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Tax Deducted

at Source (TDS)

Submitted to: - Submitted by:-


Prof. Amit Mandle Chaitany Joshi
Computer Dept. M.B.E final
I owe a great many thanks to a great many people who helped and
supported me during the writing of this project.

My deepest thanks to Lecturer, Prof. Amit Mandle the Guide of


the project for guiding and correcting various documents of mine
with attention and care.
I would also thank my Institution and my faculty members
without whom this project would have been a distant reality. I also
extend my heartfelt thanks to my family and well wishers.

Chaitany Joshi
M.B.E Final
Overview............................................4
What is TDS.......................................5
TDS rate.............................................5
Salaries...............................................6
TDS certificate...................................8
Annual returns section 206...............10
Tax Deducted Account No.................11
How to deposit TDS..........................12
TDS exemption..................................13
Special cases.......................................14
New Changes in TDS.........................16
Income Tax Rules...............................17
Amendments.......................................18
Bibliography........................................28
Tax Deducted at Source
Tax Deducted at Source or best known as TDS is one of the modes of collecting Income-
tax from the assessees in India. This is governed under Indian Income Tax Act, 1961,
by the Central Board for Direct Taxes (CBDT) and is part of the Department of
Revenue managed by Indian Revenue Service (IRS), Mini of Finance, Govt. of India.

Overview
In simple terms, TDS is the tax getting deducted from the person receiving the amount
(Employee/Deductee) by the person paying such amount (Employer/Deductor). This is applicable
for certain types of payments, as applicable under the Act.

In the process of TDS, deduction of tax is effected at the source when income arises or accrues.
Hence where any specified type of income arises or accrues to any one, the Income-tax Act
enjoins on the payer of such income to deduct a stipulated percentage of such income by way of
Income-tax and pay only the balance amount to the recipient of such income.

The tax so deducted at source by the payer, has to be deposited in the Government treasury to
the credit of Central Govt, within the specified time. The tax so deducted from the income of the
recipient is deemed to be payment of Income-tax by the recipient at the time of his assessment.

Income from several sources is subjected to tax deduction at source. Presently this concept of
TDS is also used as an instrument in enlarging the tax base. Some of such income subjected to
TDS is salary, interest, dividend, interest on securities, winnings from lottery, horse races,
commission and brokerage, rent, fees for professional and technical services, payments to non-
residents etc. It is always considered as an Advance tax which is paid to the government.

What is TDS?
In a simple language TDS stands for tax deducted at source. It is a tax that is deducted from the
earning of the employee by the employer in other words it is a tax that is deducted at source. It is
deducted as per the finance act of that year. TDS should not be confused with the income tax
return; TDS is a different tax than income tax . Tax deduction is useful to reduce the income
taxand provide tax relief. TDS is deposited in the government treasury and later on assigned to
central government. TDS came into existence because government wants to expand their tax
bracket in the country.

Lets have a look at some of the income that is subjected to tax deduction at source (TDS).

1. Income through the salary


2. Interest rate generated from nay mode
3. Rental charges
4. Insurance commission
5. Prize money from betting, lotteries and horse races
6. Commission on sale of lottery ticket
7. Income generated from the foreign countries
8. Fees for professional and technical services

Latest TDS (tax deducted at source) rate � 2010 -2011

co-operative
HUF
Threshold society/Local
Payment source (rate
in Rs. authority/company firm
in %)
(rate in %)

Winning from lotteries 10000 30 30


Winning from horse races 5000 30 30
Commission on insurance 20000 10 10
Rent or property 180000 10 10
Interest from bank 10000 10 10
Commission/brokerage 5000 10 10
Professional fees 30000 10 10

Scrap - 1 1
Toll plaza - 2 2
Mining /quarrying - 2 2

Interest on debenture and securities - 10 -

Withdrawal from NSS 2500 20 -

Payment to nonresident sportsmen - 10 -


Income from ling term capital gain - 20 -
Income by way of short term capital
- 15 -
gain
Fees for technical services payable by - 10 -
Government or an Indian concern in
Pursuance of an agreement made by
non- Resident with the government

TDS is not applicable if Pan is provided by the transporter. Surcharge and cess is not applicable
on TDS with effect from 1 April 2009 on any payment made by the resident.

Calculation of how to deduct correct TDS

• Salaries

1. Estimate the annual approximate salary.


A. As it�s an approximate deduction from the employee salary. Calculate
the exact taxable salary amount payable till current month of financial
year.
B. Calculate the approximate salary that will pay for next financial year.
2. For the correct calculation of TDS it needs to calculate any other mode of income
declared by the employee.
3. Deduct any loss declared by the employee such as loss of the house.
4. Declaration as per 80C, 80D, 80G etc.
5. Calculate the surcharge, income tax and cess on the net income of the
employee.
6. Deduct any type of rebate.
7. Calculate the total tax now deduct the TDS made till last month from it.
8. Divide the net TDS by �remaining number of months in the FY� including this
month.
9. Deduct this month from employee salary.

