A correction TDS/TCS statement can be furnished multiple times to incorporate changes in the regular TDS/TCS statement whereas a regular TDS/TCS statement will be accepted at the TIN central system only once.
What are the important points to be kept in mind while preparing correction statement more than once on the same regular statement?
You have to kept in mind, the following points while preparing correction statement more than once on the same regular statement:
1. The TDS/TCS statement on which correction is to be prepared should be updated with details as per all previous corrections.
2. Modifications/addition/deletion in correction statements accepted at the TIN central system only should be considered.
The first correction filed by me contains three types of correction (three PRNs / Token Number) and one of the types of correction has got rejected at the TIN central system. What should I do?
The steps as under should be followed:
1. You have to update modifications as per the accepted corrections in the TDS statement.
2. Identify the record for which correction was rejected earlier by its sequence no. and fields for identification
3. Correct the said record.
4. Correction statement should contain updated values as well as value of identification field as per regular statement.
Which Provisional Receipt Number / Token Number should I quote while preparing correction statement more than once on the same regular statement?
There are two fields for Provisional Receipt Number (PRN) / Token Number in a correction statement as under:
a. Original Provisional Receipt Number / Token Number - PRN of the regular statement should be mentioned in this field.
b. Previous Provisional Receipt Number / Token Number - PRN of the last accepted correction statement should be mentioned in this field. In case the value in this field is incorrectly mentioned, the statement will get rejected at TIN central system for the reason: "Either Previous Provisional Receipt No. provided is incorrect or combination of Original Provisional Receipt Number / Token Number and Previous Provisional Receipt Number / Token Number is not in sequence"
Example:
Single batch correction statement - Only one type of correction in the file
a. You have filed a regular statement having PRN / Token Number 010010200083255 and subsequently filed a single batch correction statement having PRN / Token Number 010010300074112. While preparing correction statement, you have to mention PRN / Token Number 010010200083255 in the field original PRN and the PRN / Token Number 010010300074112 in the field Previous PRN.
Multiple batch correction statement - different types of correction in a single file
b. You have filed a regular statement having PRN / Token Number 010010200083255 and subsequently filed a multi batch correction statement having three batches and corresponding PRNs / Token Numbers as 010010300074112, 010010300074123 and 010010300074134. While preparing the correction statement, you have to mention PRN / Token Number 010010200083255 in the field original PRN and check the status of all the three PRNs of correction statement.
If all the three PRNs / Token Numbers are accepted at the TIN central system, you may mention any of the three PRNs / Token Numbers in the field previous PRN.
If any of the three PRNs / Token Numbers is rejected, then you should mention the PRN / Token Number which has been accepted at the TIN central system in the field Previous PRN.
If all the three PRNs / Token Numbers are rejected, then you must mention the PRN / Token Number of the regular statement, i.e. 010010200083255 in the field Previous PRN.
How many times can I update PAN of a deductee/transacting party?
Structurally valid PAN of a deductee in the regular statement can be updated to another structurally valid PAN only once.
When does a statement get ‘Partially Accepted’?
A correction statement containing updates in PAN of deductee/employee may get Partially Accepted. This is possible when the PAN in the any of the records being updated by you in the correction statement is invalid, i.e. PAN not present in PAN Master Database. In such a scenario, the said record gets rejected resulting in partial acceptance of the statement.
What should I do if the status of correction statement filed by me is ‘Partially accepted’?
In case correction statement is in status ‘Partially accepted’, you have follow steps as under:
1. You have to update modifications as per the accepted records in the TDS statement.
2. Identify the deductee/salary record which has got rejected due to invalid PAN.
3. Rectify the incorrect PAN
4. Correction statement should contain value of identification keys as per regular statement along with the updated values.
What could be the cause of rejection of TDS/TCS statement for the reason “Total Deposit amount of deductees is more than Challan amount actually deposited in bank”?
The total tax deposited amount as per challan should be greater than or equal to the total tax deposited amount as per deductee details, else a regular TDS/TCS statement will not get validated through FVU.
If you file a correction statement for adding deductee records under a particular challan, the total tax deposited as per challan in regular statement should be greater than or equal to the total tax deposited in deductee details as per regular as well as correction statement.
Note: Amount in the fields Interest and others in the challan is not considered in the total tax deposited as per challan.
Provisional Receipt Number is now referred as Token Number with effect from FY. 2010-11 onwards.
Monday, September 12, 2011
Sunday, September 11, 2011
Correction in OLTAS Income Tax/TDS challan after payment
Recently I faced a situation where the tax demand on regular assessment of my client for A.Y 2008-09 was deposited with a nationalized bank but wrongly the said payment of demand was done towards A.Y 2010-11. This situation may have been faced by many assessees because there may always a possibility of mentioning wrong Assessment year or wrong PAN/TAN etc in the TDS Challan or in Income Tax Challans.
In such situation the first thing that comes to mind is how one can get the challan corrected after the payment of tax so that right credit of tax is given to the assessee/deductor concerned. The power to amend such wrong details in challan after payment of tax in OLTAS has been given to Assessing officer and Bank depending upon the type of correction, which has been provided as follows for the benefit of all concerneds.
NSDL receives tax collection data as uploaded by the bank. It is not authorized to carry out any changes in the data sent by the bank to TIN.
The fields that can be corrected and the entity authorized to carry out corrections are as below:
Sl. No. Type of Correction on Challan Performed By
1 PAN/TAN - Assessing Officer
2 Assessment Year - Assessing Officer
3 Major Head - Assessing Officer /Bank
4 Minor Head - Assessing Officer
5 Nature of Payment - Assessing Officer
6 Total Amount - Bank
7 Name - Bank
Thus application should be made for correction to the A.O or Bank in case of any mistake in Income Tax/TDS Challan depending upon the type of correction as mentioned above.
In such situation the first thing that comes to mind is how one can get the challan corrected after the payment of tax so that right credit of tax is given to the assessee/deductor concerned. The power to amend such wrong details in challan after payment of tax in OLTAS has been given to Assessing officer and Bank depending upon the type of correction, which has been provided as follows for the benefit of all concerneds.
NSDL receives tax collection data as uploaded by the bank. It is not authorized to carry out any changes in the data sent by the bank to TIN.
The fields that can be corrected and the entity authorized to carry out corrections are as below:
Sl. No. Type of Correction on Challan Performed By
1 PAN/TAN - Assessing Officer
2 Assessment Year - Assessing Officer
3 Major Head - Assessing Officer /Bank
4 Minor Head - Assessing Officer
5 Nature of Payment - Assessing Officer
6 Total Amount - Bank
7 Name - Bank
Thus application should be made for correction to the A.O or Bank in case of any mistake in Income Tax/TDS Challan depending upon the type of correction as mentioned above.
Wednesday, August 3, 2011
Form 24G to be filed by Government Account Office
The Pay and Accounts Office (PAO)/ District Treasury Office (DTO)/ Cheque Drawing and Disbursing Office (CDDO) are required to file Form 24G as per Income-tax Department Notification no. 41/2010 dated May 31, 2010. In case of an office of the Government, where tax has been paid to the credit of Central Government without the production of a challan associated with deposit of the tax in a bank, the PAO / CDDO / DTO or an equivalent office (herein after called as AO in this document) government is required to file Form 24G.
