Section 203 of Income Tax Act and TDS Certificate
Furnishing of Certificate for Tax Deducted
Section 203 requires the DDO to furnish to the employee a certificate in Form 16 detailing the amount of TDS and certain other particulars. Rule 31 prescribes that Form 16 should be furnished to the employee by 31st May after the end of the financial year in which the income was paid and tax deducted. Even the banks deducting tax at the time of payment of pension are required to issue such certificates. Revised Form 16 annexed to Notification No 11 dated 19-02-2013 is enclosed. The certificate in Form 16 shall specify
| (a) | Valid permanent account number (PAN) of the deductee; | |
| (b) | Valid tax deduction and collection account number (TAN) of the deductor; | |
| (c) | (i) Book identification number or numbers (BIN) where deposit of tax deducted is without production of challan in case of an office of the Government; | |
| (ii) Challan identification number or numbers (CIN*) in case of payment through bank. | ||
| (*Challan identification number (CIN) means the number comprising the Basic Statistical Returns (BSR) Code of the Bank branch where the tax has been deposited, the date on which the tax has been deposited and challan serial number given by the bank.) | ||
| (d) | Receipt numbers of all the relevant quarterly statements of TDS (24Q). The receipt number of the quarterly statement is of 8 digit. |
Further as per Circular 04/2013 dated 17-04-2013 all deductors (including Government deductors who deposit TDS in the Central Government Account through book entry) shall issue the Part A of Form No. 16, by generating and subsequently downloading it through TRACES Portal and after duly authenticating and verifying it, in respect of all sums deducted on or after the 1st day of April, 2012 under the provisions of section 192 of Chapter XVII-B. Part A of Form No 16 shall have a unique TDS certificate number. ‘Part B (Annexure)’ of Form No. 16 shall be prepared by the deductor manually and issued to the deductee after due authentication and verification alongwith the Part A of the Form No. 16.
It may be noted that under the new TDS procedure, TAN of deductee/ PAN of the deductee and receipt number of TDS statement filed by the deductor act as unique identifier for granting online credit of TDS to the decutee. Hence due care should be taken in filling these particulars. Due care should also be taken in indicating correct CIN/ BIN in TDS statement.
If the DDO fails to issue these certificates to the person concerned, as required by section 203, he will be liable to pay, by way of penalty, under section 272A(2)(g), a sum which shall be Rs.100/- for every day during which the failure continues.
It is, however, clarified that there is no obligation to issue the TDS certificate in case tax at source is not deductible/deducted by virtue of claims of exemptions and deductions.
[Note: TRACES is a web-based application of the Income – tax Department that provides an interface to all stakeholders associated with TDS administration. It enables viewing of challan status, downloading of NSDL Conso File, Justification Report and Form 16 / 16A as well as viewing of annual tax credit statements (Form 26AS). Each deductor is required to Register in the Traces portal. Form 16/16A issued to deductees should mandatorily be generated and downloaded from the TRACES portal].
Certain essential points regarding the filing of the Statement and obtaining TDS certificates are mentioned below:
| (a) | TDS certificate (Form16) would be generated for the deductee only if Valid PAN is correctly mentioned in the Annexure II of Form 24Q in Quarter 4 filed by the deductor. Moreover, employers are advised to ensure in Form 16 that the status of “matching” with respect to “Form 24G/OLTAS” is ‘F’. If the status of matching other than ‘F’, kindly take necessary action promptly to rectify the same. It is pertinent to mention here that certain facilities have been provided to the deductors at website www.tdscpc.gov.in/ including online correction of statements (Form 24Q). | |
| (b) | The employer should quote the gross amount of salary (including any amount exempt under section 10 and the deductions under chapter VI A) in column 321 (Amount paid/credited) of Annexure I of Form 24Q as per NSDL RPU (hereafter Return Preparation Utility). | |
| (c) | The employer should quote the amount of salary excluding any amount exempt under section 10 in column 333 (Total amount of salary) of Annexure II of Form 24Q as per NSDL RPU. | |
| (d) | TDS on Income (including loss from House Property) under any Head other than the head ‘Salaries’ offered for TDS (shown in column 339) can be shown in column 350 (Reported amount of TDS by previous employer, as per NSDL RPU. | |
| (e) | Employer is advised to quote Total Taxable Income (Column 344) in Annexure II without rounding-off and TDS should be deducted and reported accordingly i.e. without rounding-off of TDS also. |
Example:
| Total Taxable Income | Total Taxable Income (Rounded Off) | TDS to be Deducted | TDS Deducted/ Reported after rounding-off of income | Short Deduction |
| Rs.1350094 | Rs. 1350090 | Rs. 235028.20 | Rs 235027 | Rs.1.20 |
If an assessee is employed by more than one employer during the year, each of the employers shall issue Part A of the certificate in Form No. 16 pertaining to the period for which such assessee was employed with each of the employers and Part B may be issued by each of the employers or the last employer at the option of the assessee.
Authentication by Digital Signatures:
| (i) | Where a certificate is to be furnished in Form No. 16, the deductor may, at his option, use digital signatures to authenticate such certificates. | |
| (ii) | In case of certificates issued under clause (i), the deductor shall ensure that |
| (a) | the conditions prescribed in para 4.6.1 above are complied with; | |
| (b) | once the certificate is digitally signed, the contents of the certificates are not amenable to change; and | |
| (c) | the certificates have a control number and a log of such certificates is maintained by the deductor. |
| ♦ | The digital signature is being used to authenticate most of the e-transactions on the internet as transmission of information using digital signature is failsafe. It saves time specially in organisations having large number of employees where issuance of certificate of deduction of tax with manual signature is time consuming (Circular no 2 of 2007 dated 21.05.2007) |
Source :CIRCULAR NO.20/2015 [F.NO.275/192/2015-IT(B)], DATED 2-12-2015 issued by CBDT
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