• Non salaries
1. In this check that no payment should be paid to government, reserve bank or
mutual fund.
2. It is always preferable to calculate the threshold.
3. Deduct the amount as per the declaration 197A for non deduction of TDS.
4. Check that employee has not submitted a certificate by Assessing officer under
section 197 for non-deduction of TDS or deduction at a lower rate.
5. If you want to get effective TDS rates you need to include surcharge and cess.

Wrong or non calculation of TDS


1. Any payment that is payable as interest, commission, rent or brokerage. It should be
added to the income tax to get the final tax structure.
2. Attract penalty that is applicable for the person who is not able to pay the amount of tax
on time.

Interest earned from securities, horse racing, insurance commission and lottery prizes are
applicable for the TDS. Tax deduction is applicable for any kind of charity and if the person is
suffering from any kind of disability.

All people who want to pay TDS are required to apply for TAN (tax deduction and collection
account number)

TDS certificate
Section 192 � This certificate on form 16 is submitted by the payer with in one month prior to
next financial year.

Let�s have a look at the key sections:

• Section 192 � payment of salary or payment of wages.


• Section 193 � Payment of securities or payment of interest.
• Section 194 A � Interest other than securities.
• Section 194 B � Amount generated from lotteries or card game.
• Section 194 BB- Winning from horse race.
• Section 194C � Payment to contractor.
• Section 194 H � payment of commission or brokerage.
• Section 194 I � Payment of rent of plant and payment of machinery
• Section 194J- Payment of professional charges.

TDS implications on payment of commission or brokerage are like if a person who is responsible
for paying to a resident, and any income that comes in the form of commission or brokerage have
to deduct tax at source from there.

There are few charges that are exempted from tax at source (TDS)

The discount that is avail by the stamp vendor should not be confused with TDS as per section
194H, in the course of buying and selling of goods the discount comes does not come under the
provision of commission or brokerage the tax will be deducted at source.

Deduction of tax by airlines from its agent. In this tax will be deducted at source as per the section
194H. TDS will be deducted from the actual cost of theairline fare.

TDS is not applicable in RBI due to the turnover commission payable by the reserve bank of India
to the agency bank.

For PCO franchisee no deduction shall b e made by BSNL or MTNL.

• In case of transport contract if PAN is provided then there will not be any deduction for
TDS from 01/10/2009 to 31/03/2010.
• If PAN is not provided then TDS deduction would be 1 %.
• As per the new clause the charges for the rent paid, plant and machinery the TDS would
be 2% however for land, furniture and building it would be 10%.

Annual Returns to be filed - Section 206 read with Rule 37


S Form Due date of filing in the
Nature of payment Section
No No. next financial year
1. Payment of salary 24 Section 192 31st May
Interest on securities 25 Section 193 30th June
Section 194
Payment of dividend or income in respect
2. 26 Section 30th April
of Units u/s194K
194K
Section
3. Interest other than Interest on securities 26A 30th June
194A
Section
Winning from lotteries 26B 31st May
194B
Section
Winning from horse races 26BB -do-
194BB
Section
4. Payment to Contractors & Sub-Contractors 26C 30th June
194C
Section
5. Insurance Commission 26D -do-
194D
Insurance Commission paid/credited
6. 26E Section 206 Ommited w.e.f. 19.3.1997
without deduction of tax
Section
7. Payments from deposits under NSS 26F 30th June
194EE
Payments on account of repurchase of Section
8. 26G -do-
Units 194F
Payments regarding Commission on sale of Section 194
9. 26H -do-
lottery tickets G
Section
11. Payment of rent 26J -do-
194I
Payment of Professional fees or technical Section
12. 26K -do-
fees 194J

TAN (Tax Deduction Account Number)


Tax Deduction and Collection Account Number or TAN is a 10 digit alpha-numeric number
which is compulsory to be obtained by all persons who are accountable for Tax Deduction at
Source (TDS) and Tax Collection at Source (TCS) on behalf of the Income Tax Department. The
persons who deduct or collect tax at source on behalf of the Income Tax Department are required
to apply for and obtain TAN. If a person responsible for TDS/TCS fails to apply for TAN or does
not comply with the provisions of the Act, he may have to pay a penalty of Rs. 10,000/-.

The Income Tax Act makes it mandatory for all persons responsible for TDS/TCS to quote TAN in
all the TDS/TCS returns, all TDS/TCS payment challans and all TDS/TCS certificates to be
issued. TDS/TCS returns, whether filed in paper or electronic format, will not be received by the
authority if TAN is not quoted. Also, banks will not accept any TDS/TCS challans on which TAN is
not quoted.