Form 24G is to be furnished only in electronic form.
A unique seven digit Accounts Office Identification Number (AIN) shall be allotted by the Directorate of Income Tax (Systems), Delhi, to every AO. Each AO will be identified in the system by this number.
Each DDO will be identified in the system by a Tax Deduction and Collection Account Number (TAN). This number is allotted by Income Tax Department.
Every AO shall furnish one complete, correct and consolidated Form 24G every month having details of all type of deduction / collection viz. TDS-Salary / TDS-Non Salary / TDS-Non Salary Non Residents / TCS.
Every Form 24G shall be prepared in accordance with the data structure prescribed by the Income Tax Department (ITD).
The contents of Form 24G should be as follows:
1. Details of the AO filing Form 24G (AIN, name, demographic information, contact details)
2. Category of AO (Central / State Government) along with details of ministry / state.
3. Statement details (month and year for which Form 24G is being filed)
4. Payment summary; nature of deduction wise (TDS – Salary /TDS Non-salary / TDS – Non-salary Non-resident / TCS)
5. DDO wise payment details (TAN of DDO, name, demographic details, total tax deducted and remitted to the Government account (A.G. / Pr.CCA)
6. DDOs which are associated with the AO. If the DDO wants to add/delete or update details of DDO, same should be mentioned in the statement.
AO can prepare the statement either using his own software or using the Form 24G Preparation Utility developed by National Securities Depository Limited (NSDL) and freely available at Tax Information Network (TIN) website (www.tin-nsdl.com) or ITD website (www.incometaxindia.gov.in). You can click here to download the Form 24G Preparation Utility.
Once the statement is prepared, the AO shall validate the same by using File Validation Utility (FVU) developed by National Securities Depository Limited (NSDL) and freely available at Tax Information Network (TIN) or ITD website. You can click here to download the Form 24G FVU.
The statement can be furnished in Compact Disk (CD) at any of the TIN-Facilitation Centers (TIN-FC) managed by National Securities Depository Limited (NSDL) (list available at Tax Information Network (TIN) or ITD website) along with Form 24G Statement Statistics Report (generated through File Validation Utility), duly signed by the AO.
Where the DDO and AO are same, the statistics report shall be counter signed by his superior officer.
Once Form 24G is accepted by the TIN-FC, it will issue a provisional receipt with a unique number (provisional receipt number) to the AO as a proof of submission of the statement
In respect of Form-24G who is called DDO and what is Account office name?
The Pay and Accounts Office (PAO)/ District Treasury Office (DTO)/ Cheque Drawing and Disbursing Office (CDDO) are required to file Form 24G as per Income-tax Department Notification no. 41/2010 dated May 31, 2010. In case of an office of the Government, where tax has been paid to the credit of Central Government without the production of a challan associated with deposit of the tax in a bank, the PAO / CDDO / DTO or an equivalent office (herein after called as AO in this document) government is required to file Form 24G.
Form 24G is to be furnished only in electronic form.
A unique seven digit Accounts Office Identification Number (AIN) shall be allotted by the Directorate of Income Tax (Systems), Delhi, to every AO. Each AO will be identified in the system by this number.
Each DDO will be identified in the system by a Tax Deduction and Collection Account Number (TAN). This number is allotted by Income Tax Department.
Every AO shall furnish one complete, correct and consolidated Form 24G every month having details of all type of deduction / collection viz. TDS-Salary / TDS-Non Salary / TDS-Non Salary Non Residents / TCS.
Every Form 24G shall be prepared in accordance with the data structure prescribed by the Income Tax Department (ITD).
The contents of Form 24G should be as follows:
Details of the AO filing Form 24G (AIN, name, demographic information, contact details)
Category of AO (Central / State Government) along with details of ministry / state.
Statement details (month and year for which Form 24G is being filed)
Payment summary; nature of deduction wise (TDS – Salary /TDS Non-salary / TDS – Non-salary Non-resident / TCS)
DDO wise payment details (TAN of DDO, name, demographic details, total tax deducted and remitted to the Government account (A.G. / Pr.CCA)
DDOs which are associated with the AO. If the DDO wants to add/delete or update details of DDO, same should be mentioned in the statement.
AO can prepare the statement either using his own software or using the Form 24G Preparation Utility developed by National Securities Depository Limited (NSDL) and freely available at Tax Information Network (TIN) website (www.tin-nsdl.com) or ITD website (www.incometaxindia.gov.in). You can click here to download the Form 24G Preparation Utility.
Once the statement is prepared, the AO shall validate the same by using File Validation Utility (FVU) developed by National Securities Depository Limited (NSDL) and freely available at Tax Information Network (TIN) or ITD website. You can click here to download the Form 24G FVU.
The statement can be furnished in Compact Disk (CD) at any of the TIN-Facilitation Centers (TIN-FC) managed by National Securities Depository Limited (NSDL) along with Form 24G Statement Statistics Report (generated through File Validation Utility), duly signed by the AO.
Where the DDO and AO are same, the statistics report shall be counter signed by his superior officer.
Once Form 24G is accepted by the TIN-FC, it will issue a provisional receipt with a unique number (provisional receipt number) to the AO as a proof of submission of the statement.
Form 24 G applicable, Govt autorities those who are doing TDS by book adjustment transfer.
What is Form 24G?
In the Government Accounting System, each DDO (Drawing & Disbursement Officer) is associated with a specific Accounts Officer (AO), who processes the bills prepared by the DDO. Form 24G is a single monthly statement where the AO will consolidate the payment details from each of the DDO, for each type of deduction/collection (TDS-Salary/ TDS-Non Salary/ TDS- Non Salary Non Residents/ TCS) in a single form known as Form 24G.
What is the periodicity of filing Form 24G?
Every AO is required to file Form 24G every month for every type of deduction/ collection i.e. TDS-Salary / TDS Non-Salary / TDS-Non Salary Non-Residents / TCS in a single form.
Who is required to file Form 24G?
Every Accounts Officer (AO) who processes the bills prepared by the DDO has to furnish the monthly Form 24G. In case of State Government the District Treasury Officer (DTO) will be responsible for filing Form 24G.
What is AIN?
Accounts Office Identification Number (AIN) is a seven digit unique identification number issued by the Directorate of Income Tax (Systems), Delhi, to each Accounts Office. It is mandatory for an AO to have an AIN for submitting the Form 24G.
How to obtain AIN?
Application for AIN has to be made in the form ‘Application for allotment of Accounts Office Identification Number’ (AIN application form). Click here for detailed guidelines for procedure to obtain AIN.
How intimation of AIN allotment will be given to the Accounts Officer?
An AIN allotment letter will be sent to the AO giving details of AIN allotted to him.
Is it mandatory to file Form 24G in electronic format?
Yes, it is mandatory for every Accounts Officer to file Form 24G in electronic format only.
In case of change in the details of DDOs associated to the AO, to whom and how will the same be communicated?
Any change in the details of DDOs associated to the AO are to be stated in Form 24G, which is to be prepared as per the prescribed data structure.
What does a Form 24G contain?
