Latest Expert Exchange Queries

GST Demo Service software link:
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Popular Search: TAX RATES - GOODS TAXABLE @ 4% :: ACCOUNTING STANDARDS :: TDS :: ARTICLES ON INPUT TAX CREDIT IN VAT :: due date for vat payment :: form 3cd :: ACCOUNTING STANDARD :: articles on VAT and GST in India :: VAT RATES :: Central Excise rule to resale the machines to a new company :: cpt :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: list of goods taxed at 4% :: empanelment :: VAT Audit
Direct Tax »
 Businesses need not deduct GST on advances received for goods supply: CBEC
 Redress taxpayers' grievances on priority: CBDT to I-T department
 No tax relief on EPF interest if not employed: ITAT
  CBDT signs 7 more unilateral APAs with taxpayers
 Income tax returns (ITR) filing: Get capital gains tax exemption on new property; here is how
 Reach out to non-filers of GST returns: CBEC to fields offices
 CBDT may shelve plan to seek corporate tax estimates in advance
 IT expertise at banks' board level a must, says RBI ED
 Clarification on Indirect Transfer provisions in case of redemption of share or interest outside India under the Income-tax Act, 1961
 To avoid double-taxation CBDT says no tax at upstream foreign fund if local fund paid already
 CBDT extends due date for filing Income Tax Returns and Tax Audit Reports

TDS woes spilling from TIN
July, 16th 2011

For the first time perhaps the Central Board of Direct Taxes has chosen to consciously undermine a hoary law still extant, the one Parliament has chosen not to repeal. The tax administration has been exhorting taxpayers not to set store by the TDS certificates they receive, but by what appears in the Tax Information Network (TIN) as tax credit available to them by way of advance tax, tax collected at source and deducted at source.

What this meant was no matter what the TDS certificates said, the TIN information would be held as final and sacrosanct. And more galling would be a situation where a taxpayer has paid an instalment of advance tax, but can't claim credit for the same because the bank with which the amount has been deposited has goofed up.

TIN information is compiled out of what the banks with which tax deducted at source is deposited upload into the system and TDS certificates are issued by employers and others obliged to deduct tax at source.

The peremptory message is in case of discrepancy between the two, the former would prevail. This was the first step in dethroning of TDS certificates through an administrative fiat without the backing of the Parliamentary approval.

Going a step further, the tax administration now has exhorted the tax deductors not to issue Form 16/16A on the basis of their own accounting information, but on the basis of the TIN information. And this time round, the peremptory order is being flashed by the ticker in red appearing on its Web site. While the ticker might be construed as a belated attempt to forestall and pre-empt the discrepancy between TIN and TDS certificates by aligning the two peremptorily, the bottom-line is effective marginalisation nay annihilation of the true worth of TDS certificates.

The solution worked out by the CBDT to the problem of discrepancy inevitable in a dual system is ham-handed, to say the least. For, the Income-tax Act, 1961 still says that income-tax returns have to be filed on the basis of TDS certificates. Thus if a person has got in his possession TDS certificates obtained from various companies aggregating to Rs 25,000 whereas the TIN shows only Rs 20,000 to his credit, he can claim credit in his income-tax return only for Rs 20,000. . How can he be expected to bear the resultant interest liability for short payment of tax? And In the first place, how can the department place a burden on him for payment of Rs 5,000 when nothing is due from him and the fault is that of the system. The ham-handed solution being attempted is to ask these companies to look up the TIN, and not their own records before issuing the TDS certificates.

This begs the question - why go through the farce of TDS certificates when TIN is in any case going to overrule them.

The plausible explanation is the seeming respect for the mandate of Parliament that TDS certificates still rule the roost. The farce, confusion and contradiction are all going to be heightened when the Department goes ahead with its proposal evinced in its answer to a FAQ that soon it will start sending individual intimations of tax deducted at source to taxpayers from out of the information available in TIN.

Should this happen they would have two sets of documents in their hands - TDS certificates and the consolidated statement 26AS emanating out of TIN. The Department would like the taxpayers to junk the former if they do not reflect faithfully what has been stated in the statement of tax deducted i.e. 26AS. The ticker seeks to nip this possibility in the bud by calling upon tax deductors to set store by TIN, and not by their own records while issuing the certificates. Shouldn't Parliament step in and assert itself? Does it want to give the quietus to the TDS certificates regime?

A dual regime is always confusing and calls for needless reconciliation. Hence, a single unified regime is desirable. But the mandate for this has to come from the Parliament. While migrating to this regime it must be ensured that taxpayers are not put to trouble which is likely to happen should derelict tax deductors either sit on the tax deducted or are remiss in depositing them on time. Taxpayers should not be made to bear the cross for the shenanigans of the tax deductors or the inefficiency of the banking system or the TIN.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Customer relationship management software CRM software Operational CRM Collaborative CRM

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions