CBDT brings in new changes in TDS rules
The Central Board of Direct Taxes (CBDT) has revised the Income Tax Rules, 1962 by bringing in new changes to the provisions regarding Tax Deduction at Source (TDS) that are filed on or after April 1, 2010.
New rules for TDS deposits
Every month the employers deduct tax on the salaries and other payments distributed to the employees. According to the new rules, the employers should deposit the tax deduction for a month within 7 days from the end of that month. However, the tax deducted for the month of March, which is the end of the financial year, can be deposited on or before April 30 of the year.
For annual TDS certificate
The new CBDT rules also make it mandatory for the employers to issue the Form 16 or the annual TDS certificate to their salaried employees by May 31 soon after the end of the financial year. Previously the deadline was April 30.
The employer should mention in the TAXWISE Form 16 his TAN number, the PAN numbers of the employee, and the relevant challan identification and receipt numbers of the four quarterly statements or Form 24Q. While doing this, the employer should take into consideration the changes in the due dates for filing such quarterly returns and that the Form 16 issued carries all information pertaining to all four quarters.
For TDS applicable on other payments, the new rules state that the employer should issue the Form 16A every quarter within a fortnight from the due date of filing the Forms 26Q/27Q. Prior to this new rule the employer had to choose between issuing certificates every month or at the end of the year.
Finally the employer might use the option of digital signatures to authenticate the Form 16. However this is subject to specified conditions.
For quarterly TDS certificate
The employers should file Form 24Q (quarterly statements for TDS) and Form 26Q and 27Q (for TDS on other payments) within a fortnight of the end of each quarter. However for the last quarter the filing can be done by May 15 of that year.
New sections in Form 16
Two new sections, Part A and Part B have been introduced in Form 16 for those employees who had worked for more than one employer during a financial year. In such a case every employer should issue Part A in the Form 16 that will include the respective period for which the employee was working for the employer.
However, the employee has the option to get issued Part B of the Form 16 from every employer or from the last employer.
For other payments
The employers should include Form 16A for TDS applicable on other payments which should be issued on quarterly basis in relation to the prior options of issuing it every month or at the end of the year.
It is not mandatory to file the Form 16 and 16A along with the taxes but it is the duty of the employee to ensure that these particulars related to the TDS are recorded so that it becomes convenient when he files the TDS for his personal and other tax returns.