Form 24G contains the following details:
1. Details of the AO / DTO filing Form 24G (AIN, name, demographic information, contact details)
2. Category of AO (Central / State Government) along with details of ministry / state.
3. Statement details (month and year for which Form 24G is being filed)
4. Payment summary; nature of deduction wise (TDS – Salary /TDS Non-salary / TDS – Non-salary Non-resident / TCS)
5. DDO wise payment details (TAN of DDO, name, demographic details, total tax deducted and remitted to the Government account (A.G. / Pr.CCA)
Is it mandatory to mention Accounts Office Identification Number (AIN) in the Form 24G?
Yes, it is mandatory to mention the seven digit Accounts Office Identification Number (AIN) in the Form 24G.
Is it mandatory to mention TAN of DDOs in the Form 24G?
Yes, it is mandatory to mention the ten digit TAN (allotted by ITD) of every DDO record in Form 24G.
At the time of filing Form 24G if the valid TAN of the DDO is not available the following values can be mentioned in the TAN field:
TANAPPLIED: if the DDO has applied for a TAN
TANNOTAVBL: if TAN of DDO is not available
TANINVALID: if TAN of DDO is not valid.
Is it necessary to submit Statement Statistic Report with Form 24G?
Every Form 24G should be accompanied with the Statement Statistic Report signed by the Accounts Officer.
By whom should the Statement Statistic Report be signed?
The Accounts Officer (AO) will sign the statement statistic report. In case the AO (PAO) is also a DDO, whose details are being given in the statement, statistic report is to be counter signed by the person who is his immediate superior.
Procedure for application for Accounts Office Identification Number (AIN) for Government offices required to file Form 24G
Procedure for application for Accounts Office Identification Number (AIN) for Government offices required to file Form 24G
Introduction
The Pay and Accounts Office (PAO)/ District Treasury Office (DTO)/ Cheque Drawing and Disbursing Office (CDDO) are required to file Form 24G as per Income-tax Department Notification no. 41/2010 dated May 31, 2010. In case of an office of the Government, where tax has been paid to the credit of Central Government without the production of a challan associated with deposit of the tax in a bank, the PAO / CDDO / DTO is required to file Form 24G. For filing Form 24G each PAO / CDDO / DTO is required to have an AIN. AIN is the identification of the PAO / CDDO / DTO for the purpose of filing Form 24G. It is mandatory for each PAO / CDDO / DTO to have an AIN.
How to Apply
• Application for AIN has to be made in the form ‘Application for allotment of Accounts Office Identification Number’ (AIN application form).
• The application has to be made in physical form as per guidelines provided with the AIN application form.
Allotment of AIN
• Complete and correct AIN application forms submitted by the PAO / CDDO / DTO will be forwarded to National Securities Depository Limited (NSDL) by the CIT (TDS) recommending allotment of AIN to the PAO / CDDO / DTO.
• AIN allotment letter will be sent to the PAO / CDDO / DTO at the address mentioned in the AIN allotment form.
•
Download of AIN application
Deductors who do not have a AIN can apply for one by submitting a duly filled and signed AIN application form to jurisdictional CIT (TDS).
eTDS Returns for Government Deductors
For the Financial year 2004-05, apart from corporates, all government
deductors are also liable to file eTDS and eTCS Returns. This is for
the first time that this requirement has been made mandatory for
government deductors.
Rule 36 of Income Tax Rules, prescribe the persons responsible for
filing return in the case of Offices of the government. The same is
given below…
1. Civil Audit Officers/Pay and Accounts officers for
Gazetted Officers and others who draw their from Audit
Officers/Pay and Accounts offices on separate bills; and
also for all pensioners who draw their pensions from Audit
Offices;
2. Treasury Officers for all Gazetted Officers and others who
draw their from treasuries on separate bills without countersignature
and also for all pensioners who draw their
pensions from treasuries;
3. Heads of civil or Military Offices for all Gazetted Officers
and others, except those referred to in clause (2), and all
non-Gazetted Officers, whose pay is drawn on
establishment bills or on bills countersigned by the head
office;
4. Forest Disbursing Officers and public Works
Department Disbursing Officers in cases where direct
payment from treasuries is not made, for themselves and
their establishments;
5. Head Postmasters for (i) themselves, their gazetted
subordinates and the establishments of which the
establishment pay bills are prepared by them, and (ii)
gazetted supervising and controlling officers of whose
headquarters post office they are in charge, and (iii)
pensioners drawing their pensions through post offices;
head record clerks for themselves and all the staff whose
pay is drawn in their establishment pay bills; Divisional
Engineering in respect of Telegraph and Telephone
Engineering Divisions; Accounts Officers, stores and
workshops organization and Disbursing officers in the case
of the Administrative and Audit offices;
6. (i) Controllers of Defence Accounts for Defence
Services Officers and others including civilian gazetted
officers under their payment control;
(ii) Officer Commanding Air Force Central Accounts
Office, New Delhi for Air Force Officers, and others for
whom IRLAs are maintained by them.
(iii) Supply Officer-in-charge, Naval Pay Office
Bombay for Navy Officers and ratings for whom
IRLAs are maintained by them;
(iv) Chief Accounting Officer, London for Defence
services personnel serving in or attached to High
Commission in UK;
7. The financial Advisor and Chief Accounts
Officer/Deputy Financial Advisor and Chief Accounts
Officer of Railways Concerned for all Railway
employees of the Railway audit Department under their
payment control;
8. Heads of Offices in the Missions and posts abroad
for themselves and for all gazetted and other officers
under their administrative control;
9. Trade Commissions abroad, where their
establishments are independent of Missions, for
themselves and for gazetted and other officers under
Administrative control;
10. The Chief Accounts Officer, India Supply Mission,
Washington and India Stores Department, London for
themselves and for the gazetted and other officers under
their Administrative control;
11. The Directors/Managers of the Tourist offices
abroad, for themselves and for the gazetted and other
officers under their Administrative control;
TAN
All Corporate Deductors must have a valid TAN No and
PAN No otherwise they will not be able to file the eTDS return.
Government Deductors also should have TAN No to file TDS
returns. For this they must first apply for a TAN by submitting
form 49B and attach a copy of the same with eTDS Return.
Form 24G is to be furnished only in electronic form.
A unique seven digit Accounts Office Identification Number (AIN) shall be allotted by the Directorate of Income Tax (Systems), Delhi, to every AO. Each AO will be identified in the system by this number.
Each DDO will be identified in the system by a Tax Deduction and Collection Account Number (TAN). This number is allotted by Income Tax Department.
Every AO shall furnish one complete, correct and consolidated Form 24G every month having details of all type of deduction / collection viz. TDS-Salary / TDS-Non Salary / TDS-Non Salary Non Residents / TCS.
Every Form 24G shall be prepared in accordance with the data structure prescribed by the Income Tax Department (ITD).
The contents of Form 24G should be as follows:
1. Details of the AO filing Form 24G (AIN, name, demographic information, contact details)
2. Category of AO (Central / State Government) along with details of ministry / state.
3. Statement details (month and year for which Form 24G is being filed)
4. Payment summary; nature of deduction wise (TDS – Salary /TDS Non-salary / TDS – Non-salary Non-resident / TCS)
5. DDO wise payment details (TAN of DDO, name, demographic details, total tax deducted and remitted to the Government account (A.G. / Pr.CCA)
6. DDOs which are associated with the AO. If the DDO wants to add/delete or update details of DDO, same should be mentioned in the statement.
