Issue of certificate for TDS under various provisions of the Income-tax Act, 1961--Discontinuance of form No. 16B--Regarding - Income Tax - 664/1993

Issue of certificate for TDS under various provisions of the Income-tax Act, 1961--Discontinuance of form No. 16B--Regarding Circular No. 664 Dated 29/9/1993 Reference is invited to the Board's Circular No. 597 (F. No. 275/42/91-IT(B)), dated 27th March, 1991 (see [1991] 189 ITR (St.) 32), containing instructions regarding the use of Forms Nos. 16, 16A and 16B for issuing certificates of tax deducted at source, under the various provisions of the Income-tax Act, 1961. These three Forms had replaced the earlier unified Form No. 16 with effect from 28th February, 1991, vide the Income-tax (Sixth Amendment) Rules, 1991, notified under S. O. No. 148(E), dated 28th February, 1991 (see [1991] 188 ITR (St.) 89). 2. In the light of the experience gained from the use of Form No. 16B and with a view to further streamlining the work of issue of certificates for tax deducted at source, the Central Government have decided to discontinue the use of Form No. 16B and to substitute it with Form No. 16A with effect from 1st July, 1993. In other words the TDS Certificates which were required to be issued in Form No. 16B, will now be issued in Form No. 16A, with effect from 1st July, 1993. For this purpose, rule 31 of the Income-tax Rules, 1962, has been suitably amended by the Income-tax (Eleventh Amendment) Rules, 1993, published under Notification No. S.O. 405(E), dated 21st June, 1993 (see [1993] 202 ITR (St.) 30). A copy of this notification is enclosed for information and guidance at annexure I. In addition, the following points may also be noted for guidance and compliance : (i) Under the provisions of section 203 of the Income-tax Act, 1961, every person deducting tax in accordance with the provisions of sections 192 to 194A, 194AA, 194B, 194D, 194E, 194EE, 194F, 194G, 194H, 195, 196A, 196B, 196C and 196D, is required to furnish a certificate to the effect that tax has been deducted and to specify therein, inter alia, the amount deducted and any other particulars that may be prescribed. This certificate has to be furnished within the period prescribed under rule 31 of the Income-tax Rules, 1962, to the persons to whose account credit is given or to whom the payment is made or the cheque or warrant is issued, as the case may be. (ii) The existing Form No. 16 shall continue to be used for issuing certificates of tax deducted at source under section 192, relating to salaries. (iii) The existing Form No. 16A shall, with effect from 1st July, 1993, be used for issuing the certificates of tax deducted at source under : (a) section 193, relating to interest on securities ; (b) section 194 relating to dividends ; (c) section 194A relating to interest other than interest on securities ; (d) section 194B relating to winnings from lotteries or cross-word puzzles ; (e) section 194BB relating to winnings from horse races ; (f) section 194C, relating to payment to contractors and sub-contractors ; (g) section 194D relating to insurance commission ; (h) section 194E relating to payment to non-resident sportsmen/sports associations ; (i) section 194EE relating to payment in respect of deposits under the National Savings Scheme ; (j) section 194F relating to payment on account of repurchase of units by a mutual fund or the Unit Trust of India ; (k) section 194G relating to payment of commission, remuneration or prize on sale of lottery tickets ; (l) section 196 relating to payment on other sums to a non-resident or a foreign company ; (m) section 196A(2) relating to income of foreign company ; (n) section 196B relating to income from units payable to an offshore fund ; (o) section 196C relating to income from foreign currency bonds or shares of an Indian company ; and (p) section 196D relating to income of Foreign Institutional Investors from securities. (iv) Both Forms Nos. 16 and 16A will be issued by tax deductors on their own stationery, including computer stationery or, on printed forms which may be available from the market. Tax deductors should take care while procuring these Forms that the same are in the prescribed pro forma. (v) Forms Nos. 16 and 16A shall not bear any serial number as before. Copies of these forms are enclosed as annexures II and III. (vi) As Form No. 16B is exactly similar to Form No. 16A excepting that it bears a serial number, it