Communication
Number 19, dated 04th February, 2014
CPC (TDS)
Advisory Communication regarding Certificate u/s 197/197A for Lower or No
Deduction of Tax
CPC (TDS) team feels glad to
constantly update our stakeholders with relevant advisory communications from
time to time. This communication seeks to provide important information related
to a Certificate issued for Deduction of Tax at Lower/ NIL Rates under section
197/197A of the Income Tax Act, 1961.
About
Certificate u/s 197/ 197A:
Assessing
Officer can issue a certificate for lower or no deduction of tax:
·
To the deductee, if is a resident or
·
To the deductor, where the deductee
is a non-resident
·
If the Assessing Officer is
satisfied that the total income of the deductee justifies deduction of tax at a
lower or nil rate.
Accordingly, the clause provides
that the deduction shall be made in accordance with the certificate, until such
certificate is cancelled by the Assessing Officer or the expiry of the validity
of the certificate, whichever is earlier.
Actions to
be taken on receipt of the certificate:
·
Please validate the PAN of the
deductee submitting the certificate.
·
The Certificate should be valid for
the PAN, Section and Rate which has been mentioned in the statement filed.
·
Check that the certificate is valid
for the relevant Financial Year.
·
Verify that the threshold limit for
the certificate has not been exceeded in previous quarters.
·
Correct certificate number should be
quoted in the statement. Example of Correct Certificate Number - 2XXXAH7XXE.
·
Raise the Flag "A" in the
statement for a certificate u/s 197 and Flag "B" for certificate u/s
197A.
·
Please ensure that the Certificate Number
is mentioned in the Deductee detail of the statement. (For F.Y.2013-14
Onwards).
·
If you are in receipt of a CPC (TDS)
Intimation u/s 200A/ 154 for Short Deduction, you are requested to download the
Justification report. The details of the Short Deduction due to an issue with
the 197/197A certificate can be checked under the TAB "Short Deduction due
to 197 Certificates". You may verify the details and correct in accordance
with the above guidelines.
·
If a Correction Statement is being
submitted, please ensure that the above has been taken care of for the Conso
File downloaded from TRACES. Please refer to our e-tutorial for any assistance with Conso
File.
Caution to
be exercised for the following:
·
Please ensure that Flag A/B is not
raised for any Invalid PAN.
·
Please do not raise Flag A/ B for a
PAN which does not have the above certificate.
·
Avoid mentioning Section code in the
"Certificate Number" field of the statement.
·
Expired certificates are not to be
used.
·
Please check that the threshold
limit has not been exceeded in the previous quarter.
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