SECTION 203 OF
THE INCOME-TAX ACT, 1961, READ WITH RULE 31 OF THE INCOME-TAX RULES, 1962 –
DEDUCTION AT SOURCE - CERTIFICATE FOR TAX DEDUCTED - ISSUANCE OF CERTIFICATE
FOR TAX DEDUCTED AT SOURCE IN FORM NO.16
CIRCULAR NO. 4/2013, [F.NO.275/34/2011-IT(B)], DATED
17-04-2013
1. Section 203 of
the Income-tax Act 1961 ("the Act") read with the Rule 31 of the
Income-tax Rules 1962 ("the Rules") stipulates furnishing of
certificate of tax deduction at source (TDS) by the deductor to the deductee
specifying therein the prescribed particulars such as amount of TDS, valid
permanent account number (PAN) of the deductee, tax deduction and collection
account number (TAN) of the deductor, etc. The relevant form for such TDS
certificate is Form No. 16 in case of deduction under section 192 and Form
No. 16A for deduction under any other provision of Chapter XVII-B of the
Act. TDS certificate in Form No. 16 is to be issued annually whereas TDS
certificate in Form No. 16A is to be issued quarterly. TDS Certificate in Form
No 16 as notified vide Notification No. 11/2013 dated 19-2-2013 has two
parts viz Part A and Part B (Annexure). Part A contains details of tax
deduction and deposit and Part B (Annexure) contains details of income.
2. With a view to
streamline the TDS procedures, including proper administration of the Act, the
Board had issued Circular No. 03/2011 dated 13-5-2011 and Circular No. 01/2012
dated 9-4-2012 making it mandatory for all deductors to issue TDS certificate
in Form No. 16A after generating and downloading the same from "TDS
Reconciliation Analysis and Correction Enabling System" or (Error!
Hyperlink reference not valid., previously called TIN website. In exercise of
powers under section 119 of the Act, the Board has now decided as following:-
2.1 ISSUE OF
PART A OF FORM NO. 16 FOR DEDUCTION OF TAX AT SOURCE MADE ON OR AFTER 1-4-2012:
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 through TRACES Portal, in respect of all sums deducted
on or after the1st 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.
2.2
AUTHENTICATION OF TDS CERTIFICATE IN FORM NO. 16:
The deductor,
issuing the Part A of Form No. 16 by downloading it from the TRACES Portal, shall,
before issuing to the deductee authenticate the correctness of contents
mentioned therein and verify the same either by using manual signature or by
using digital signature in accordance with sub-rule (6) of Rule 31.
2.3 In other words,
Part A of Form No. 16 shall be issued by all the deductors, only by generating
it through TRACES Portal and after duly authenticating and verifying it.
2.4 '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 stated above.
2.5 Sub rule (3) of
rule 31of the Rules sets the time limit for issuance of Form 16 by the deductor
to the employee. Currently, Form 16 should be issued by 31st May of the
financial Year immediately following the financial year in which income was
paid and tax deducted.
3.1 The Director
General of Income-tax (Systems) shall specify the procedure, formats and standards
for the purpose of download of Part A of Form No. 16 from the TRACES Portal and
shall be responsible for the day-to-day administration in relation to the
procedure, formats and standards for download of Part A of Form No. 16 in
electronic form.
3.2 It is further
clarified that Part A of Form No. 16 issued by the deductors in accordance with
this circular and as per the procedure, formats and standards specified by the
Director General of Income-tax (Systems) and containing Unique Identification
Number shall only be treated as a valid compliance to the issue of Part A of
Form No. 16 for the purpose of section 203 of the Act read with rule 31 of the
Rules.
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