A person should have only one TAN. It is illegal for a person to have multiple TANs. If a person
has received a duplicate TAN by mistake or otherwise, the same must be surrendered for
cancellation. No separate TAN is required for TDS or TCS. The same TAN needs to be
mentioned in all returns and challans, whether related to TDS or TCS. However, in case of
companies or banks, if the company/bank has more than one branch, then each branch or the
person responsible for that branch must separately apply for TAN.

Application for TAN

In order to apply for a TAN or to get the details on the existing TAN changed or corrected, you
are required to make an application in the requisite form. You cannot apply for a TAN on plain
paper. Application for new TAN is to be made in Form 49B and submitted to any of the Tax
Information Network Facilitation Centres (TIN-FCs) managed by the National Securities
Depository Ltd (NSDL). TIN-FC addresses are available at www.incometaxindia.gov.in or
http://tin.nsdl.com. The application can also be made online through http://tin.nsdl.com. Generally,
no documents are needed to be submitted with TAN application, but in case of online application,
the acknowledgement generated must be forwarded to the NSDL. The processing fee for TAN is
Rs. 50/- + service tax, as applicable. This fee needs to be paid at the time of submitting the Form.

The applications are digitized by NSDL and are then forwarded to the Income Tax Department.
The Income Tax Department will process the TANapplication and will issue the TAN that will be
intimated online to NSDL. On the basis of receipt of the TAN from Income Tax Department, the
NSDL will issue TAN letters to the applicant. The new TAN letter would come to the person at the
address indicated in the Form or would be given against the acknowledgement in case of online
application. NSDL will intimate the TAN to the person and he would be required to mention the
TAN on all futurecorrespondence relating to TDS/TCS.

How to Deposit In TDS


Challan in which payment is to be made to Govt. Account

Sr. Challan No Nature of payment


No
Where tax is deducted
1. Challan No 9-ITNS 191
from salaries
Where tax is deducted at
Challan No 8-ITNS 39/
source (other than salaries)
2. ITNS
onpayment made to persons
271(Computerised)
other than Companies.
Challan No 2-ITNS Where tax is deducted at
3. 39A/ ITNS source from payments made
269(Computerised) to Companies.

Important points to be kept in mind while filling the Challan:


In case of TDS pertaining to item other than salaries, the deductor must indicate the nature
of payment by ticking the relevant item. Two counterfoils will be returned by the bank- 4th
counterfoil is required to be attached with the return of income and 3rd counterfoil is required to
be retained by the deductor for his record as indicated on the top of the challan.

Exemption From TDS India


Circumstances in which tax is not to be deducted at source or is to be deducted at a lower rate :

Form No in Certificate to be
which issued by the
S.No Type of Income Period of validity
application Assessing
to be made Officer
Form No 15AA Valid for the period
(see rule 28AA). specified in
Form No 13 The certificate is the certificate (see
1. Salary (sec192) (see rule issued to the Rule 28AA) Fresh
28) deductor under application required
advice to the after expiry of
applicant validity period.
Interest on securities
2. -do- -do- -do-
(Section 193)
Interest other than
3. interest on Securities -do- -do- -do-
(Section 194A)
Insurance
4. Commission (Section -do- -do- -do-
194D)
Rental Income
5. -do- -do- -do-
(Section 194I)
Income in respect of
6. -do- -do- -do-
Units (Section 194K)
Payment to non-
7. residents (Section -do- -do- -do-
195)
8. Payment Form No prescribed For the relevant
form.
to Contractors or No.13C Thecertificate can
Sub-Contractors (Se (See Rule be issued by the FY.
ction (194) 28) Assessing Officer
on a plain paper
Form No
13D
Commission on sale (applies to
9. of lottery tickets(sec lottery -do- -do-
194G) agents and
not prize
winners)
Payment of fees for
professional or Form No
10. -do- -do-
technical services 13E
(sec 194J)
Payment to non-
Form No For the FY
resident banking
11. 15C (see Form No 15E specified in
company (sec
rule 29B) thecertificate
195(3))
Payment to non-
resident company
carrying on business Form No
12. or profession in India 15D (see -do- For the relevant FY
through a branch rule 29B)
(not being interest or
dividend)-sec 195(3)

Types of income/payment where the above benefit is not available under the Act:

1. Winning from Lottery or Crossword puzzles Section 194B


2. Winning from horse race Section 194BB
3. Payments to non-resident Sportsmen or Association Section 194E
4. Payments in respect of NSS deposits Section 194EE
5. Payments on account of repurchase of units issued by Mutual funds Section 194F
6. Income in respect of units of non-residents, Off-shore Funds;foreign currency bonds;
(FIIs) Section 196A,196B, 196C & 196D

