INCOME TAX
(1) Issue of certificates for tax deducted at source under various provisions of the Income-tax Act, 1961--Replacement of Form No. 16 with new Forms Nos. 16, 16A and 16B (2) Change in date(s) of filing annual return(s) of tax deducted at source
Circular No. 597
Dated 27/3/1991
Under the provisions of section 203 of the Income-tax Act, every person deducting tax in accordance with the provisions of sections 192 to 194, 194A, 194B, 194BB, 194C, 194D, 194E, 195 and 196A is required to furnish a certificate to the effect that tax has been deducted and to specify therein, inter alia, the amount deducted, and, any other particulars that may be prescribed. The certificate has to be furnished within the period prescribed under rule 31 of the Income-tax Rules, 1962, to the person to whose account credit is given or to whom payment is made or the cheque or warrant is issued, as the case may be.
2. With a view to streamlining the work of issuing of certificates for tax deducted at source, and avoiding the problems experienced in the use of the unified Form No.16 [which was brought into force with effect from 1-4-1989, vide Notification No.S.O. 937(E), dated 10th October, 1988 ([1988] 174 ITR (St.)25), (Ref.: Board's Circular No.529 dated 13-2-89 (See [1989] 176 ITR (St.) 239))], the Central Government have now introduced a new scheme for the issue of these certificates. The main features of the scheme are as under:--
(i) Instead of the existing common Form No.16 for various deductions, three different forms, viz., Form No.16, 16A and 16B have been introduced by amending, inter alia, rule 31 of the Income-tax Rules through Notification No. S.O. 148(E), dated 28-2-1991 (see [1991] 188 ITR (St.)89. A copy of the Notification is enclosed for information and guidance.
(ii) The new Form No.16 shall be used for issuing the certificates for tax deducted at source under section 192 relating to salaries.
(iii) Form No.16A shall be used for issuing the certificates of tax deducted at source under section 193 relating to interest on securities, section 194 relating to dividends and section 194D relating to insurance commission.
(iv) Form No.16B shall be used for issuing the certificates of tax deducted at source under section 194A relating to interest other than interest on securities, section 194B relating to winnings from lotteries or cross-word puzzles, section 194BB relating to winnings from horse races, section 194C relating to payments to contractors or sub-contractors, section 194E relating to payments to non-resident sportsmen or sports-associations, section 195 relating to other sums, and section 196A relating to income payable to unit-holders of Mutual Fund.
(v) Forms Nos.16 and 16A can be issued on private stationery of the tax deductor or the printed forms available in the market, without approaching the Income-tax Department. However, these forms must be in the prescribed proformae.
(vi) Form No.16B shall be issued on a paper serially numbered and printed by the Central Government in book form and supplied for a consideration to the person deducting tax at source on an application made by him in Form No.17 to the Chief Commissioner or Commissioner of Income-tax having jurisdiction over him in this regard. However, in the case of companies which have adopted computerisation for furnishing such certificates, the Commissioner of Income-tax can waive the stipulation of the issue of certificates on forms printed by the Government. Such companies can issue the certificates through computers, but in the prescribed pro forma.
(vii) The new forms are to be used by the tax deductors for issuing any certificates for tax deducted at source after 28th February, 1991.
3. It may be mentioned that as per sub-rule (3) of rule 31, the aforesaid TDS certificates are to be furnished to the payee within a period of one month from the date of credit or payment of the sum, or as the case may be, from the date of issue of a cheque or warrant for payment of any dividend to a shareholder, subject to the exceptions covered by the provisos to sub-rule (3). For deductions under sections 192 and 194D, the certificates can be issued within one month from the close of the financial year in which the deductions were made. Non-furnishing of these certificates within the prescribed time invites penalty under section 272A of the Income-tax Act at the rate of a minimum of rupees one hundred and a maximum of rupees two hundred per day for the period of default.
4. According to rule 37 of the Income-tax Rules, a person responsible for deducting tax under any of the provisions of Chapter XVIIB of the Income-tax Act is required to file an annual return of tax deduction by the end of the specified month. The annual return for deduction from salaries (Form No.24) was hitherto required to be filed by the 30th April every year. This date has now been changed to 31st May by the aforesaid Notification of 28th February, 1991. Form No.24 has also been modified, vide Notification S.O. 220(E) dated 26th March, 1991 (See [1991] 188 ITR (St.) 111). The return this year may be filed in the new form.
5. For ready reference, the Table below rule 37, which specifies the Form numbers and the months by the end of which the annual returns of tax deduction have to be filed, is reproduced below:
|
Sl. No. |
Nature of returns |
Form No. |
Month |
|
(1) |
(2) |
(3) |
(4) |
|
1. |
Annual return of deduction of tax under section 192 from 'Salaries' |
24 |
May |
|
2. |
Annual return of deduction of tax under section 193 from 'Interest on securities' |
25 |
June |
|
3. |
Annual return of deduction of tax under section 194 from 'Dividends' |
26 |
April |
|
4. |
Annual return of deduction of tax under section 194A from 'Interest other than interest on securities' |
26A |
June |
|
5. |
Annual return of deduction of tax under section 194B from 'Winnings from lotteries or crossword puzzles' |
26B |
May |
|
6. |
Annual return of deduction of tax under section 194BB from 'Winnings from horse races' |
26BB |
May |
|
7. |
Annual return of deduction of tax under section 194C from 'Payments to any contractor or sub-contractor' |
26C |
June |
|
8. |
Annual return of deduction of tax under section 194D from 'Insurance commission' |
26D |
June |
|
9. |
Annual return of insurance commissions paid/credited during the year without deduction of tax |
26E |
June |
|
10. |
Annual return of deduction of tax under section 194EE from 'Payments in respect of deposits under National Savings Scheme' |
26F |
June |
|
11. |
Annual return of deduction of tax under section 194F from 'Payments on account of repurchase of units by Mutual Fund or Unit Trust of India' |
26G |
June |
|
12. |
Annual return of deduction of tax under section 194G from 'Commission, etc., on sale of lottery tickets' |
26H |
June |
|
13. |
Annual return of deduction of tax under section 194H from 'Commission, brokerage, etc.' |
26-I |
June |
|
[N.B. - Deduction of tax at source under section 194H was applicable during the period 1-10-1991 to 31-5-1992 only]. |
|||
It may be mentioned that if a person fails to furnish, in due time, any of the aforesaid annual returns, he shall be liable to pay penalty under section 272A of the Income-tax Act, at the rate of a minimum of rupees one hundred and a maximum of rupees two hundred per day for the period of default.
6. This may please be brought to the notice of all Disbursing Officers of the Departments of Government of India, State Governments, Public Sector Undertakings, etc. In case any assistance is needed, the Income-tax Officer concerned and/or the Public Relations Officer of the Income- tax Department may please be approached for the same.
7. Copies of this circular are available with the Directorate of Income-tax (RSP & PR), 6th Floor, Mayur Bhawan, Connaught Circus, New Delhi-110001.
(Sd.) V.K. Bhatia,
Director,
Central Board of Direct Taxes.