Communication
dated 17th May, 2014
CPC (TDS) Communication: Flag raised for 15G/H despite
Income exceeding the amount of Exemption
CPC (TDS) feels glad to provide you
with the new feature of downloading Form 27D, the Tax Collection
Certificate for Deductees forming part of TCS Statements, filed in the form
of 27EQ.
Centralized Processing Cell (TDS)
has observed from its records that Flag "B" (for 15G/H Forms)
has been wrongly raised in the quarterly TDS Statements as per the
provisions of Section 197A(1B) of the Income Tax Act, 1961. Following are
the provisions of section 197A(1B) for your ready reference:
"The provisions of this section shall not apply
where the amount of any income of the nature referred to in sub-section
(1) or sub-section (1A), as the case may be, or the aggregate of the amounts
of such incomes credited or paid or likely to be credited or paid during the
previous year in which such income is to be included exceeds the maximum
amount which is not chargeable to income-tax".
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 is made in the
following Forms:
Form 15H - For Senior Citizens
Form 15G - For other than Senior Citizens
Consequences,
if deductor wrongly raises Flag "B" for Forms 15G/H:
If the deductor raises Flag
"B" for non-deduction of tax, despite the total payments made by him
exceeding the taxable amount, this results into incorrect reporting
in the TDS Statements.
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.
Under Section 277 of the Act, if a
person makes a statement in any verification under this Act or under any
rule made thereunder, or delivers an account or statement which is false,
and which he either knows or believes to be false, or does not believe to be
true is punishable.
This may be noted that obligation
to report each transaction correctly in the TDS statements, falls on the
deductor and non-compliance amounts to incorrect verification of
correctness of TDS statement.
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