TDS Exemption For Individuals

The Act , vide Sec 197A, for the convenience of an individual payee, allows the benefit of non-
deduction of tax at source on filing of declaration in the prescribed form with the payer. The
details are given below (Sec 197A read with Rule 29C. Also see Circular No.351 dated 26.11.82)
Types of Prescribed form Payee who can
S.No Period of validity
Income (in duplicate) filedeclaration
Form No 15F
in duplicate. One
copy to be sent by
Interest on the Payer to Chief By an individual Declaration valid
1. securities Commissioner/ resident in for one previous
Section 193 Commissioner India. year.
within seven days
of the succeeding
month.
Interest other
than interest Any payee other
2. on securities Form No.15H -do- than Company or -do-
- Section firm.
194A.
Payment of
NSS deposit Any individual
3. Form No.15I -do- -do-
– section resident in India
194EE
Income in
Any payee other
respect of
4. Form No 15H -do- than a company -do-
Units Sec
or a firm
194K

Certificate Of Deduction In India

1. Salary (sec 192) :

Form No.16 (Rule 31 (1)(a). The certificate should be issued by the deductor within one
month of the close of the financial year in which deduction is made.

2. In all other cases :

Form No 16A (Rule 31(1)(b)).

1. General time limit for issuing certificates in all other cases is within one month
from the end of the month during which the credit is given or sum paid.
2. Rule 31(3), first proviso, gives further option to the payer to
issue certificate within one week after the expiry of two months from the month in
which income is credited. This option is available where the amount is credited to
the account of the payee on the last day of the accounting period of the payer.
This option is available in respect of payments except sec 192-salary, 194B-
winning from lotteries, 194BB-winning fromhorse races, 194EE-payments from
NSS deposits, 194F-payments in respect of repurchase of units, 194K-income in
respect of units.
3. Where payment in respect of TDS is permitted quarterly under rule 30(1) i.e.
income from interest, insurance commission, the certificate is to be issued within
14 days of the payment of Income Tax
Note : Where more than one certificate is required to be furnished to the payee during the
financial year, then on the request of the payee, one consolidated certificate may be
issued within one month from the end of such financial year vide new proviso to Rule 30
inserted vide notification dated 2.7.1996

Deduction of Tax at Source in the case of Non-


Residents and No Objection Certificate for Foreign
Remittance (Sec. 195):
1. Any person responsible for paying to a non-resident, not being a company, or to a foreign
company, any interest (not being interest on securities) or any other sum chargeable
under the provisions of this Act (not being income chargeable under the head ''Salaries'' )
shall, at the time of credit of such income to the account of the payee or at the time
of payment thereof in cash or by the issue of a cheque or draft or by any other mode,
whichever is earlier, deduct income-tax thereon at the rates in force:
Provided that in the case of interest payable by the Government or a public sector bank
within the meaning of clause (23D) of section 10 or a public financial institution within the
meaning of that clause, deduction of tax shall be made only at the time
of payment thereof in cash or by the issue of a cheque or draft or by any other mode.
2. Where the person responsible for paying any such sum chargeable under this Act (other
than interest on securities and salary) to a non-resident considers that the whole of such
sum would not be income chargeable in the case of the recipient, he may make an
application to the Assessing Officer to determine, by general or special order, the
appropriate proportion of such sum so chargeable, and upon such determination, tax
shall be deducted under sub-section (1) only on that proportion of the sum which is so
chargeable.
3. Subject to rules made under sub-section (5) of Sec.195 , any person entitled to receive
any interest or other sum on which income-tax has to be deducted under sub-section (1)
may made an application in the prescribed form to the Assessing Officer for the grand of
a certificate authorising him to receive such interest or other sum without deduction of tax
under that sub-section, and where any such certificate is granted, every person
responsible for paying such interest or other sum to the person to whom
such certificate is granted shall, so long as the certificate is in force, makepayment of
such interest or other sum without deducting tax thereon under sub-section (1).
4. A certificate granted under sub-section (3) of Sec.195 shall remain in force till the expiry
of the period specified therein or, if it is cancelled by the Assessing Officer before the
expiry of such period, till such cancellation.

Special Cases in TDS


1. Return regarding deduction of tax from non-residents Rule 37A:
Returns in respect of T.D.S. under Section 193, 194, 194E, 195,196A,196B,196C & 196D
from any payment made to a non resident or to a resident but not ordinarily resident
assessee (not being a company) or from any company which is neither a Indian
Company nor a company which has made the prescribed arrangement for the declaration
of and payment of dividend within India have to be filed within14 days from the end of the
quarter in Form No 27 to the designated officer as per Rule 36 A.

However, where T.D.S. is pertaining to interest on securities under Sec.193,


or payment to non-resident sportsmen or sports associations under Sec.194E, or of
interest or any other sum referred to in Sec.195, or income from units of UTI to a non
resident Indian or a non resident HUF where the assets were acquired out of funds from
a NR(E) account or by remittance of foreign currency as referred to in Section 196A(2) ,
or income from units referred to in section 196B, or income from foreign currency bonds
or shares of an Indian Company referred to in Section 196C at the income of FIIs from
securities referred in Section 196D then the return is to be filed in Form No. 27 within 14
days after the expiry of two months from the month in which the income was so credited.