AO can prepare the statement either using his own software or using the Form 24G Preparation Utility developed by National Securities Depository Limited (NSDL) and freely available at Tax Information Network (TIN) website (www.tin-nsdl.com) or ITD website (www.incometaxindia.gov.in). You can click here to download the Form 24G Preparation Utility.
Once the statement is prepared, the AO shall validate the same by using File Validation Utility (FVU) developed by National Securities Depository Limited (NSDL) and freely available at Tax Information Network (TIN) or ITD website. You can click here to download the Form 24G FVU.
The statement can be furnished in Compact Disk (CD) at any of the TIN-Facilitation Centers (TIN-FC) managed by National Securities Depository Limited (NSDL) (list available at Tax Information Network (TIN) or ITD website) along with Form 24G Statement Statistics Report (generated through File Validation Utility), duly signed by the AO.
Where the DDO and AO are same, the statistics report shall be counter signed by his superior officer.
Once Form 24G is accepted by the TIN-FC, it will issue a provisional receipt with a unique number (provisional receipt number) to the AO as a proof of submission of the statement
In respect of Form-24G who is called DDO and what is Account office name?
The Pay and Accounts Office (PAO)/ District Treasury Office (DTO)/ Cheque Drawing and Disbursing Office (CDDO) are required to file Form 24G as per Income-tax Department Notification no. 41/2010 dated May 31, 2010. In case of an office of the Government, where tax has been paid to the credit of Central Government without the production of a challan associated with deposit of the tax in a bank, the PAO / CDDO / DTO or an equivalent office (herein after called as AO in this document) government is required to file Form 24G.
Form 24G is to be furnished only in electronic form.
A unique seven digit Accounts Office Identification Number (AIN) shall be allotted by the Directorate of Income Tax (Systems), Delhi, to every AO. Each AO will be identified in the system by this number.
Each DDO will be identified in the system by a Tax Deduction and Collection Account Number (TAN). This number is allotted by Income Tax Department.
Every AO shall furnish one complete, correct and consolidated Form 24G every month having details of all type of deduction / collection viz. TDS-Salary / TDS-Non Salary / TDS-Non Salary Non Residents / TCS.
Every Form 24G shall be prepared in accordance with the data structure prescribed by the Income Tax Department (ITD).
The contents of Form 24G should be as follows:
Details of the AO filing Form 24G (AIN, name, demographic information, contact details)
Category of AO (Central / State Government) along with details of ministry / state.
Statement details (month and year for which Form 24G is being filed)
Payment summary; nature of deduction wise (TDS – Salary /TDS Non-salary / TDS – Non-salary Non-resident / TCS)
DDO wise payment details (TAN of DDO, name, demographic details, total tax deducted and remitted to the Government account (A.G. / Pr.CCA)
DDOs which are associated with the AO. If the DDO wants to add/delete or update details of DDO, same should be mentioned in the statement.
AO can prepare the statement either using his own software or using the Form 24G Preparation Utility developed by National Securities Depository Limited (NSDL) and freely available at Tax Information Network (TIN) website (www.tin-nsdl.com) or ITD website (www.incometaxindia.gov.in). You can click here to download the Form 24G Preparation Utility.
Once the statement is prepared, the AO shall validate the same by using File Validation Utility (FVU) developed by National Securities Depository Limited (NSDL) and freely available at Tax Information Network (TIN) or ITD website. You can click here to download the Form 24G FVU.
The statement can be furnished in Compact Disk (CD) at any of the TIN-Facilitation Centers (TIN-FC) managed by National Securities Depository Limited (NSDL) along with Form 24G Statement Statistics Report (generated through File Validation Utility), duly signed by the AO.
Where the DDO and AO are same, the statistics report shall be counter signed by his superior officer.
Once Form 24G is accepted by the TIN-FC, it will issue a provisional receipt with a unique number (provisional receipt number) to the AO as a proof of submission of the statement.
Form 24 G applicable, Govt autorities those who are doing TDS by book adjustment transfer.
What is Form 24G?
In the Government Accounting System, each DDO (Drawing & Disbursement Officer) is associated with a specific Accounts Officer (AO), who processes the bills prepared by the DDO. Form 24G is a single monthly statement where the AO will consolidate the payment details from each of the DDO, for each type of deduction/collection (TDS-Salary/ TDS-Non Salary/ TDS- Non Salary Non Residents/ TCS) in a single form known as Form 24G.
What is the periodicity of filing Form 24G?
Every AO is required to file Form 24G every month for every type of deduction/ collection i.e. TDS-Salary / TDS Non-Salary / TDS-Non Salary Non-Residents / TCS in a single form.
Who is required to file Form 24G?
Every Accounts Officer (AO) who processes the bills prepared by the DDO has to furnish the monthly Form 24G. In case of State Government the District Treasury Officer (DTO) will be responsible for filing Form 24G.
What is AIN?
Accounts Office Identification Number (AIN) is a seven digit unique identification number issued by the Directorate of Income Tax (Systems), Delhi, to each Accounts Office. It is mandatory for an AO to have an AIN for submitting the Form 24G.
How to obtain AIN?
Application for AIN has to be made in the form ‘Application for allotment of Accounts Office Identification Number’ (AIN application form). Click here for detailed guidelines for procedure to obtain AIN.
How intimation of AIN allotment will be given to the Accounts Officer?
An AIN allotment letter will be sent to the AO giving details of AIN allotted to him.
Is it mandatory to file Form 24G in electronic format?
Yes, it is mandatory for every Accounts Officer to file Form 24G in electronic format only.
In case of change in the details of DDOs associated to the AO, to whom and how will the same be communicated?
Any change in the details of DDOs associated to the AO are to be stated in Form 24G, which is to be prepared as per the prescribed data structure.
What does a Form 24G contain?
Form 24G contains the following details:
1. Details of the AO / DTO filing Form 24G (AIN, name, demographic information, contact details)
2. Category of AO (Central / State Government) along with details of ministry / state.
3. Statement details (month and year for which Form 24G is being filed)
4. Payment summary; nature of deduction wise (TDS – Salary /TDS Non-salary / TDS – Non-salary Non-resident / TCS)
5. DDO wise payment details (TAN of DDO, name, demographic details, total tax deducted and remitted to the Government account (A.G. / Pr.CCA)
Is it mandatory to mention Accounts Office Identification Number (AIN) in the Form 24G?
Yes, it is mandatory to mention the seven digit Accounts Office Identification Number (AIN) in the Form 24G.
Is it mandatory to mention TAN of DDOs in the Form 24G?
Yes, it is mandatory to mention the ten digit TAN (allotted by ITD) of every DDO record in Form 24G.
At the time of filing Form 24G if the valid TAN of the DDO is not available the following values can be mentioned in the TAN field:
TANAPPLIED: if the DDO has applied for a TAN
TANNOTAVBL: if TAN of DDO is not available
TANINVALID: if TAN of DDO is not valid.
Is it necessary to submit Statement Statistic Report with Form 24G?
Every Form 24G should be accompanied with the Statement Statistic Report signed by the Accounts Officer.
By whom should the Statement Statistic Report be signed?
The Accounts Officer (AO) will sign the statement statistic report. In case the AO (PAO) is also a DDO, whose details are being given in the statement, statistic report is to be counter signed by the person who is his immediate superior.
