CPC (TDS)
reminder to Banks for raising Flag "B" in TDS Quarterly Statements
for 15G/H Forms
Communication
dated 22nd March, 2014
Centralized Processing Cell (TDS)
has observed from its records that Flag "B" is not being raised for
15G/H Forms in quarterly TDS Statements filed.
The prevalent practice is to raise
the flag only in the TDS Statements filed in the last quarter of the
Financial Year, however, such transactions must be reported within the
relevant quarter. Please note that the obligation to report each
transaction in the relevant quarter, where tax has not been deducted on the
basis of 15G/ H Forms, falls on the deductor and non-compliance amounts to
incorrect verification of completeness of TDS statement.
Your attention is, therefore,
invited to the following:
What is
Form 15G/ H and its relevance:
·
Under section 197A of the Income Tax
Act 1961, Form 15G/ H is a self-declaration, which is provided by a
person resident in India (not being a Company or Firm) to their deductor that
the tax on his estimated total income of the previous year, in which
such income is to be included in computing his total income, will be NIL.
The Declaration in writing should be collected
by the deductor in Duplicate.
by the deductor in Duplicate.
·
The Declaration can be made in the
following Forms:
- Form 15H - For Senior Citizens
- Form 15G - For Other than Senior Citizens
·
Such declaration under section 197A
can be made only for tax deductions under section 192, 193, 194, 194A, 194C,
194D, 194G, 194H, 194I, 194J, 194K, 194LA and 195.
How to
show Forms 15G/ H details in TDS statements:
·
If the deductee provides Forms 15G
or 15H to their deductor, then deductor is not liable to deduct tax at the time
of payment/ credits and needs to raise Flag "B" in the column "Reason
for non-deduction/ lower deduction" while preparing the TDS Statement
using version 3.8 of the Return Preparation Utility (RPU). (Column
326 in case of Form 24Q and 424 in case of Form 26Q).
·
The person responsible for paying
any income of the nature shall deliver or cause to be delivered to the Chief
Commissioner or Commissioner, a copy of the declaration, on or before the
seventh day of the month next following the month in which the declaration is
furnished to him.
Consequences,
if deductor does not raise Flag "B":
·
If the
deductor does not raise Flag "B" in case of non-deduction, the rate
of tax as per the relevant section under the Act will become applicable and a
Short Deduction default will be raised.
Your attention is invited to provisions of section 201 of the Act, which reads
as follows:
·
Where any person who is required to
deduct any sum, does not deduct or does not Pay or after deduction, fails to
pay, the whole or any part of the tax, then such person shall be deemed to be
an assessee in default in respect of such tax and liable to pay simple
interest.
·
Such
person shall be required to pay interest on account of Short deduction and Late
deduction at the rate of 1% and 1.5% respectively of the tax amount.
It is therefore, suggested to take
appropriate action with respect to the above while filing TDS statements.
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