TAX DEDUCTED AT SOURCE - LATEST AMENDMENTS IN INCOME TAX RULES, 1962

[Mr. M. GOVINDARAJAN]

Rule 30 of the Income Tax Rules, 1962 ('Rules' for short) deals provides for the time and mode of payment to Government account of tax deducted at source or tax paid under section 192 (1A) of Income Tax Act, 1961 ('Act' for short). Rule 31 provides for the certificate of tax deducted at source or tax paid under section 192 (1A). The Central Board of Direct Taxes in exercise of powers conferred by section 295 of the Act made the Income Tax (First Amendment) Rules, 2010 which shall come into from 01.04.2010. Rule 2A of amendment Rules substituted the existing Rule 30 and Rule 31.

The substituted Rule 30 provides that all sums deducted in accordance with the provisions of -

Sec.192 - Salary;

Sec.193 - Interest on securities;

Sec.194 - Dividends;

Sec.194A - Interest other than 'Interest on Securities';

Sec.194B - Winnings from lottery or crossword puzzle;

Sec.194BB - Winnings from horse race;

Sec.194C- Payments to contractors and sub contractors;

Sec.194D - Insurance Commission;

Sec.194E - Payments to non resident sportsmen;

Sec.94EE - Payments in respect of deposit under NSS etc.,

Sec.94F - Payments on account of repurchase of units by mutual fund or UTI;

Sec.194G - Commission, etc., on the sale of lottery tickets;

Sec.194H - Commission or brokerage;

Sec.194I - Rent;

Sec.194J - Fees for professional and technology;

Sec.194K - Income in respect of units;

Sec.194L - Payment of compensation on acquisition of capital assets;

Sec.194LA - Payment of compensation on acquisition of certain immovable properties;

Sec.195 - Other items;

Sec.196A - Income in respect of units of non residents;

Sec.196B - Income from units;

Sec.196C - Income from foreign currency bonds or shares of Indian company;

Sec.196D - Income of Foreign Institutional Investors from securities.

Shall be paid to the credit of Central Government -

* In the case of deduction by or on behalf of the Government, on the same day;

* In the case of deduction by or on behalf of persons other than Government-

* In respect of sums deducted in accordance with the provisions of Sections 193, 194A, 194C, 194D, 194E, 194G, 194H, 194J, 195, 196A, 196B, 196C and 196D-

* Where the income by way of interest on securities referred to in above sections is credited by a person to the account of the payee as on the date up to which the accounts of such person are made, within two months of the expiration of the month in which that date falls;

* In any other case within one week from the last day of the month in which the deduction is made

* The Assessing Officer may, in special cases, and with the approval of the Joint Commissioner may permit any person to pay the income tax deducted from any income by way of interest on securities or any income by way of insurance commission or any income by way of commission or brokerage referred to in Section 194H quarterly on July 15, October 15, January 15 and April 15;

* In respect of sums deducted in accordance with the other provisions within one week from the last day of the month in which the deduction is made. The Assessing Officer may, in special cases, and with the approval of the Joint Commissioner permit an employer to pay income tax deducted from any income chargeable under the head 'Salaries' quarterly on June 15, September 15, December 15 and March 15.

* All sums paid under Sec.192(1A) shall be paid to the credit of the Central Government-

* In the case of payment on behalf of the Government, on the same day;

* In all other cases, within one week from the last day of each month on which the income tax is due under Sec. 192 (1B);

* The person responsible for making the deduction from any income chargeable under the head 'salaries' or the person who pays tax, referred in Sec. 192 (1A) or, in cases covered by Sec. 192 (5), the trustees shall pay the amount of tax so deducted to the credit of the Central Government by remitting it within two months of the expiration of the month in which that date falls into any branch of RBI or the SBI or any authorized bank accompanied by an income tax challan. Where the deduction or payment is made by or on behalf of Government, the amounts shall be credited within the time and in the manner aforesaid without production of a challan.

* The person responsible for making deduction under Sec. 193, 194, 194A, 194B, 194BB, 194C, 194D, 194E, 194EE, 194F, 194G, 194H, 194-I, 194J, 194K, 195, 196A, 196B, 196C and 196D shall pay the amount of tax so deducted to the credit of the Central Government within two months of the expiration of the month in which that date falls into any branch of RBI or SBI or any authorized banks accompanied by an income tax challan. Where the deduction is made by or on behalf of the Government the amount shall be credited within the time and manner aforesaid without production of a challan.

The substituted Rule 31 deals with the certificate of tax deducted at source or tax paid under Sec. 192 (1A). The certificate of deduction of tax at source or, the certificate of payment of tax by the employer on behalf of the employee, under section 203 to be furnished by any person deduction tax in accordance with Sec. 192 in Form 16.

In the case of an individual resident in India, where the income from salaries before allowing deductions under Sec. 16 of the Income tax Act, 1961 does not exceed Rs.1,50,000, the certificate of deduction of tax at source shall be in Form No.16AA.

The Certificate of tax at source shall be in Form No. 16A in case of section 193, 194, 194A, 194B, 194BB, 194C, 194D, 194E, 194EE, 194F, 194G, 194-I, 194J, 194K, 194LA, 195, 196A, 196B, 196C and 196D.

The above certificates shall be furnished within a period of one month from the end of the month during which the credit has been given or the sums have been paid or, a cheque or warrant for payment of any dividend has been issued to a shareholder.  Where the income under Sec. 193 or 194A or 194C or 194D or 194E or 194G or 194H or 194-I or 194J or 195 or 196A(2) or 196B or 196C or 196D is credited by a person to the account of the payee as on the date up to which the account of such person are made, the certificate shall be issued within a week after the expiry of two months from the month in which income is so credited.