Procedure for application for Accounts Office Identification Number (AIN) for Government offices required to file Form 24G
Procedure for application for Accounts Office Identification Number (AIN) for Government offices required to file Form 24G
Introduction
The Pay and Accounts Office (PAO)/ District Treasury Office (DTO)/ Cheque Drawing and Disbursing Office (CDDO) are required to file Form 24G as per Income-tax Department Notification no. 41/2010 dated May 31, 2010. In case of an office of the Government, where tax has been paid to the credit of Central Government without the production of a challan associated with deposit of the tax in a bank, the PAO / CDDO / DTO is required to file Form 24G. For filing Form 24G each PAO / CDDO / DTO is required to have an AIN. AIN is the identification of the PAO / CDDO / DTO for the purpose of filing Form 24G. It is mandatory for each PAO / CDDO / DTO to have an AIN.
How to Apply
• Application for AIN has to be made in the form ‘Application for allotment of Accounts Office Identification Number’ (AIN application form).
• The application has to be made in physical form as per guidelines provided with the AIN application form.
Allotment of AIN
• Complete and correct AIN application forms submitted by the PAO / CDDO / DTO will be forwarded to National Securities Depository Limited (NSDL) by the CIT (TDS) recommending allotment of AIN to the PAO / CDDO / DTO.
• AIN allotment letter will be sent to the PAO / CDDO / DTO at the address mentioned in the AIN allotment form.
•
Download of AIN application
Deductors who do not have a AIN can apply for one by submitting a duly filled and signed AIN application form to jurisdictional CIT (TDS).
eTDS Returns for Government Deductors
For the Financial year 2004-05, apart from corporates, all government
deductors are also liable to file eTDS and eTCS Returns. This is for
the first time that this requirement has been made mandatory for
government deductors.
Rule 36 of Income Tax Rules, prescribe the persons responsible for
filing return in the case of Offices of the government. The same is
given below…
1. Civil Audit Officers/Pay and Accounts officers for
Gazetted Officers and others who draw their from Audit
Officers/Pay and Accounts offices on separate bills; and
also for all pensioners who draw their pensions from Audit
Offices;
2. Treasury Officers for all Gazetted Officers and others who
draw their from treasuries on separate bills without countersignature
and also for all pensioners who draw their
pensions from treasuries;
3. Heads of civil or Military Offices for all Gazetted Officers
and others, except those referred to in clause (2), and all
non-Gazetted Officers, whose pay is drawn on
establishment bills or on bills countersigned by the head
office;
4. Forest Disbursing Officers and public Works
Department Disbursing Officers in cases where direct
payment from treasuries is not made, for themselves and
their establishments;
5. Head Postmasters for (i) themselves, their gazetted
subordinates and the establishments of which the
establishment pay bills are prepared by them, and (ii)
gazetted supervising and controlling officers of whose
headquarters post office they are in charge, and (iii)
pensioners drawing their pensions through post offices;
head record clerks for themselves and all the staff whose
pay is drawn in their establishment pay bills; Divisional
Engineering in respect of Telegraph and Telephone
Engineering Divisions; Accounts Officers, stores and
workshops organization and Disbursing officers in the case
of the Administrative and Audit offices;
6. (i) Controllers of Defence Accounts for Defence
Services Officers and others including civilian gazetted
officers under their payment control;
(ii) Officer Commanding Air Force Central Accounts
Office, New Delhi for Air Force Officers, and others for
whom IRLAs are maintained by them.
(iii) Supply Officer-in-charge, Naval Pay Office
Bombay for Navy Officers and ratings for whom
IRLAs are maintained by them;
(iv) Chief Accounting Officer, London for Defence
services personnel serving in or attached to High
Commission in UK;
7. The financial Advisor and Chief Accounts
Officer/Deputy Financial Advisor and Chief Accounts
Officer of Railways Concerned for all Railway
employees of the Railway audit Department under their
payment control;
8. Heads of Offices in the Missions and posts abroad
for themselves and for all gazetted and other officers
under their administrative control;
9. Trade Commissions abroad, where their
establishments are independent of Missions, for
themselves and for gazetted and other officers under
Administrative control;
10. The Chief Accounts Officer, India Supply Mission,
Washington and India Stores Department, London for
themselves and for the gazetted and other officers under
their Administrative control;
11. The Directors/Managers of the Tourist offices
abroad, for themselves and for the gazetted and other
officers under their Administrative control;
TAN
All Corporate Deductors must have a valid TAN No and
PAN No otherwise they will not be able to file the eTDS return.
Government Deductors also should have TAN No to file TDS
returns. For this they must first apply for a TAN by submitting
form 49B and attach a copy of the same with eTDS Return.
Wednesday, November 17, 2010
Criteria / Guidelines for selection of cases for Income tax Scrutiny for Assessment year 2010-11 or Financial Year 2009-2010
Guidelines for selection of cases for Scrutiny During 2010-11
1. Selection of cases for scrutiny during the financial year 2010-11 will be done primarily through CASS this year. Manual Selection for scrutiny this year will be limited only to a few cases listed below.
2. List of cases selected during each month in accordance with selection criteria mentioned below shall be submitted by the Assessing officers to their respective Range heads by the 15th of the following month and also displayed on the notice Board of their offices .
3. These guidelines are meant only for the use of officers of the Income Tax Department .These are not to be disclosed even if a request is made under Right to Information Act, In view of the decision of the Central Information Commission in the case of Shri Kamal Vs Director (ITA-II), CBDT (order no CIC/AT/2007/00617 dated 21.02.2008)
Selection criteria Applicable to all return at all stations
a) Value of International transaction as defined in 92B exceeds 15 Crore.
b) Cases involving addition in an earlier assessment year in excess of Rs 10 lacs on a substantial and recurring question of law or fact which is confirmed in appeal or is pending before on appellate authority.
c) Cases involving addition in an earlier assessment year on the issue of transfer pricing in excess of Rs 10 Lakh or more.
d) Assessment in survey cases for the financial year in which survey was carried out. This criteria will not apply if all of the following conditions are fulfilled:
i. There are no impounded books or documents.
ii. There is no retraction of disclosure, if any, made during the survey.
iii. Declared income, excluding any disclosure made during the survey, is not less than the declared income of the preceding year.
e) Assessment in search & Seizure cases to be made under section 158B, 158BC, 158BD, 153A, 153C & 143(3) of the IT Act.
f) Assessment Initiated under section 147/148 of the IT Act.
g) Assessing officer may select any return for scrutiny after recording he reason and obtaining approval of the CCIT/DGIT. The cases under this category should be selected if, there are compelling reasons and the case is not selected through CASS. These cases should be watched by CCIT/CIT in respect of the quality of assessment.
(F.NO.225/93/2009/ITA.II)
1. Selection of cases for scrutiny during the financial year 2010-11 will be done primarily through CASS this year. Manual Selection for scrutiny this year will be limited only to a few cases listed below.
2. List of cases selected during each month in accordance with selection criteria mentioned below shall be submitted by the Assessing officers to their respective Range heads by the 15th of the following month and also displayed on the notice Board of their offices .
