TRACES – The new online platform for TDS by Income Tax Department

 TRACES – The new online platform for TDS by Income Tax Department  Tax Deducted at Source (TDS)
Feb 082013
 

TRACES- The new online platform for TDS by Income Tax Department

The Income Tax Department has come up to launch a new website for TDS (Tax Deduction at Source). The web address of this new online format is https://www.tdscpc.gov.in TRACES is the name given to this system which stands for TDS Reconciliation Analysis and Correction Enabling System and has been set up by TDS Centralised Processing Cell of the income-tax department. A user friendly interface in an online format; facilitating ease of accessibility to its users. The site covers features that will assist deductors and tax -payers in viewing, downloading, accessing information on the pertaining subject matters.

Register and become a member on this portal.

Users need to register on the website in order to make use of the services offered by the web based portal. This TDS exclusive website will replace the old website TIN NSDL. The previously registered members on the NSDL site can use their login details on the new website as well. And the new users can sign up as a new user. The details regarding the same have been given under the ‘FAQ’ section. Registration onwards, the users can access all the facilities and services available on the site. In case the existing member login fails, the user shall register once as a new user on the portal.

The Functionalities enable the users to the following:

  • Registration of a admin user for a TAN
  • Creation of sub users by admin users
  • View the challan status
  • View annual tax credit statements (form26AS)
  • Download justification reports
  • download Form 16/16A
  • download the NSDL consolidated file
  • Download Consolidated TAN-PAN File
  • Download Justification report
  • PAN verification
  • Brief of deductors’ account
  • Online registration of TAN
  • Online filing of TDS Statements
  • Provide feedback

The annual tax credit deducted for the TDS/TCS amount by the deductors will be viewed by the tax payers. The website is beneficial for both, tax payers as well as tax collectors. The tax payers can view the status and statements whereas the deductors can view and download the related forms, etc. This effort by the concerned department is to aid the deductors and deductees at every possible step and improve the service mechanism as per the feedback of the users.

Tax Saving Tips – Investments and Deductions Under Section 80C

 Tax Saving Tips – Investments and Deductions Under Section 80C  80C Investments, Tax Deducted at Source (TDS), Uncategorized
Feb 042013
 

Tax Saving Tips – Investments and Deductions Under Section 80C

Your hard earned income is subject to taxation under the Income Tax Act. You can save a part of your income as a tax deduction; thus reducing your total taxable income. Such tax deduction options are available under the various sections of it act. Section 80 c provides that Rs 1 lac per annum can be saved from being taxed by investing in such instruments:

  • Public Provident Fund (PPF)
  • National Savings Certificates (NSC)
  • Contributions to Employees Provident Fund (EPF)
  • Fixed Deposit (FD) with Banks having a lock-in period of five years
  • Equity Linked Savings Scheme (ELSS) of Mutual Funds
  • Unit Linked Insurance Plan (ULIP)
  • Life Insurance Premiums
  • Repayment of Housing Loan (Principal)

It is applicable for individuals irrespective of their tax bracket and annual income. These are the tips under this section that will help you save your tax from your income.

PPF PUBLIC PROVIDENT FUND

It is the risk free government tool with a lock in period of 15 yrs and is beneficial for those seeking long term investment. You can invest up to Rs 1lac in all at the current rate of 8.8%.  . The interest earned here is not taxed. The minimum investment in PPF is Rs 500 per year and the maximum investment is Rs 1,00,000/- per year. It can be a lump sum investment or can be divided in to a 12 transaction per year. A special benefit that comes along is that in case of insolvency it will not be attached to the assets of the insolvent. PPF can be used for minors as well, who can avail benefit of the same when they turn 18.

NSC NATIONAL SAVING CERTIFICATES

Very secure since it is backed by the government. Interest rate for 5-year NSC delivers 8.6% whereas 10-year NSC offers 8.9%. Interest earned is subject to tax and there is no limitation on the amount of investment. NSC is eligible for use as a security in order to derive a loan from the banks. Minimum amount is Rs100.

EMPLOYEES PROVIDENT FUND

Employees provident fund is the deduction from the salary (minimum a 12%) made by the employer into a provident fund account. This deduction is mandatory on the earned income as an aid to both private and non pensionable public sector employees. A fraction of your monthly income is deducted and gets accumulated till the time employee attains the retirement age. After the age of 55, the employee can withdraw full amount at any time. Apart from monthly deduction the employee can contribute extra through VPF voluntary contributions.

