IT TDS - AVOID DEFAULTS

We can easily avoid Defaults in TDS statements, by way of adherence to the following basic principles:

· Timely Payment of total taxes deducted/ collected
· Correct Reporting with regard to PANs, Tax Rate and Challans
· Complete Reporting for all Deductees
· Timely filing of TDS Statements

Following are some important facts to be adhered to, while submitting TDS statements, to avoid each type of Default:

· Late Payment Defaults:

o The taxes deducted must be deposited within the due dates, as prescribed by Rule 30 of the Income Tax Rules 1962.

o Please also refer to our communication on Important Guidelines for payment towards liability on account of Tax Deducted / Collected at Source

· Short Payment Defaults:

o All the taxes deducted must be deposited with challan 281 quoting correct TAN, Assessment Year, Minor Head etc.

o Challan details/BIN details quoted in the statement should be correct. Challans can be validated by using Challan Status Inquiry(CSI) file. Correct details can also be verified at TRACES in “Challan Status” menu under “Statement Status” after login.

o There should not be any difference in the amounts quoted in “Deducted” and “Deposited” columns of the deductee rows.

o Challans quoted in the statement must have balance available for consumption against specified deductee rows. Available balance can be verified at TRACES in “View Consumption Details” under “Statements/ Payments” menu after login.

o Government Deductors need to report Book entry flag as “Y” in challan details.

· Short Deduction Defaults:

o Taxes must be deducted at correct rates specified in the Act.

o Correct flags (A, B, C, T and Y) must be raised for no deduction/ lower deduction/ higher deduction, as appropriate.

o The PAN for deductees must be valid and correct. TAN-PAN Master can be downloaded from TRACES and be used to file statement to avoid quoting of incorrect and invalid PANs.

o Correct and valid 197 Certificates must be specified.

o For 24Q statements, correct flags should be raised for Woman/ Man/ Senior Citizen/ SuperSenior Citizen deductees, as may be appropriate.

o DTAA flag “B” must be raised under section 195 of the Act, at the time of filing 27Q  statements.

· Late Deduction Defaults:

o Taxes must be deducted at the time of Payment or Credit, whichever is earlier.

· Late Filing Defaults:

o Quarterly TDS/TCS statements must be filed within due dates of filing statements as prescribed by Rule 31A of the Income Tax Rules, 1962. The due date to file TDS statements for Q4, FY 2013-14 is 15th May, 2014.

Forwarded by S.Ramakrishnan

CIRCULAR No. 1/2014-2015                                                                 01.05.2014

MEETING

 Date                                     : 03.05.14 - Saturday

             Venue                                   : Vidya Mandir Matriculation School

             Time                                     :  6.00 PM

             Subject                                 : Recent GOs and Circulars – General Discussion            

.                         

                                                                                                                         Secretary.

Note:

Members may update their email-Id by sending test email-Id with address and phone no.

Hereafter you will receive meeting notices via email only.

Send your views and articles in advance to our association’s email

Members may forward other author’s articles to our blog

TURNOVER MORE THAN 2 CRORES? e-PAYMENT COMPULSORY

In G.O (Ms).30 dt 25.03.14, Rule 23 of the TNVAT Rules 2007 has been amended and the dealers , whose taxable turnover exceeds Rupees 2 Crores in the previous year, should compulsorly pay only by means of Electronic Payment (e-Payment).  Visit www.tnvat.gov.in to download the GO.

URGENT MEETING

CIRCULAR No. 7/2013-2014                                                                           19.12.2013

URGENT MEETING

   

          Date                                    : 19/12/2013 - Thursday

 

                     Venue                                  : Vidya Mandir Matriculation School

                     Time                                    :  5.30 PM to 6.30 PM

                     Subject                                : General discussion on Annexure V and Form-WW

             

       Meeting will be over at 6.30 pm.  So please be present @ 5.30 pm sharp.                          

                                                                                                                         Secretary.

Dear Members,

Greetings,

Members are informed that hereafter all communications will be sent only through email and there will be no postal communication. 

Hence members are requested to update their data name, address, phone no and email-Id by sending a mail to tpatirupur@gmail.com

TNVAT rl;lj;jpy; g[jpa khw;w';fs; (jkpHpy;)

1. With ‘C’ Form Sales-f;F ITC Reversal

            cs; khepyj;jpy; VAT tpjpf;fg;gl;l cs;sPl;Lg; bghUl;fis btspkhepyj;jpw;F mg;gona  my;yJ ntW bghUshf jahhpj;J with ‘C’ Form sales bra;jhy; 3% ITC Reverse bra;a ntz;Lk.;

Without ‘C’ Form sales-f;F KG ITC-a[k; Reverse bra;a ntz;Lk.;  ,Jtiu ,Ug;gJ bjhlh]fpwJ.  With ‘C’ Form sales-f;F 3% Reversal bra;a ntz;oaJ vg;go? xU cjhuzj;jpd;  \yk; ghh;g;nghk;.