The certificate in the case of deduction of tax under Sec. 192 (1) or payment of tax by the employer on behalf of the employee under Sec. 192(1A) or 194D may be furnished within one month from the close of the financial year in which such deduction was made. Where payment of income tax deducted is permitted quarterly in accordance with clause (a) of the proviso to clause (b) of sub rule (1) of rule 30 may be furnished within fourteen days from the date of payment of income tax.

Where more than one certificate is required to be furnished to a payee for deductions of income tax made during a financial year, the person deducting the tax, may on request from such payee, issue within one month from the close of such financial year a consolidated certificate in Form 16A for tax deducted during whole of such financial year.

If the certificate is lost, the person deducting tax at source may issue a duplicate certificate of deduction of tax at source on a plain paper giving necessary details as contained in Form 16 or Form No. 16A as the case may be. The Assessing Officer before giving credit for the tax deducted at source on the basis of duplicate certificate shall get the payment certified from the Assessing Officer designated in this behalf by the Chief Commissioner or the Commissioner and shall also obtain an indemnity bond from the assessee.

The newly substituted Rule 31A provides that every person responsible for deducting tax in accordance with Sec.200 (3) of the Act, deliver or cause to be delivered to the Director General of Income Tax (systems) or the person authorized by the Director General of Income Tax (systems), quarterly statement in Form No. 24Q in respect of deduction at source under Sec. 192(1) and 192 (1A) and in Form No. 26Q in respect of other cases of deduction of tax at source on or before 15th July, 15th October, 15th January in respect of the first three quarters of the financial year and on or before the 15th June following the last quarter of the financial year.

Where the deductor is an office of Government or a company or a person required to get his accounts audited under Sec. 44AB in the immediately preceding financial year or the number of deductees' records in a quarterly statement for any quarter of the immediately preceding financial year is equal to or more than fifty, the person responsible for deducting tax at source and the principal officer in the case of a company shall deliver or cause to be delivered such quarterly statements on computer media.

A person responsible for deducting the tax at source and preparing quarterly statement shall quote his tax deduction and collection account number (TAN) and permanent account number (PAN) in the quarterly statement. The PAN shall not be required to be quoted where the tax has been deducted by or on behalf of the Government. The PAN of all persons in respect of whose income tax has been deducted shall be quoted. But the PAN shall not be required in respect of the persons to whom the second proviso to Sec. 139A (5B) of the Act applies. The particulars of the tax paid to the Government are to be furnished.

The person responsible for deducting tax at source and preparing quarterly statements on computer media shall prepare the quarterly statement as per the data structure provided by the e-filing Administrator designated by the Board for the purposes of administration of Electronic filing of Returns of Tax deducted at Source Scheme, 2003 supported by a declaration in Form No. 27A in paper format.  In case any compression software has been used for preparing the statement such compression software shall be furnished on the same computer media. A label indicating name, PAN, tax deduction and collection account number and address of the person responsible for deduction of tax at source, the period to which the statement pertains and the volume number of the said computer media in case more than one volume of such media is used.

Discussions to this article

[anoop drolia]

Dear Mr. M. GOVINDARAJAN I have been reading your Article on the TDS and have a samll query if u can throw some light on it it would be great. After receipt of approval of CIT an approved suoerannuation fund has been wound up .The bebeficiaries the sums of the fund have been paid after deduction of tax as per Part B of Fourth Schedule of IT Act I,e. @ average rate of tax of the beneficairy for the last three years, the Tax so deducted has been paid into Govt. A/C. At SBI. Now As per rule 33 of The Income Tax Rules, a statement giving the prescribed particulars have to be sent within two months from the end of the financial year to the AO referred in rule 36A. Rule 36A states "The returns referred to in Rules 37 and 37A shall be furnished to the Director General of Income-tax(Systems) or the person or agency authorised by DGIT(Systems)" Now Rule 36A refres to Rule 37 & 37A and does not mention Rule 33 whereas Rule 33 refers to Rule 36A. Further Rules 37 & 37A (as referred to in Rule 36A) deals with returns 24 & 26 only. there seems to be no requiremnt of filing return 24 in our case being discussed but only a staement as per Rule 33. Therefore where and how exactly the statement as referred to in Rule 33 is to be sent. Even accepting that though Rule 36A does not refer to Rule 33 but as rule 33 refers to Rule 36A it should be DGIT(Systems) or person authorised by it which in effect means tin facilitation centres. Also that a only a paper return is possible as there is no e-fining format as per rule 33 and form 24 is not for this purpose. Further also as no. of deductees is less than 50 and it being a superannuatuion fund wherein Tax audit is not applicable a paper return should be accepted otherwise also. However the tin- centres are not accepting the statement sent to them i.e. satement in paper as per rule 33. Is my understanding on all matters discussedc above is faulty or correct like and if correct how to and where sent satement as per Rule 33 1. Statement as per Rule 33-in paper format 2. no other requirement of any form or filings like form24 or compulsory e-filing 3. there is also no rule for issuing any certificate to deductees say tds certificate or any other. 4. nothing to be done except depositing TDS and sending statement as per Rule 33 BUT HOW. The only alternae left would be to send by REGD. Post Ad to NSDL. Or if u could suggest something. one more query on the issue from Deductees point of view. They get no certificate or statement of tax deducted as their is no requiremnt.What should they do. As tax is decucted at the average rate of tax as per Part B Fourth Schedule so one can say the tax part is taken care of on amounts recd. by deductees. Is it so. Thanks & Regards Anup Kumar Drolia Chartered Accountant