 FIXED DEPOSITS

In a Fixed Deposit Saving Scheme a certain sum of money is deposited in the bank for a specified time period with a fixed rate of interest. For tax free bank deposit under section 80c, lock in period of 5 yrs is a must and premature withdrawal is not allowed. The amount under this FD is deducted from the taxable income and the maximum permissible amount is Rs1 lac. This amount can be undertaken for a loan. A safe investment option beneficial for those who want to lock their money for long. However the interest received on such deposit is taxable.

EQUITY LINKED SAVINGS SCHEME (ELSS) OF MUTUAL FUNDS

This market linked investment comes up with a 3 year lock in period. ELSS is your helping hand in saving tax offering high returns. With low expenses, this option ensures a high liquidity and growth in long term. Withdrawing before a 3 year period is not allowed.  Also ELSS returns are not guaranteed as they are market linked investments.

ULIP- UNIT LINKED INSURANCE PLAN

 ULIP is the risk free investment option that lets you flexibly invest wherein part of the premium pay goes toward the sum assured and the balance will be invested in whichever investments you choose depending upon the scheme-equity, debt or a mix of the both. The premium that is paid under these schemes is considered under this section. It can be partly exposed to stock market. ULIP schemes come in insurance cover forms as well as investment options.

LIC PREMIUMS

This includes the premiums that you pay for the LICs or insurance policies under other private insurance companies. The policies ensuring life of self, spouse or any child are considered. Also, insurance premiums paid for parents, is covered for deduction under 80C. Thus, the total amount for all premiums from all eligible policies can be included as the deduction.

REPAYMENT OF HOUSING LOAN (PRINCIPAL)

Under section 80c , the principle component that you pay for your home loan is eligible for deduction. The yearly amount that is spent under the repayment of housing loan as the principal can be deducted from the taxable income.

TDS on Salaries

 TDS on Salaries  Tax Deducted at Source (TDS), TDS on Salaries, Uncategorized
Nov 292012
 

TDS on Salaries

If a person is running his own business firm and have a regular staff on his payroll, it is mandatory under section 192 of the Income Tax Act  1962 to make tax deduction from the income of his employee, if the employee comes under the taxable limit.

An employer is supposed to make tax deduction at source from the payment made to the employees. If he has paid some advance salary or arrears thereon, he has to take such payment into consideration for tax deduction.

The computation of tax deduction also called as TDS projection must be done at the start of the Financial Year. If employee has got some other income source it has also to be considered. Through careful consideration of exemptions, deductions, investments under section 80C etc. Employee’s tax liability needs to be calculated and the tax rates imposed there-upon should be in force in the respective financial year. Every month 1/12th of the net tax liability has to be deducted.

Rates of Income Tax for the FY 2012-13.

Male Citizen Female Citizen Rate of Tax
The Total Income is less than Rs. 2,00,000/-. The Total Income is less than Rs. 2,00,000/-. Nil
The Total Income is between Rs. 2,00,000/- and Rs. 5,00,000/- The Total Income is between Rs. 2,00,000/- and Rs. 5,00,000/- 10 per cent, of the amount by which the total income exceeds Rs. 2,00,000/-
The Total Income is between Rs. 5,00,000/- and Rs. 10,00,000/-. The Total Income is between Rs. 5,00,000/- and Rs. 10,00,000/-. Rs. 30,000/- plus 20 per cent of the amount by which the total income exceeds Rs. 5,00,000/-
The Total Income exceeds Rs. 10,00,000/-. The Total Income exceeds Rs. 10,00,000/-. Rs. 130,000/- plus 30 per cent of the amount by which the total income exceeds Rs. 10,00,000/-.

 

Sr. Citizens between 60years and 80 years Rate of Tax
The Total Income is less than Rs.2,50,000/-. Nil
The Total Income is between Rs. 2,50,000/- and Rs. 5,00,000/- 10 per cent, of the amount by which the total income exceeds Rs. 2,50,000/-
The Total Income is between Rs. 5,00,000/- and Rs. 10,00,000/- Rs. 25,000/- plus 20 per cent of the amount by which the total income exceeds Rs. 5,00,000/-.
The Total Income exceeds Rs. 10,00,000/-. Rs. 125,000/- plus 30 per cent of the amount by which the total income exceeds Rs. 10,00,000/-

TDS Deposit

After the TDS has been deducted from the salary of the employee, the deducted tax has to be deposited to the government online using challan 281. The tax has to be deposited within 7 days from the end of the month in which tax gets deducted. Except tax deducted in the month of March, should be deposited before 30th of April.

