%
1	194A(SCSS)	Any person other than individual	Resident	Rs.10,000/-	10%
2	194EE(NSS-87)	Person responsible for paying amount	Any person	Rs.2500/- in a financial year.	20%
3	194H(commission to agents)	Any person	Any person	Rs.5000/- with effect from 1st July 2010 in a financial year.	10%
Note:- SCSS-2004 No TDS is to be deducted if the payee up to the age of 65 years gives declaration in Form 15-G that the tax on his estimated total income of the previous year in which such income is to be included in computing his total income will be NIL. In case of Sr. Citizens of the age of 65 years or above age, declaration should be in Form 15-H. NSS-87 No TDS is to be deducted if the payee gives declaration in Form 15-G that the tax on his estimated total income of the previous year in which such income is to be included in computing his total income will be NIL. In case of Sr. Citizens of the age of 65 years or above age, declaration should be in Form 15-H. Limit for submitting Declaration The above declarations can be given only if the total amount receivable does not exceed the maximum amount which is not chargeable to income Tax i.e Rs.1,60,000/- in case of individuals, Rs. 1,90,000/- in case of women and Rs.2,40,000/- in case of persons of 65 years or above age.

2.                  Points for immediate Action

Following actions are required to be taken immediately:-

(i)       A notice should be pasted on the notice board placed at public hall of each post office for intimation to the NSS/SCSS account holders and agents in the following language:-

(1)      All NSS/SCSS Account holders who have not given declaration either in Form 15G or 15H, are requested to provide their PAN number to the Postmaster immediately failing which TDS at higher rates or 20% shall be deducted at the time of withdrawal/closure of NSS-87 or payment of quarterly interest of SCSS accounts on 30.9.2010.

(2)      All SAS/MPKBY/PPF agents whose commission in financial year 2010-11 is likely to cross Rs.5000/- should intimate their PAN number to the postmaster by 30^th September 2010 failing which TDS @ 20% shall be deducted at the time of payment of next commission at source.

Note:- Higher rate will be higher of the following:-

(a)	at the rate specified in the relevant provision of this Income Tax Act
	1961;or
(b)	at the rate or rates in force; or
(c)	at the rate of twenty (20%) percent.

(ii)          PAN numbers of all above mentioned account holders and agents should be recorded and quoted at the time of preparation of monthly statement in Form 26Q.

(iii)     Obtain BIN (Book Identification number) from the agency authorized by DG of Income Tax (Systems) and mention the same in TDS certificate.

(iv)     Divisional/Regional/Circle offices should contact officers of Income Tax Department and understand the procedure for electronically filing of monthly statement in Form 24G, quarterly return in Form26Q, generation of DDO registration number, Book Identification Number and receipt number of monthly statement etc.

(v)      All SOs are to quote PAN number of each depositor or agent from whom TDS is deducted in the daily schedule to be sent to HPO.

(vi)     All SOs shall prepare schedule of TDS deducted on daily basis in the following format:-

Schedule of tax deducted on the interest paid in SCSS accounts or from NSS87 accounts on ……………..at…………HO/SO

Sl.No .	Name of deposit or	Account number	Amount of interest paid in SCSS/withdrawal from NSS87	Tax deducted Rs.	Permanent Account Number (PAN)	Remark s
1	2	3		4		5
Total

Date / Stamp Signature of SPM

a)       The schedule will be prepared in triplicate in sub offices and two copies will sent to HO alongwith forms 15 G and 15 H in support of amount charged in the daily account and SO account. The third copy of the schedule will be filed in a separate guard file to be opened for each financial year. In the Head Office the consolidated schedule will be prepared in triplicate incorporating the transactions of the HO and sub offices as a whole.

b)       The amount of tax deducted will be shown on the receipt side in all the account records under a separate head “Tax deducted on the interest paid in SCSS accounts/W/D from NSS-87.”

(vii)    Similar schedule is also required to be sent to HO by SOs in case of commission paid to agents in the following format:-

Schedule of commission paid and Tax deducted (TDS) from the agents on…………. ……………..at………… SO

Sl.No.	Name of agent	Permanent Account Number (PAN)	Account number/certificate Registration number	Amount invested	Amount of commission paid	Tax deducted Rs.	Remarks
1	2	3	4	5	6	7	8
Total

Date / Stamp Signature of SPM

(viii) HO shall prepare consolidated schedules including HO as well as SOs transactions of SCSS accounts/NSS-87 withdrawal/agent commission paid from which TDS was deducted separately and on the basis of this schedule file monthly/quarterly return of TDS deducted electronically.

(ix) TDS certificates in new Format of Form-16A will be prepared by each HO and forwarded to concerned SOs on quarterly basis.

This issues with the approval of DDG(FS). Yours faithfully,

(Kawal Jit Singh)

Assistant Director (SB)

Encl:- Format of 24G, 26Q and revised Form 16A