2. Return of deduction of tax from contribution paid by Trustees of approved


Superannuation Fund-Rule 33:

Return to be filed in Form No 22 within 2 months from the end of the financial year.

New Changes in TDS Rules – CBDT Press


Release Dt.2-6-2010
The Central Board of Direct Taxes (CBDT) have amended the Rules relating to TDS
provisions date and mode of payment of tax deducted at source (TDS),
TDScertificate and filing of ‘statement of TDS’ (TDS return) vide Notification No.
41/2010; SO No. 1261(E) dated 31.05.2010. The amended rules will apply only in
respect of tax deducted on or after 1st day of April 2010.

Forms for TDS certificate have been revised to include the receipt number of the
TDS return filed by the deductor. Now the Tax-deduction Account Number (TAN) of
the deductor, Permanent Account Number (PAN) of the deductee, and Receipt
number of TDS return filed by the deductor will form the unique identification for
allowing tax credit claimed by the taxpayer in his income-tax return.
Government Authorities (Pay and Accounts Officer or Treasury Officer or Cheque
Drawing and Disbursing Officer) responsible for crediting tax deducted at source to
the credit of the Central Government by book-entry are now required to
electronically file a monthly statement in a new Form No. 24G containing details of
credit of TDS to the agency authorised by the Director General of Income-tax
(Systems).
Due date for furnishing TDS return for the last quarter of the financial year has been
modified to 15th May (from earlier 15th June). The revised due dates for furnishing
TDS returns are

Sl. No. Date of ending of the quarter of Due date


the financial year
1. 30th June 15th July of the financial year
2. 30th September 15th October of the financial year
3. 31st December 15th January of the financial year
4. 31st March 15th May of the financial year immediately
following the financial year in which deduction
is made

Due date for furnishing TDS certificate to the employee or deductee or payee is
revised as under :
Sl. No. Category Periodicity Due date
offurnishing
TDScertificate
1. Salary (Form Annual By 31st day of May of the financial year
No.16) immediately following the financial year in
which the income was paid and tax
deducted
2. Non-Salary Quarterly Within fifteen days from the due date for
(Form No.16A) furnishing the ‘statement of TDS’

Income-tax (Sixth Amendment) Rules, 2010 –


TDS Rules Amended for A.Y. 2011-12
Income-tax (Sixth Amendment) Rules, 2010 – Substitution of rules 30, 31, 31A,
31AA, 37CA and 37D; Form Nos. 16, 16A and 27D; insertion of Form No. 24G and
omission of rule 37A.

Notification No. 41/2010 [F.No. 142/27/2009-SO(TPL)], dated 31-5-2010.


S.O. 1261(E).- In exercise of the powers conferred by section 295 of the Income-tax
Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the
following rules further to amend the Income-tax Rules, 1962, namely:-

1. (1) These rules may be called the Income-tax (6th Amendment) Rules, 2010.

(2) They shall come into force on the 1st day of April, 2010.

2. In the Income-tax Rules, 1962, -

(a) for rules 30, 31, 31A and 31 AA the following rules shall be substituted, namely:-

“Time and mode of payment to Government account of tax deducted at


source or tax paid under sub-section (1A) of section 192.
30.
(1) All sums deducted in accordance with the provisions of Chapter XVII-B by an
office of the Government shall be paid to the credit of the Central Government -

(a) on the same day where the tax is paid without production of an income-
taxchallan; and
(b) on or before seven days from the end of the month in which the deduction is
made or income-tax is due under sub-section (1A) of section 192, where tax is paid
accompanied by an income-tax challan.
(2) All sums deducted in accordance with the provisions of Chapter XVII-B by
deductors other than an office of the Government shall be paid to the credit of the
Central Government -

(a) on or before 30th day of April where the income or amount is credited or paid in
the month of March; and
(b) in any other case, on or before seven days from the end of the month in which-

(i) the deduction is made; or

(ii) income-tax is due under sub-section (1A) of section 192.


(3) Notwithstanding anything contained in sub-rule (2), in special cases, the
Assessing Officer may, with the prior approval of the Joint Commissioner, permit
quarterly payment of the tax deducted under section 192 or section 194A or section
194D or section 194H for the quarters of the financial year specified to in column (2)
of the Table below by the date referred to in column (3) of the said Table:-
Table

Sl. No. Quarter of the Financial Year ended on Date for quarterly payment
(1) (2) (3)
1. 30th June 7th July
2. 30th September 7th October
3. 31st December 7th January
4. 31st March 30th April.
B.- Mode of payment
(4) In the case of an office of the Government, where tax has been paid to the credit
of the Central Government without the production of a challan, the Pay and Accounts
Officer or the Treasury Officer or the Cheque Drawing and Disbursing Officer or any
other person by whatever name called to whom the deductor reports the tax so
deducted and who is responsible for crediting such sum to the credit of the Central
Government, shall-

(a) submit a statement in Form No. 24G within ten days from the end of the
month to the agency authorised by the Director General of Income-tax (Systems) in
respect of tax deducted by the deductors and reported to him for that month; and

(b) intimate the number (hereinafter referred to as the Book Identification Number)
generated by the agency to each of the deductors in respect of whom the sum
deducted has been credited.
(5) For the purpose of sub-rule (4), the Director General of Income-tax (Systems)
shall specify the procedures, formats and standards for ensuring secure capture and
transmission of data, and shall also be responsible for the day-to-day administration
in relation to furnishing the information in the manner so specified.