3. These guidelines are meant only for the use of officers of the Income Tax Department .These are not to be disclosed even if a request is made under Right to Information Act, In view of the decision of the Central Information Commission in the case of Shri Kamal Vs Director (ITA-II), CBDT (order no CIC/AT/2007/00617 dated 21.02.2008)
Selection criteria Applicable to all return at all stations
a) Value of International transaction as defined in 92B exceeds 15 Crore.
b) Cases involving addition in an earlier assessment year in excess of Rs 10 lacs on a substantial and recurring question of law or fact which is confirmed in appeal or is pending before on appellate authority.
c) Cases involving addition in an earlier assessment year on the issue of transfer pricing in excess of Rs 10 Lakh or more.
d) Assessment in survey cases for the financial year in which survey was carried out. This criteria will not apply if all of the following conditions are fulfilled:
i. There are no impounded books or documents.
ii. There is no retraction of disclosure, if any, made during the survey.
iii. Declared income, excluding any disclosure made during the survey, is not less than the declared income of the preceding year.
e) Assessment in search & Seizure cases to be made under section 158B, 158BC, 158BD, 153A, 153C & 143(3) of the IT Act.
f) Assessment Initiated under section 147/148 of the IT Act.
g) Assessing officer may select any return for scrutiny after recording he reason and obtaining approval of the CCIT/DGIT. The cases under this category should be selected if, there are compelling reasons and the case is not selected through CASS. These cases should be watched by CCIT/CIT in respect of the quality of assessment.
(F.NO.225/93/2009/ITA.II)
A breif note on IT scrutiny
A breif note on IT scrutiny
--------------------------------------------------------------------------------
The below mentioned article broadly covers all important aspects relating to scrutiny proceedings carried out u/s 143(2)/(3) of the Income Act 1961.
What is a scrutiny?
It is not possible to the Income Tax Department to make regular assessment of all the returns filed by assesses in any assessment year. So, based on norms fixed by the CBDT and with the help of CASS (Computer Assisted Scrutiny System) Income Tax department selects some returns for regular assessment (scrutiny assessment) u/s 143(3).
The scheme of comprehensive scrutiny is as follows-
v A return of income (or loss) has been made u/s 139 or in response to the notice under section 142(1)
v The Assessing officer considers it necessary or expedient to ensure that the assessee has not-
• Understated the income (or)
• Computed excessive loss (or)
• Not under-paid tax in any manner
v A notice shall be served on the assessee under section 143(2) (ii). The notice requires the assessee to produce any evidence which the assessee may rely in support of the return.
Time Limit for serving notice Applicability
Notice is to be served within 6 months from the end of the FY in which return is furnished
From April 1, 2008
Notice was to be served with in 12 months from the end of the month in which return was filed
Up to March 31, 2008
If the notice u/s 143(2) is served beyond the prescribed time limit, the said assessment is invalid in law and has to be quashed, even though the assessee had not challenged the same- (CIT V. Mahi Valley Hotels & Resorts).
v After hearing such evidence produced by the assessee in response to the notice given u/s 143(2) the Assessing officer shall pass an assessment order in writing determining-
· The total income or loss of the assessee and
· The sum payable by the assessee (or refund of any amount due to him) on the basis of such assessment order
Aspects of income tax scrutiny
Objective
The main objective of the IT officer during scrutiny is to make sure that the income shown in the return is real and there is no tax evasion. The expenses incurred are also scrutinized to find out whether they were actually incurred and were not fictitious.
For this, the assessing officer generally calls for the following documents/information:
v Form 16 given by the employer and reason for deviations if any when compared with the details furnished in return of income.
v Details and proofs of rent paid during the year for which HRA has been claimed as exempt.
v Loan sanction letter and repayment schedule for the housing loans obtained, in cases where interest on housing loan and principal is claiming as a deduction.
v Details of additions to fixed assets with supporting bills/vouchers.
v Names and addresses of sundry debtors and sundry creditors for the amount exceeding a prescribed limit, for example Rs.1,00,000/- ( The limit may vary in case to case)
v Item wise break up and ledger extract copies of –
• Inventories (for manufacturing/trading concerns)
• Loans & Advances
v Investments made in immovable properties, FDRs, shares, debentures, bonds and sources of funds for making such investments by assessee and his family members.
v Summary of all the bank accounts and copies of the bank pass book/statement explaining each debit and credit.
v Details of secured loans obtained during the year with loan sanction letter from banks. In case, the facilities availed against the hypothecation, a copy of hypothecation document.
v Item wise break up and ledger extract copies of expenses as debited to P&L a/c-
• Sales
• Major expenditure like Power & Fuel
• Repairs & Maintenance
• Professional charges
• Interest
• Travelling expenses
• General expenses
v Ledger extract copies and item wise break up of
• Liabilities
• Provisions
• Other/miscellaneous expenses etc.
v Justification in regard to payments made u/s 43B
v Details of TDS made during the year and to justify payments made in provisions of sec 40(a) (ia) of the IT act.
v Nowadays most of the assessees are filing returns electronically, where it is not possible to furnish reports and other documents. So, at the time of scrutiny they may further ask to furnish-
• A copy of tax audit report along with annexure if any
• A copy of annual report pertaining to relevant AY under scrutiny
• Deductions claimed if any under chapter VI-A, a copy of the relevant receipts along with exemption certificates.
• A copy of computation sheet which shows the working of tax computed at normal rates and computed u/s 115JB of the IT Act.
v If the return contains capital gain income, the assessee may be asked to produce sale deed, documents supporting to cost of acquisition and supporting evidences relating to cost of development etc. and also the documents for claiming exemption if any.
v Details of debtors whose debts are written off as bad debts, documents relating to legal proceedings and steps taken against the debtors for collection.
v Details of all 12 months credit card statements and source of payment thereof.
v Details of loans accepted and given during the year especially friends and relatives, and also confirmation from borrowers along with their respective PANs.
v Details of gifts given and taken during the year along with gift deeds.
v Statement of expenditure debited to profit and loss account and covered for FBT and TDS as well as the compliance thereof.
v Reconciliation of income with TDS certificates.
Measures to be taken during assessment stage
Generally all the measures should be undertaken at the time of preparation of income tax return and presented before Assessing officer during scrutiny proceedings if called for. Few such measures are mentioned below-
v All the credits of income appearing in the bank statement/pass book must be matched with the income as shown in the return. A balance sheet should be prepared for each year which keeps a proper track of assets and incomes.
v Care should be taken that adequate withdrawals (cash or bank) are made for personal and household expenses. Generally an estimate can be made as to how much money a family would be requiring for household needs (based on the size of family and cost of living in the city) and compare it with withdrawals made by the assessee for the given purpose.
v Ensure that payment for the expenses charged on the credit cards is done through regular bank account.
v A proper record should be maintained of the investments made along with their sources and supporting documents. All unexplained investments would be added as income.
v Income of minor child should be included in the income of parent whose total income is higher, before including the income of minor child.
v If HRA exemption is claimed, then the proof of rent paid has to be furnished. Also ensure that if rent is paid to one’s parents or any relative and then ensure that the rent is shown in the return of income of the person receiving the rent.
v If any asset is purchased by spouse out of the money gifted by assessee then the income from such asset would be included in the income of assessee.
v One should generally not give interest-free loans when one has already borrowed money and is repaying that with interest. The most common disallowance/addition that is being made nowadays in the scrutiny assessment orders is the addition of notional interest on interest free loans given to someone. It has to be proved that the loans are genuine and reasons for giving interest-free loans are also genuine.
v Proper record should be maintained of the gifts received including gift deed, PAN and bank statement of donor.