has been decided that tax deductors can utilise these forms by scoring out the serial number and writing "16A" in place of "16B", till stocks last with them. Similarly, the Income-tax Department would continue to sell these forms by converting them to Form No. 16A, till stocks last. 3. As per the provisions of sub-rule (3) of rule 31, the aforesaid TDS certificates are to be furnished to the payee within a period of one month and fourteen days from the date of credit or payment of the sum, or as the case may be, from the date of issue of a cheque or warrant for payment of any dividend to shareholders subject to the exceptions covered by the proviso to sub-rule (3). For deduction under section 192 or 194D, the certificates can be issued within one month from the close of the financial year in which deductions were made. Failure to issue these certificates within the prescribed time invites penalty under section 272A of the Income-tax Act at the rate of a minimum of Rs. 100 and a maximum of Rs. 200 for every day during which the failure continues. 4. According to the provisions of section 206 of the Income-tax Act, 1961, read with rule 37 of the Income-tax Rules, 1962, the person responsible for deducting tax under any of the provisions of Chapter XVIIB of the Income-tax Act is required to file an annual return of tax deducted at source, within the prescribed time, after the end of financial year during which deduction is made. For ready reference the table given below rule 37 which specifies the various annual returns, the forms in which these returns are to be furnished and the month's by the end of which these returns have to be filed with the concerned Assessing Officer (as per rule 36A), is reproduced below : Sl. No. Nature of returns Form No. Month 1. Annual return of deduction of tax under section 192 from "Salaries" 24 May 2. Annual return of deduction of tax under section 193 from "Interest on securities" 25 June 3. Annual return of deduction of tax under section 194 from "Dividends" 26 April 4. Annual return of deduction of tax under section 194A from "Interest other than interest on securities" 26A June 5. Annual return of deduction of tax under section 194B from "Winnings from lotteries or cross-word puzzles" 26B May 6. Annual return of deduction of tax under section 194BB from "Winnings from horse races" 26BB May 7. Annual return of deduction of tax under section 194C from "Payments to any contractor or sub-contractor" 26C June 8. Annual return of deduction of tax under section 194D from "Insurance commission" 26D June 9. Annual return of insurance commission paid/credited during the year without deduction of tax 26E June 10. Annual return of deduction of tax under section 194EE from "Payments in respects of deposits under National Savings Scheme 26F June 11. Annual return of deduction of tax under section 194F from "Payments on account of repurchase of units by Mutual Fund or Unit Trust of India" 26G June 12. Annual return of deduction of tax under section 194G from "Commission, etc., on sale of lottery tickets" 26H June 13. Annual return of deduction of tax under section 194H from "Commission, brokerage, etc." 26I June (N.B. Deduction of tax at source under section 194H was applicable during the period 1st October, 1991, to 31st May, 1992, only) It may be mentioned that if a person fails to furnish in due time, any of the aforesaid annual returns, he shall be liable to pay a penalty under section 272A of the Income-tax Act, 1961, at the rate of a minimum of rupees one hundred and a maximum of rupees two hundred for every day during which the failure continues, subject, however, to the condition that the amount of such penalty shall not exceed the amount of tax which was deductible or collectible at source. 6. This may please be brought to the notice of all Disbursing Officers of the Departments of the Government of India, State Government, Public Sector Undertakings, etc. In case any assistance is needed, the Income-tax Officer concerned and/or the Public Relations Officer of the Income-tax Department may please be contacted. 7. Copies of this circular are available with the Directorate of Income-tax (RSP PR), 6th Floor, Mayur Bhawan, Connaught Circus, New Delhi-110 001. 8. This Circular supersedes Board's Circular No. 597, dated 27th March, 1991 (see [1991] 189 ITR (St.) 32). 9. Hindi version will follow. (Sd.) Sanjay Fateh Bahadur, Officer on Special Duty (Budget).