Due date for submitting Quarterly TDS return

  • By July 15th after the end of the first quarter. [April, May and June (Q1)]
  • By 15th October after the end of the second quarter.[ July, August and September (Q2)]
  • By 15th January after the end of the third quarter [October, November and December (Q3)]
  • By 15th May after the end of the fourth quarter [January, February and March (Q4)]

Issuance of TDS certificate

The deductor has to issue a certificate which comes in Form 16  containing name of the employer, salary details, exemptions, investment details, tax deduction and payment details like  BSR code, date of TDS deposit, serial no. of challan and tax amount . The due date for furnishing TDS certificate to the employee or deductee is May 31st

There are penalties for default of TDS for not deducting TDS or not depositing TDS into Central Government Account in the prescribed manner. Along with penalties, the person can be prosecuted. So being familiar with the provisions concerning with Tax deduction at source is very important.

e-TDS Software for Filing e-TDS Returns

 e-TDS Software for Filing e-TDS Returns  Tax Deducted at Source (TDS), TDS Software
Oct 192012
 

e-TDS Software for Filing e-TDS Returns

TDS or Tax Deducted at Source is the direct and compulsory tax component that is deducted from the salaries of employed people who draw a salary above the minimum level decided by the government. This is calculated on fixed percentage of the salary of the person. However, since different people may have different salary structures, the task of arriving at the figure becomes all the more challenging for the accounts department. It is in this aspect that the TDS software takes the load off the shoulder of the accounts department.

Once the company has the TDS Management software installed in their systems, the calculation of the TDS is carried out with the least bother. This software also helps people to calculate TDS under the various heads of the Income Tax Act. Some of the different heads are interest on securities, payments to contractors, rent, fees to professionals, etc.

The e-TDS software offers you a time-saving, an efficient solution to generate quarterly TDS statements. With the help of e-TDS software you can generate quarterly statement in form 24Q, form 26Q,  form 27Q, and form 27EQ. You need to file e-TDS or e-TCS return as per e-filing Administrator’s data format (NSDL). The FVU is used to validate e-TDS or e-TCS returns.

The e-TDS software can help you import data from Accounting Software / ERP or can be imported from Text file or MS-Excel files or FVU file. Various MIS reports can be generated like challan wise, payments details, list of deductee / party with details like addresses, PAN etc. The software also help you keeps information related to deductor such as TAN or PAN, BSR codes, MICR codes etc. You can make online tax payment and generate Challan. You can download TDS certificates Form16 & Form16A automatically from the NSDL website on a click of a button. The e-TDS Software also has the advanced facility of emailing digitally signed Form 16 or Form 16A.

e-TDS software also generate Revised Statements related to

a. Update deductor details such as Name, Address of Deductor.
b. Update challan details such as challan serial no., BSR code, challan tender date, challan amounts etc.
c. Update/delete /add deductee details.
d. Add / delete salary detail records.
e. Update PAN of the deductee or employee in deductee/salary details.
f. Add a new challan and underlying deductees.

With the help of the software you can generate NIL returns just with a click of a button. There are facilities of data backup & restore facilities as and when you need. There is an option available to export the MIS reports in PDF, Word or Excel format.

For more details on TDS Management Software, Please visit us at http://www.sensysindia.com

File Validation Utility version 3.6 released by NSDL

 File Validation Utility version 3.6 released by NSDL  Tax Deducted at Source (TDS)
Sep 282012
 

File Validation Utility version 3.6 released by NSDL

 File Validation Utility version 3.6 has been released with the following considerations,

  • FVU Version 3.6 will be in effect from 16th October 2012.
  • Upto October 15, 2012, FVU version 3.5 & FVU version 3.6 can be used.
  • For instance, Quarter 2 TDS Statement for F.Y. 2012-13, can be validated with FVU 3.5 and FVU 3.6, if filed by  15th October 2012.
  • Upto FVU 3.5, challan file was optional, but in effect from 16th October 2012, while validating e-TDS File through FVU version 3.6, challan file has become mandatory, this can be downloaded from the TIN Website under Challan Status Enquiry.
  • Challan file is only required while validating e-TDS file, in case TDS amount gets deposited through challans.
  • Deductor who does not use challan for depositing TDS, will not be required to provide challan file during TDS validation.
  • Challan file is require for validation in case of regular statement & in case of correction statement, challan file is required in following scenarios
    • Updation of Challan
    • Updation of Deductee &  corresponding challan
    • Addition of Challan.

Following Section has been introduced.

Section
Code

Section
Code to be quoted in Quarterly TDS/TCS Statement

Applicable
to TDS/TCS statement Form No.

Effective
From

194LB

4LB

27Q

FY 2011-12

194LC

4LC

27Q

FY 2012-13

206CJ

J

27EQ

FY 2012-13

206CK

K

27EQ

FY 2012-13

Two Flags have been introduced:

Flag O: – Form no. 24Q included Flag “O” explains the salary details of Super Senior Citizen (above the age 80) and has been into force since FY 2011-12 onwards.
Flag S: – Flag S, as per ITD notification dated 21/2012, for software vendor transaction in (Form 26Q – Section code 194J and 27Q –Section code 195) and has come into effect from FY 2011-12 onwards.

Fees and Penalty for Late Filing of TDS Statement / Returns

 Fees and Penalty for Late Filing of TDS Statement / Returns  Fees and Penalty for Late Filing of e-TDS Statement, Tax Deducted at Source (TDS)
Sep 272012
 

Penalty for Late Filing of TDS Statement / Returns

Fees & Penalty are likely for instances such as –

  • Non-filing of e-TDS Statement / Returns.
  • Late filing of e-TDS  Statement / Returns.
  • Incorrect PAN, TDS Amount and Other Mandatory details.

This imposition of Fees & Penalty is implied by Section 234E & Section 271H.

Dear Deductors!  (Read Carefully)

The TDS filing Fees & Penal provisions are as follows –

Section 234E speaks of Levy of Fees effective from 1st July 2012

–  Failure to submit e-TDS Statement on time will result in fees on the Deductor.

–  If you delay or forget to file your e-TDS Statement, Fees of Rs. 200 per day will be levied on the Deductor, as long as TDS Statement is not filed.

–  The Levied Amount of Fee is not supposed to exceed the TDS deductibles.

–  Prior to Filing of TDS Statement such Fee should be paid and it should be reflected in the TDS Statement.

Section 271H speaks of Penalty effective from 1st July 2012

Deductor has to pay a penalty ranging from minimum of Rs. 10,000/- to One Lac rupees,

–  If Deductor exceeds one year time limit to File TDS Statement.
–  If Deductor furnishes incorrect details like PAN, TDS Amount, Payment of Challan etc.


Not filing TDS before the deadline or with incorrect details is literally going to lose out on your hard-earned money.

 

What is Form 15G and Form 15H ?

 What is Form 15G and Form 15H ?  Form 15G & Form 15H, Forms, Tax Deducted at Source (TDS)
Aug 302012
 

What is Form 15G and Form 15H ?

Form 15G and Form 15H are self declaration forms that need to be submitted to avoid TDS deduction from a person’s income where the total income stands below the taxable limit as applicable in the case of men, women and senior citizens. In other words, Form 15G and Form 15H are self declaration forms to be furnished if total taxable income of a person is going to be less than the permissible limits. Form 15H is for senior citizens and Form 15G is for other individuals. However, these forms are not applicable for Non-Residential Indians (NRI’s).

Form 15H can be submitted by a person who is Resident Individuals above 60 yrs of age (w.e.f 01/04/2011). An important point here is that a person should have not have paid any tax in the previous year . So only if one didn’t have any tax liability in the previous year can submit Form 15H . It should be submitted at the start of the year itself.

Form 15G has the same purpose as Form 15H , just that this form should be submitted by a person below 60 yrs old (w.e.f 01/04/2011). This also includes the Hindu Undivided Family(HUF).

Example

Lets take a example, Mrs Verma is a house wife, aged 45 and she has a Fixed Deposit of Rs 2,00,000 /-.

She is earning interest @ 10%. During the last year she has earned interest of Rs 20,000/-.

Mrs Verma’s Bank is under obligation to deduct TDS @ 10.3%  (20.6% in case she has not submitted PAN number to the bank) i.e  TDS of Rs 2,060/- will be deducted by bank.

How can she save the TDS on her Fixed Deposit ?

To save the TDS on her Fixed Deposit, Mrs Verma need to sign and submit Form 15G to the bank. Form 15G is the declaration to the Income tax department, that My (Mrs Verma’s) total income is less than the total taxable limit (Rs 2,00,000/- for Financial year 2012-13).

If Mrs Verma’s age was above 60 yrs of age, then she would need to sign and submit Form 15H to the bank.

Download Form 15H

Download Form 15G

What happens in case of Non Resident Indians (NRI’s)

NRI’s are not eligible to submit the above mentioned Form 15H and Form 15G but that does not mean that they have no option. NRI’s can apply to Income Tax Department proving the deduction of TDS is more than their tax liability and obtain exemption certificate which can then be submitted to payer of funds to avoid TDS deduction.

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