(6) (i) Where tax has been deposited accompanied by an income-tax challan, the
amount of tax so deducted or collected shall be deposited to the credit of the Central
Government by remitting it within the time specified in clause (b) of sub-rule (1) or
in sub-rule (2) or in sub-rule (3) into any branch of the Reserve Bank of India or of
the State Bank of India or of any authorised bank;
(ii) Where tax is to be deposited in accordance with clause (i), by persons referred to
in sub-rule (1) of rule 125, the amount deducted shall be electronically remitted into
the Reserve Bank of India or the State Bank of India or any authorised bank
accompanied by an electronic income-tax challan.

(7) For the purpose of this rule, the amount shall be construed as electronically
remitted to the Reserve Bank of India or to the State Bank of India or to any
authorised bank, if the amount is remitted by way of-

(a) internet banking facility of the Reserve Bank of India or of the State Bank
of India or of any authorised bank; or
(b) debit card.
(8) Where tax is deducted before the 1st day of April, 2010, the provisions of this rule
shall apply as they stood immediately before their substitution by the Income-tax
( Amendment) Rules, 2010.
Certificate of tax deducted at source to be furnished under section 203.
31. (1) The certificate of deduction of tax at source by any person in accordance
with Chapter XVII-B or the certificate of payment of tax by the employer on behalf of
the employee under sub-section (1A) of section 192 shall be in-
(a) Form No. 16, if the deduction or payment of tax is under section 192; and
etaxindia.org

(b) Form No. 16A if the deduction is under any other provision of Chapter XVII-
B.

(2) The certificate referred to in sub-rule (1) shall specify:-

(a) valid permanent account number (PAN) of the deductee;


(b) valid tax deduction and collection account number (TAN) of the deductor;

(c) (i) book identification number or numbers where deposit of tax deducted is
without production of challan in case of an office of the Government;

(ii)challan identification number or numbers in case of payment through bank.

(d) (i) receipt number of the relevant quarterly statement of tax deducted at
source which is furnished in accordance with the provisions of rule 31A;

(ii) receipt numbers of all the relevant quarterly statements in case the statement
referred to in clause (i) is for tax deducted at source from income chargeable under
the head “Salaries”.
(3) The certificates in Forms specified in column (2) of the Table below shall be
furnished to the employee or the payee, as the case may be, as per the periodicity
specified in the corresponding entry in column (3) and by the time specified in the
corresponding entry in column (4) of the said Table:-

Table

Sl. No. Form No. Periodicity Due date


(1) (2) (3) (4)
1. 16 Annual By 31st day of May of the financial year immediately
following the financial year in which the income was
paid and tax deducted
2. 16A Quarterly Within fifteen days from the due date for furnishing
the statement of tax deducted at source under rule
31A.
(4) If an assessee is employed by more than one employer during the year, each of
the employers shall issue Part A of the certificate in Form No. 16 pertaining to the
period for which such assessee was employed with each of the employers and Part B
may be issued by each of the employers or the last employer at the option of the
assessee.

(5) The deductor may issue a duplicate certificate in Form No. 16 or Form No. 16A if
the deductee has lost the original certificate so issued and makes a request for
issuance of a duplicate certificate and such duplicate certificate is certified
asduplicate by the deductor.
(6) (i) Where a certificate is to be furnished in Form No. 16, the deductor may, at
his option, use digital signatures to authenticate such certificates.
(ii) In case of certificates issued under clause (i), the deductor shall ensure that-

(a) the provisions of sub-rule (2) are complied with;

(b) once the certificate is digitally signed, the contents of the certificates are not
amenable to change; and

(c) the certificates have a control number and a log of such certificates is
maintained by the deductor.

