TAX TALK-26.03.2012-THE HITAVADA

TAX TALK-26.03.2012-THE HITAVADA

TAX TALK

BY CA. NARESH JAKHOTIA (Chartered Accountant)

“REMEDY IF THE TDS CERTIFICATE IS NOT ISSUED OR NOT REFLECTED IN 26AS”

Query 1]

I am a retired bank officer not drawing any pension since I opted for the PF option. I have deposited the terminal benefits i.e., PF, Gratuity, etc in cumulative fixed deposits. Interest with original deposits is refunded on maturity in a Public Sector Bank. I am not depositing any Form No. 15G/15H with the bank but let the bank recover TDS on interest earned by me. I have following queries:

1. Some of my deposits have matured and credited to my a/c after deduction of TDS on following dates viz 01/11/2011, 08/11/2011, 30/11/2011, 13/12/2011, 23/02/2012, but the amount of TDS is not reflected in the Form 26AS in my PAN till date. Also the bank has not issued me the TDS certificate till date. Is there any rule under I.T. Act stipulating the time by which the TDS certificate is to be issued by the bank and the time limit within it is to be reflected in my Form 26AS for view? Where should I approach to redress this issue? Because of this delay, I was not able to arrive at the exact Income- Tax liability to pay the Advance Tax before 15th March2012.

2. In case of one private sector bank where I have some FD’s, Interest on my cumulative Fixed deposits were paid on 12/05/2011 & 30/06/2011, the TDS were also reflected in my Form 26AS on 07/06/2011 and 07//7/2012. Not only this, I have received TDS Certificate i.e., Form no 16A on 22/07/2011.

3. What private sector bank is doing, the PS Bank is not following. Please apprise us about the respective clauses/rules for issuance of TDS Certificate by the Income-Tax department so that I could approach the concerned PSB for remedy. [apteashok@gmail.com]

Opinion:

1. The person deducting the tax at source is duty bound to:

a. Deposit the tax deducted at source within prescribed time to the Government Treasury.

b. File the Quarterly TDS return in respect of the Tax Deducted

c. Issue the TDS Certificate to the Deductee within a prescribed time.

2. For non compliance of each and every part mentioned above, there is a separate penalty and consequences under the Income Tax Act-1961 as under:
a] For non issuance of TDS Certificate within a prescribed time, penalty is imposable u/s 272A (2) @ Rs. 100/- per day during which the failure continues. However, the amount of penalty cannot exceed the amount of tax deductible/deducted.
b] For non filing of TDS Return also, there is a penalty provision of Rs 100 per day.
[The recent Finance Bill-2012 has proposed a fee of Rs. 200/- per day for late filing of TDS Return. Besides, a penalty of Rs. 10,000/- to Rs. 1,00,000/- is proposed for non filing or inaccurate filing of TDS return. The amendment is proposed w.e.f 01.07.2012].

3. Without Quarterly TDS Return being filed by the Deductor, you will not be entitled for the Tax Credit in respect of TDS done from payment made to you. Also, unless and until the TDS return is filed by the Deductor, deductee will not be able to view the TDS Credit in Form No. 26AS.

4. There is a general grievance that in many cases the Bank and other Tax Deductor are either not filing the quarterly TDS return (or are not issuing the TDS certificate) despite many requests & reminders by the Deductees.

5. In such cases, Deductee can follow the following approach:

i. Write a letter to the Deductor incorporating:
a] The details of payments done and the tax deducted therefrom.
b] Provision of Section 203 which requires the Deductor for issue of tax certificate within one month from the date of tax deduction

ii. Keep the proof of letter issued to the Deductor

iii. If despite this, the certificate is not issued, write a letter to Joint Commissioner or Addl. CIT of TDS wing who has jurisdiction over the Deductor mentioning the detailed facts elaborated above.

6. We advise all our readers to regularly track all the tax deducted & deposited in your account [i.e. Tax Credit in Form No. 26AS] by registering your PAN at www.incometaxindia.gov.in. In the absence of availability of TDS in form No. 26AS it would be difficult for the Assessing Officer to grant the TDS Credit.