With effect from April 1, 2006, gifts received in cash from non relatives in excess of Rs.50,000/- would be taxable as income of receiver. However, gifts from relatives and those received on occasion of marriage of individual are exempt irrespective of the limit.
From the AY 2010-2011, gifts received in kind are also liable for tax, so details of persons from whom gifts received in kind are also required to be maintained.
Time limit for completion of scrutiny
The scrutiny assessment must be completed within 21 months from the end of the relevant assessment year. For instance, the scrutiny for assessment year 2007-08 has to be completed by December 31, 2009.
Other important points relating to scrutiny
v The assessing officer may call for the information relating to the FY which is under scrutiny. However he cannot call for earlier year’s information.
v Maintenance of books of accounts is compulsory only in case of incomes received from business or profession or income from other sources.
v According to Sec 44AA specified professionals and others who satisfy conditions specified therein are required to maintain books of accounts. If these persons face scrutiny, they are supposed to produce books of accounts maintained by them at the time of scrutiny if required by assessing officer.
v The assessee is not permitted to produce any record or evidence before the Appellate Authority which was not produced before the assessing officer during the course of proceedings before him. Hence care should be taken that all the evidences are filed before the Assessing Officer only.
However the Appellate Authority may allow production of additional evidence by the assessee if the conditions specified in Rule 46A of Income Tax rules are satisfied.
Provisions Amended by Finance Act, 2008
The old procedure of processing of returns under section 143(1)(a) has come back with wider scope but without the sting of additional tax. From 01-04-2008 all returns have to be processed wherein arithmetical mistakes and incorrect claims apparent from the information in the return will be added back and intimation will be issued demanding the additional demand or refunding the excess taxes paid. Such intimation can be issued only within one year from the end of the financial year in which such return was filed. No intimation will be issued if no demand or refund is due. Provisions for making centralized processing of Returns were also made.
Incorrect claims is defined as-
· Inconsistency in figures in the entries in return
· Where evidence is required to be filed as per various provisions of the act, but not filed
· Where deduction exceeds the limits prescribed under various provisions of the act
No doubt, the scrutiny process causes hardship to the assessee as the main focus of the IT department is to recover as much tax as possible. But taking proper measures from the beginning it can mitigate the trouble.
--------------------------------------------------------------------------------
The below mentioned article broadly covers all important aspects relating to scrutiny proceedings carried out u/s 143(2)/(3) of the Income Act 1961.
What is a scrutiny?
It is not possible to the Income Tax Department to make regular assessment of all the returns filed by assesses in any assessment year. So, based on norms fixed by the CBDT and with the help of CASS (Computer Assisted Scrutiny System) Income Tax department selects some returns for regular assessment (scrutiny assessment) u/s 143(3).
The scheme of comprehensive scrutiny is as follows-
v A return of income (or loss) has been made u/s 139 or in response to the notice under section 142(1)
v The Assessing officer considers it necessary or expedient to ensure that the assessee has not-
• Understated the income (or)
• Computed excessive loss (or)
• Not under-paid tax in any manner
v A notice shall be served on the assessee under section 143(2) (ii). The notice requires the assessee to produce any evidence which the assessee may rely in support of the return.
Time Limit for serving notice Applicability
Notice is to be served within 6 months from the end of the FY in which return is furnished
From April 1, 2008
Notice was to be served with in 12 months from the end of the month in which return was filed
Up to March 31, 2008
If the notice u/s 143(2) is served beyond the prescribed time limit, the said assessment is invalid in law and has to be quashed, even though the assessee had not challenged the same- (CIT V. Mahi Valley Hotels & Resorts).
v After hearing such evidence produced by the assessee in response to the notice given u/s 143(2) the Assessing officer shall pass an assessment order in writing determining-
· The total income or loss of the assessee and
· The sum payable by the assessee (or refund of any amount due to him) on the basis of such assessment order
Aspects of income tax scrutiny
Objective
The main objective of the IT officer during scrutiny is to make sure that the income shown in the return is real and there is no tax evasion. The expenses incurred are also scrutinized to find out whether they were actually incurred and were not fictitious.
For this, the assessing officer generally calls for the following documents/information:
v Form 16 given by the employer and reason for deviations if any when compared with the details furnished in return of income.
v Details and proofs of rent paid during the year for which HRA has been claimed as exempt.
v Loan sanction letter and repayment schedule for the housing loans obtained, in cases where interest on housing loan and principal is claiming as a deduction.
v Details of additions to fixed assets with supporting bills/vouchers.
v Names and addresses of sundry debtors and sundry creditors for the amount exceeding a prescribed limit, for example Rs.1,00,000/- ( The limit may vary in case to case)
v Item wise break up and ledger extract copies of –
• Inventories (for manufacturing/trading concerns)
• Loans & Advances
v Investments made in immovable properties, FDRs, shares, debentures, bonds and sources of funds for making such investments by assessee and his family members.
v Summary of all the bank accounts and copies of the bank pass book/statement explaining each debit and credit.
v Details of secured loans obtained during the year with loan sanction letter from banks. In case, the facilities availed against the hypothecation, a copy of hypothecation document.
v Item wise break up and ledger extract copies of expenses as debited to P&L a/c-
• Sales
• Major expenditure like Power & Fuel
• Repairs & Maintenance
• Professional charges
• Interest
• Travelling expenses
• General expenses
v Ledger extract copies and item wise break up of
• Liabilities
• Provisions
• Other/miscellaneous expenses etc.
v Justification in regard to payments made u/s 43B
v Details of TDS made during the year and to justify payments made in provisions of sec 40(a) (ia) of the IT act.
v Nowadays most of the assessees are filing returns electronically, where it is not possible to furnish reports and other documents. So, at the time of scrutiny they may further ask to furnish-
• A copy of tax audit report along with annexure if any
• A copy of annual report pertaining to relevant AY under scrutiny
• Deductions claimed if any under chapter VI-A, a copy of the relevant receipts along with exemption certificates.
• A copy of computation sheet which shows the working of tax computed at normal rates and computed u/s 115JB of the IT Act.
v If the return contains capital gain income, the assessee may be asked to produce sale deed, documents supporting to cost of acquisition and supporting evidences relating to cost of development etc. and also the documents for claiming exemption if any.
v Details of debtors whose debts are written off as bad debts, documents relating to legal proceedings and steps taken against the debtors for collection.
v Details of all 12 months credit card statements and source of payment thereof.
v Details of loans accepted and given during the year especially friends and relatives, and also confirmation from borrowers along with their respective PANs.
v Details of gifts given and taken during the year along with gift deeds.
v Statement of expenditure debited to profit and loss account and covered for FBT and TDS as well as the compliance thereof.
v Reconciliation of income with TDS certificates.