(7) Where a certificate is to be furnished for tax deducted before the 1st day of April,
2010, it shall be furnished in the Form in accordance with the provisions of the rules
as they stood immediately before their substitution by the Income-tax (
Amendment) Rules, 2010.
Explanation.- For the purpose of this rule and rule 37D, challan identification number
means the number comprising the Basic Statistical Returns
(BSR)

Code of the Bank


branch where the tax has been deposited, the date on which the tax has been
deposited and challan serial number given by the bank.
Statement of deduction of tax under sub-section (3) of section 200.31A. (1)
Every person responsible for deduction of tax under Chapter XVII-B, shall, in
accordance with the provisions of sub-section (3) of section 200, deliver, or cause to
be delivered, the following quarterly statements to the Director General of Income-
tax (Systems) or the person authorised by the Director General of Income-tax
(Systems), namely:-
(a) Statement of deduction of tax under section 192 in Form No. 24Q;

(b) Statement of deduction of tax under sections 193 to 196D in-

(i) Form No. 27Q in respect of the deductee who is a non-resident not
being a company or a foreign company or resident but not ordinarily resident; and

(ii) Form No. 26Q in respect of all other deductees.

(2) Statements referred to in sub-rule (1) for the quarter of the financial year
ending with the date specified in column (2) of the Table below shall be furnished by
the due date specified in the corresponding entry in column (3) of the said Table:-

Table

Sl. No. Date of ending of the quarter of the Due date


financial year
(1) (2) (3)
th
1. 30 June 15th July of the financial year
2. 30th September 15th October of the financial year
3. 31st December 15th January of the financial year
4. 31st March 15th May of the financial year immediately
following the financial year in which
deduction is made
(3) (i) The statements referred to in sub-rule (1) may be furnished in any of the
following manners, namely:-

(a) furnishing the statement in paper form;


(b) furnishing the statement electronically in accordance with the procedures,
formats and standards specified under sub-rule (5) alongwith the verification of the
statement in Form 27A.

(ii) Where,-

(a) the deductor is an office of the Government; or

(b) the deductor is the principal officer of a company; or

(c) the deductor is a person who is required to get his accounts audited
under section 44AB in the immediately preceding financial year; or

(d) the number of deductee’s records in a statement for any quarter of the
financial year are twenty or more,

the deductor shall furnish the statement in the manner specified in item (b) of
clause (i).

(iii) Where deductor is a person other than the person referred to in clause (ii), the
statements referred to in sub-rule (1) may, at his option, be delivered or cause to be
delivered in the manner specified in item (b) of clause (i).

(4) The deductor at the time of preparing statements of tax deducted shall,-

(i) quote his tax deduction and collection account number (TAN) in the
statement;

(ii) quote his permanent account number (PAN) in the statement except in the
case where the deductor is an office of the Government;

(iii) quote the permanent account number of all deductees;

(iv) furnish particulars of the tax paid to the Central Government including book
identification number or challan identification number, as the case may be.

(5) The Director General of Income-tax (Systems) shall specify the procedures,
formats and standards for the purposes of furnishing of the statements and shall be
responsible for the day to day administration in relation to furnishing of the
statements in the manner so specified.
(6) Where a statement of tax deducted at source is to be furnished for tax deducted
before the 1st day of April, 2010, the provisions of this rule and rule 37A shall apply
as they stood immediately before their substitution or omission by the Income-tax
( Amendment) Rules, 2010.
Statement of collection of tax under proviso to sub-section (3) of section
206C.
31AA. (1) Every collector, shall, in accordance with the provisions of the proviso to
sub-section (3) of section 206C, deliver, or cause to be delivered, to the Director
General of Income-tax (Systems) or the person authorised by the Director General of
Income-tax (Systems), a quarterly statement in Form No. 27EQ.
(2) Statements referred to in sub-rule (1) for the quarter of the financial year
ending with the date specified in column (2) of the Table below shall be furnished by
the due date specified in the corresponding entry in column (3) of the said Table:-

Sl. No. Quarter of the financial year ended Due date


(1) (2) (3)
1. 30th June 15th July of the financial year
2. 30th September 15th October of the financial year
3. 31st December 15th January of the financial year
4. 31st March 15th May of the financial year immediately
following the financial year in which
collection is made
(3) (i) The statement referred to in sub-rule (1) may be furnished in any of the
following manners, namely:-

(a) furnishing the statement in paper form;

(b) furnishing the statement electronically in accordance with the


procedures, formats and standards specified under sub-rule (5) alongwith the
verification of the statement in Form 27A.

(ii) Where,-

(a) The collector is an office of the Government; or

(b) The collector is the principal officer of a company; or

(c) The collector is a person who is required to get his accounts audited
under section 44AB in the immediately preceding financial year;
(d) The number of collectee’s records in a statement for any quarter of the
financial year are twenty or more,

The collector shall furnish the statement in the manner specified in item (b) of
clause (i).

(iv) Where the collector is a person other than the person referred to in clause (ii),
the statement referred to in sub-rule (1) may, at his option, be delivered or cause to
be delivered in the manner specified in item (b) of clause (i).

(4) The collector at the time of preparing statements of tax collected shall,-

(i) quote his tax deduction and collection account number (TAN) in the
statement;

(ii) quote his permanent account number (PAN) in the statement except in the
case where the collector is an office of the Government;

(iii) quote the permanent account number of all collectees;

(iv) furnish particulars of the tax paid to the Central Government including book
identification number or challan identification number, as the case may be.