Input goods purchase                                      Rs.60/-

mjw;fhd ITC 5%                                          Rs.3/-

With ‘C’ Form Sales                                       Rs.100.00

ITC Reverse bra;a ntz;oaJ                     Rs.1.80

        (3% on Rs.60/-)

fHpj;Jf; bfhs;sf; Toa ITC (3.00-1.08)     Rs.1.20

,e;j Rs.1.20I tHf;fk; nghy; cs; khepy my;yJ btspkhepy Tax due-f;F fHpj;Jf; bfhs;syhk.;

bfhs;Kjy; bra;ag;gl;l Input goods-f;F 14.5% tax fl;oapUe;jhy; 14.5% - 3% nghf kPjk; cs;s 11.5% fHpj;Jf; bfhs;syhk.;

gdpadhf ,Ue;jhy;

          nkny fz;l cjhuzj;jpy;/ gdpad; CST tpw;gidf;F fl;l ntz;oa 1% thpia/ fHpj;Jf; bfhs;sf; Toa Rs.1.20-apy; fHpj;jJ nghf kPjp 0.20 igrhit  local VAT-f;F fHpj;Jf; bfhs;syhk.;

2. Consignment Sales

            ,Jtiu  Consignment kw;Wk;  Stock Transfer bra;jhy; ITC-apy; 3% reverse bra;jJ nghf kPjp cs;sij kw;w due-f;F adjust bra;a Koe;jJ.  ,dpnky; ITC KGtJk;  reverse bra;a ntz;Lk;.  Adjustment fpilahJ.

3. Transit Pass

            rikay; vz;bza;fs; kw;Wk; ,Uk;g[ btspkhepyj;jpw;F tpw;gth]fs;/ Consignment or Branch Transfer bra;gth;fs;/ kw;Wk; gpw khepy';fspypUj;J jkpH; ehL tHpahf ntW khepy';fSf;F bfhz;L bry;gth;fs;  Transit Pass th';f ntz;Lk;;.

            1.11.2011  Kjy;  jkpH; ehl;oy;  ,Ue;J 6^th Schedule goods fis neuo tpw;gid bra;jhYk; Transit Pass  th';f ntz;Lk;;.  jw;nghJ 6^th Schedule-y; rikay; vz;bza;fs; kw;Wk; ,Uk;g[ nrh;f;fg;gl;Ls;sJ.

Important Amendments in TNVAT Act

1.     A proviso has been inserted to Sec.19(2) of the TNVAT Act, 2006 by Tamil Nadu Value Added Tax (5^th Amendment) Act, 2013 (Act No.28 of 2013).  The effect of the said proviso is that in respect of inter-state sales of goods that are purchased within the State from a registered dealer and sold in the course of inter-state trade or commerce falling u/s.8(1) of the CST Act, 1956), input tax credit shall be allowed in excess of 3% of tax.  In other words, if goods have been purchased locally within the State on payment of tax @5% and sold on inter-state sale basis and such sale is supported by “C” declaration forms, then Input Tax credit shall be allowed to the extent of 2% only.  Reversal of ITC has to be made on such sales to the extent of 3%. 

For example:

Purchase value of input material is                                 Rs.  60.00                 

     ITC at 5%                                                                      Rs.    3.00

            (Finished) CST Sale of output goods is                         Rs.100.00 

     ITC to be reversed                                                       Rs.    1.80

     (3% on Rs.60/-).

                        Eligible ITC that can be adjusted (Rs.3.00 – Rs.1.80) =Rs.   1.20

                            for other local sales or CST sales

i) If the output goods is hosiery then the CST rate of tax is 1%.  So on the sale value of Rs.100/-, tax to be collected is Re.1/-.  This tax amount of Re.1 can be adjusted from the eligible ITC of Rs.1.20 and the balance 0.20 Ps can be adjusted for other liabilities

ii) For other goods the rate of CST is @ 2% then, on CST sales value of Rs.100/-, Rs.2/- has to be collected and 0.80 Ps ( i.e Rs.2.00 – Rs.1.20 = Rs.0.80 Ps) has to be paid.

iii) If the goods purchased are used in manufacturing of both local and CST sales then, proportimate reversal has to be made.

2.  Sec.19(4) of the TNVAT Act, 2006 has been amended and ITC shall be allowed in excess of 5% in respect of stock transfer of goods.  In other words the rate of ITC to be reversed has been increased from 3% to 5%.

3.    The time limit for filing of Form WW has been extended from seven month to nine months from the end of the assessment year vide G.O.Ms. No.136 dt.31.10.2013.  In other words Form WW has to be filed on or before the 31^st of December.

4.    A new annexure, Annexure V has been added to the monthly Form I return to give details of the closing stock inventory if Input Tax Credit is carried forward to the next month.

5.     Rate of tax in respect of sale of alcoholic liquors has been enhanced.

6.    Sixth schedule to the TNVAT Act, 2006 has been amended and the following two entries have been added to the sixth schedule and hence transit pass is necessary for the following two goods also:

a.    Vegetable oils including refined vegetable oils

b.    Iron and steel as specified in clause (iv) of Sec.14 of the CST Act, 1956