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The Income Tax Department has recently started processing the
TDS Returns filed for the Financial Year 2007-08 and issuing notices u/s 201 (1)
of the Income- tax Act,1961
Each notice gives reference of financial year, quarter , Form No and RRR No.
The Notices are being issued in cases where any TDS is found recoverable from the
Tax Deductor on the basis of the TDS Returns filed by the Tax Deductors.
The three broad heads under which TDS is found recoverable are as under :
1. Section wise
amount deducted but not paid
Under this head the total amount
of challans which have not matched online are mentioned section wise.
Response
- In reply to this head the Tax Deductor will first have to ascertain the
reason for the online mismatch of the challan.
- After ascertaining the reason of the mismatch he will have to file a correction
statement for rectifying the mismatch.
- The copy of the Correction Return alongwith the copy of the paid challan
should be enclosed in the reply in response to this head of the notice.
2. Total Interest
on late payment till date
Under this head the total amount
of interest payable is worked out based on the date of payment of the challans forming
part of the TDS Return.
Response
- In reply to this head the Tax Deductor needs to verify his TDS Return and
find out the cases of late payment of TDS and work out the interest payable
thereon.
- If interest is payable on account of late payment of TDS then the same should
be paid and a copy of the challan attatched alongwith the reply to the notice.
Interest Calculation
- The interest is calculated as per the provisions of Section 201(1A) and
Rule 119A.
- The current rate of interest is 12% p.a
- Interest will be calculated from the date on which tax was deductible to
the date on which such tax is actually paid.
- Interest is to be calculated for every month or part of a month comprised
in a period, any fraction of a month shall be deemed to be a full month and
the interest shall be so calculated.
- The amount of tax, in respect of which such interest is to be calculated
shall be rounded off to the nearest multiple of one hundred rupees and for this
purpose any fraction of one hundred rupees shall be ignored and the amount so
rounded off shall be deemed to be the amount in respect of which the interest
is to be calculated.
3. Section wise
short Deduction
Under this category each and every
transaction is matched with the rate mentioned against the said transaction any
the total tax that is short deducted is mentioned section wise.
Response
- The notice does not specify the transaction wise working of the short deduction.
Hence it becomes very difficult to match the amount.
- The notices are issued by the TDS Officers based on the TAN wise reports
received by them from the Regional Computer Centre (RCC). Hence they are also
not in a position to specify the working of this figure to the Tax Deductor.
- In the absence of the transaction wise working of this figure it becomes
very difficult for the Tax Deductor to comprehend the basis of arrival of this
figure mentioned in the notice and consequently reply thereto.
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