(5) The Director General of Income-tax (Systems) shall specify the procedures,
formats and standards for the purposes of furnishing of the statements and shall be
responsible for the day to day administration in relation to furnishing of the
statements in the manner so specified.

(6) Where a statement of tax collected at source is to be furnished for tax collected
before the 1st day of April, 2010, the provisions of this rule shall apply as they stood
immediately before their substitution by the Income-tax ( Amendment) Rules,
2010. ”;
(b) rule 37A shall be omitted;

(c) for rules 37CA and 37D, the following rules shall be substituted, namely:-

“Time and mode of payment to Government account of tax collected at


source under section 206C.
37CA.(1) All sums collected in accordance with the provisions of sub-section (1) or
sub-section (1C) of section 206C by an office of the Government shall be paid to the
credit of the Central Government -
(a) on the same day where the tax is so paid without production of an income-tax
challan; and

(b) on or before seven days from the end of the month in which the collection is
made, where tax is paid accompanied by an income-tax challan.

(2) All sums collected in accordance with the provisions of sub-section (1) or sub-
section (1C) of section 206C by collectors other than an office of the Government
shall be paid to the credit of the Central Government within one week from the last
day of the month in which the collection is made.

(3) In the case of an office of the Government, where tax has been paid to the credit
of the Central Government without the production of a challan, the Pay and Accounts
Officer or the Treasury Officer or the Cheque Drawing and Disbursing Officer or any
other person by whatever name called to whom the collector reports the tax so
collected and who is responsible for crediting such sum to the credit of the Central
Government, shall-

(a) submit a statement in Form No. 24G within ten days from the end of the
month to the agency authorised by the Director General of Income-tax (Systems) in
respect of tax collected by the collectors and reported to him for that month; and

(b) intimate the number (hereinafter referred to as the Book Identification


Number) generated by the agency to each of the collectors in respect of whom the
sum collected has been credited.

(4) For the purpose of sub-rule (3), the Director General of Income-tax (Systems)
shall specify the procedures, formats and standards for ensuring secure capture and
transmission of data, and shall also be responsible for the day-to-day administration
in relation to furnishing the information in the manner so specified.

(5) (i) Where tax has been deposited accompanied by an income-tax challan, the tax
collected under sub-section (1) or sub-section (1C) of section 206C shall be
deposited to the credit of the Central Government by remitting it within the time
specified in clause (b) of sub-rule (1) or in sub-rule (2) into any branch of the
Reserve Bank of India or of the State Bank of India or of any authorised bank.
(ii) Where tax is to be deposited in accordance with clause (i), by persons referred to
in sub-rule (1) of rule 125, the amount collected shall be electronically remitted into
the Reserve Bank of India or the State Bank of India or any authorised bank
accompanied by an electronic income-tax challan.

(6) For the purpose of this rule, the amount shall be construed as electronically
remitted to the Reserve Bank of India or to the State Bank of India or to any
authorised bank, if the amount is remitted by way of-

(a) internet banking facility of the Reserve Bank of India or of the State Bank
of India or of any authorised bank; or

(b) debit card.

(7) Where tax is collected before the 1st day of April, 2010, the provisions of this
rule shall apply as they stood immediately before their substitution by the Income-
tax ( Amendment) Rules, 2010.
Certificate of tax collected at source under section 206C(5).
37D. (1) The certificate of collection of tax at source under sub-section (5) of section
206C to be furnished by the collector shall be in Form 27D.
(2) The certificate referred to in sub-rule (1) shall specify:-

(a) valid permanent account number (PAN) of the collectee;

(b) valid tax deduction and collection account number (TAN) of the
collector;

(c) (i) book identification number or numbers where deposit of tax


collected is without production of challan in case of an office of the Government;

(ii)challan identification number or numbers in case of payment through bank;

(d) receipt number of the relevant quarterly statement of tax collected at


source which is furnished in accordance with the provisions of rule 31AA.

(3) The certificate in the Form No. 27D referred to in sub-rule (1) shall be furnished
to the collectee within fifteen days from the due date for furnishing the statement of
tax collected at source specified under sub-rule (2) of rule 31AA.
(4) The collector may issue a duplicate certificate in Form No. 27D if the collectee
has lost the original certificate so issued and makes a request for issuance of a
duplicate certificate and such duplicate certificate is certified as duplicate by the
collector.

(5) Where a certificate is to be furnished for tax collected before the 1st day of April,
2010, it shall be furnished in the Form in accordance with the provisions of the rules
as they stood immediately before their substitution by the Income-tax (
Amendment) Rules, 2010. ”;
(d) in Appendix-II,-

(i) for Form. No. 16 and Form No.16A, the following Forms shall be substituted,
namely:-