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2020

Brief Overview of TDS Certificates under Income Tax Act, 1961

Brief Overview of TDS Certificates under Income Tax Act 1961

Under Section 203 of the Income Tax Act, 1961 mandates that the employer has to deduct TDS. After deducting the TDS, the employer has to issue certificates. These certificates are Form 16 and Form 16A that are issued to the deductees as a proof of the same.

Tax Deducted at Source (TDS) is a type of tax deducted from the income as per the specified percentage (%).TDS is deducted by the employer.

The TDS return process will be considered as incomplete until the Valid TDS certificate has been issued by the deductor. If we focus on the word Valid TDS Certificate, it means Form 16/ Form 16A issued by authenticated authority. As on the current date the TRACES have the authorization to issue valid TDS certificate.

Types of TDS certificates:

 Form 16 For salary income (issued annually)
 Form 16A  For non-salary income (issued quarterly)


Validity of a TDS Certificate:

  • TDS Certificates should be downloaded only from the TRACES (TDS Reconciliation Analysis and Correction Enabling System of the income tax department).The downloaded certificates are in specific format.
  • The digital signature should be verified, it must have a check mark cross. An unverified signature will have a question mark over the signature.
  • Must check the details on the TDS certificate, it should have correct details of your name, PAN, deductors’ TAN, amount paid to you, TDS amount.

What are the Contents of a TDS Certificate?

  • The TDS certificate to be issued by the deductor/collector contains the following details:

a. Valid PAN of the deductee;
b. Valid TAN of the deductor/collector ;
c. Challan Identification Number (CIN), which is a number generated by a combination of BSR code of the bank where tax is deposited, date of deposit and the challan serial number allotted bythe bank;
d. Receipt number of the relevant quarterly statement of TDS (i.e., TDS return).

Issuance of TDS Certificate:

  • Every deductor has to issue a certificate to the deductee in respect of tax deducted by him.
  • Such certificate is generally referred to as TDS certificate.
  • Download TDS certificate (Form 16/16A) (tdscpc.gov.in) bearing unique TDS certificate number and issue to the taxpayers within due date.
  • TDS certificate in Part A of Form 16 shall be generated only for those PANs that have been reported in Annexure II of 24Q statement for 4th Quarter.
  • The deductors are, therefore, advised to ensure that they provide salary details of their employees employed for whole or part of the year in Annexure II of Quarterly TDS Statement for 4th Quarter.

Form No. Particular Frequency of Certificate Issuance
Form No. 16 TDS certificate in respect of tax deducted on salary. Annually
Form No. 16A TDS certificate in respect of tax deducted on payments other than salary. Quarterly


Note: Multiple payments can be clubbed in quarterly TDS certificate.

Due Date for Issuance of TDS Certificates

  • Please be advised that under the provisions of section 203 of the Income Tax Act, 1961 read with rule 31A, Certificate of tax deducted at source is to be furnished within fifteen (15) days from the due date for furnishing the statement of tax deducted at source.

 

Form no. Periodicity Periodicity Due date for FY 2019-20
Form 16 TDS on salary Annual 15th August 2020
Form 16A TDS on payment other than salary Quarterly Within 15 days from the due date for furnishing the statement /return of tax deducted at source.

 

Note: All the deductor shall issue form 16A generated or downloaded from TIN central system and authenticate the same either by using digital or manual signature.

Penalty for Non-Compliance u/s 272A:

  • Failure to comply with the provisions of section 203 of the Income Tax Act, 1961 read with rule 31A the Act will attract penalty under the provisions of section 272A of the Act.
  • A sum of one hundred rupees for every day during which the failure continues.

Revised Due Dates for FY 2019-20:

  • CBDT has revised the due date for filing TDS returns and issuing TDS Certificates for FY 2019-20 (Q4) for Government and Non-Government Deductors due to COVID-19 pandemic situation.

The Revised Dates has been given below:

TDS Form Revised Due Dates
Form 16 for TDS on salary during FY 2019-20 15-08-2020
Form 16A for TDS on income other than salary for Q4 of FY 2019-20 15-08-2020

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