Measures to be taken during assessment stage
Generally all the measures should be undertaken at the time of preparation of income tax return and presented before Assessing officer during scrutiny proceedings if called for. Few such measures are mentioned below-
v All the credits of income appearing in the bank statement/pass book must be matched with the income as shown in the return. A balance sheet should be prepared for each year which keeps a proper track of assets and incomes.
v Care should be taken that adequate withdrawals (cash or bank) are made for personal and household expenses. Generally an estimate can be made as to how much money a family would be requiring for household needs (based on the size of family and cost of living in the city) and compare it with withdrawals made by the assessee for the given purpose.
v Ensure that payment for the expenses charged on the credit cards is done through regular bank account.
v A proper record should be maintained of the investments made along with their sources and supporting documents. All unexplained investments would be added as income.
v Income of minor child should be included in the income of parent whose total income is higher, before including the income of minor child.
v If HRA exemption is claimed, then the proof of rent paid has to be furnished. Also ensure that if rent is paid to one’s parents or any relative and then ensure that the rent is shown in the return of income of the person receiving the rent.
v If any asset is purchased by spouse out of the money gifted by assessee then the income from such asset would be included in the income of assessee.
v One should generally not give interest-free loans when one has already borrowed money and is repaying that with interest. The most common disallowance/addition that is being made nowadays in the scrutiny assessment orders is the addition of notional interest on interest free loans given to someone. It has to be proved that the loans are genuine and reasons for giving interest-free loans are also genuine.
v Proper record should be maintained of the gifts received including gift deed, PAN and bank statement of donor.
With effect from April 1, 2006, gifts received in cash from non relatives in excess of Rs.50,000/- would be taxable as income of receiver. However, gifts from relatives and those received on occasion of marriage of individual are exempt irrespective of the limit.
From the AY 2010-2011, gifts received in kind are also liable for tax, so details of persons from whom gifts received in kind are also required to be maintained.
Time limit for completion of scrutiny
The scrutiny assessment must be completed within 21 months from the end of the relevant assessment year. For instance, the scrutiny for assessment year 2007-08 has to be completed by December 31, 2009.
Other important points relating to scrutiny
v The assessing officer may call for the information relating to the FY which is under scrutiny. However he cannot call for earlier year’s information.
v Maintenance of books of accounts is compulsory only in case of incomes received from business or profession or income from other sources.
v According to Sec 44AA specified professionals and others who satisfy conditions specified therein are required to maintain books of accounts. If these persons face scrutiny, they are supposed to produce books of accounts maintained by them at the time of scrutiny if required by assessing officer.
v The assessee is not permitted to produce any record or evidence before the Appellate Authority which was not produced before the assessing officer during the course of proceedings before him. Hence care should be taken that all the evidences are filed before the Assessing Officer only.
However the Appellate Authority may allow production of additional evidence by the assessee if the conditions specified in Rule 46A of Income Tax rules are satisfied.
Provisions Amended by Finance Act, 2008
The old procedure of processing of returns under section 143(1)(a) has come back with wider scope but without the sting of additional tax. From 01-04-2008 all returns have to be processed wherein arithmetical mistakes and incorrect claims apparent from the information in the return will be added back and intimation will be issued demanding the additional demand or refunding the excess taxes paid. Such intimation can be issued only within one year from the end of the financial year in which such return was filed. No intimation will be issued if no demand or refund is due. Provisions for making centralized processing of Returns were also made.
Incorrect claims is defined as-
· Inconsistency in figures in the entries in return
· Where evidence is required to be filed as per various provisions of the act, but not filed
· Where deduction exceeds the limits prescribed under various provisions of the act
No doubt, the scrutiny process causes hardship to the assessee as the main focus of the IT department is to recover as much tax as possible. But taking proper measures from the beginning it can mitigate the trouble.
Wednesday, April 7, 2010
TDS Rate Applicability : Frequently Asked Questions
What is the date when the Finance Bill became Finance Act 2009 ?
•19-08-2009
In which cases surcharge on TDS rates is NOT applicable ?
•On all payment to residents
•On all payment to non-corporate non-residents
•On all payments to foreign corporate if total payment is less than 1 Crore
In which cases surcharge on TDS rates is applicable ?
•On all payments to foreign corporate if total payment is more than 1 Crore
In which cases Education Cess, Secondary and Higher Education Cess is NOT applicable ?
•On all payments to residents except salaries payment
In which cases Education Cess, Secondary and Higher Education Cess is applicable ?
•On salaries
•On all payment to non-residents and foreign companies
What is the effective date for above changes in applicability of surcharge and education cess?
•These changes are applicable on the passing of Finance Bill . This date is 19-08-2009. However there are different views on applicability date. One view is that since these changes are for the full financial year, one can take benefit of Section 294 of the income tax Act and start applying this rate from the date of presentation of finance bill.(in my view its applicable from 01.04.2009 , same view is given in The Chartered Accountant Journal released by ICAI)
There has been change in TDS Rates for 94C- Contractual Payments and 94I- rental payments. What is the effective date for the same ?
•These changes are applicable from 01-10-2009.
Apart from the above , is there any other change in the TDS Rates ?
•Yes. The maximum rate of TDS is normalised to 10% in most cases. Please refer to the TDS Rate Chart for FY 2009-10
What about penal rate of 20% where valid PAN is not given ?
•This provision is applicable from 01-04-2010. Till such time even if valid PAN is not given , normal rate will be applied.
What is your source of above information.
•Applicability of surcharge is mentioned in Clause (5), (6), (7) and (8) in Chapter II of the Finance ( No 2) Act , 2009.
•Applicability of Education Cess : Clause (11). Applicability of Secondary and Higher Education Cess : Clause (12).
What are the changes about section 194C about Job work (work according to specification)
•the detailed reply to this question is available hereTDS ON JOB WORK U/S 194C AMENDED FROM 01.10.2009
•19-08-2009
In which cases surcharge on TDS rates is NOT applicable ?
•On all payment to residents
•On all payment to non-corporate non-residents
•On all payments to foreign corporate if total payment is less than 1 Crore
In which cases surcharge on TDS rates is applicable ?
•On all payments to foreign corporate if total payment is more than 1 Crore
In which cases Education Cess, Secondary and Higher Education Cess is NOT applicable ?
•On all payments to residents except salaries payment
In which cases Education Cess, Secondary and Higher Education Cess is applicable ?
•On salaries
•On all payment to non-residents and foreign companies
What is the effective date for above changes in applicability of surcharge and education cess?
•These changes are applicable on the passing of Finance Bill . This date is 19-08-2009. However there are different views on applicability date. One view is that since these changes are for the full financial year, one can take benefit of Section 294 of the income tax Act and start applying this rate from the date of presentation of finance bill.(in my view its applicable from 01.04.2009 , same view is given in The Chartered Accountant Journal released by ICAI)
There has been change in TDS Rates for 94C- Contractual Payments and 94I- rental payments. What is the effective date for the same ?
•These changes are applicable from 01-10-2009.
Apart from the above , is there any other change in the TDS Rates ?
•Yes. The maximum rate of TDS is normalised to 10% in most cases. Please refer to the TDS Rate Chart for FY 2009-10
What about penal rate of 20% where valid PAN is not given ?
•This provision is applicable from 01-04-2010. Till such time even if valid PAN is not given , normal rate will be applied.
What is your source of above information.
•Applicability of surcharge is mentioned in Clause (5), (6), (7) and (8) in Chapter II of the Finance ( No 2) Act , 2009.
•Applicability of Education Cess : Clause (11). Applicability of Secondary and Higher Education Cess : Clause (12).
What are the changes about section 194C about Job work (work according to specification)
•the detailed reply to this question is available hereTDS ON JOB WORK U/S 194C AMENDED FROM 01.10.2009
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