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TDS returns to be annual with new formats and form names


As the introduction of new provisions in TDS, such as 24C quarterly return and Form 17 Challan is expected by later 2009-10, further change is expected in periodicity of TDS statements.

Were made from Annual to Quarterly as to Provide Instant Credit to PAN holder
The annual returns were changed to Quarterly statements form 2005-06 financial year. One of the major reasons for changing such periodicity was towards giving credit of TDS to PAN holder. When it was annual return, Deductor was filing the Challan information and deductions, at the end of the year. So in such case, Tax payer was getting the credit of such tax after the end of year, even though the TDS would have been made 12 months ago!!

Quarterly statements speeded up the credit process
Once the returns were change to Quarterly statements, the challans in the statements were getting booked every quarter and respective credit was going to the PAN holder (Deductee). This initiative made department simple to introduce Live Tax statements to PAN holder, by name of Form 26AS. Say, if an employee has paid tax (TDS) through his employer in the month of April, Deductor will remit the tax on May and file the return in July. So, the tax paid in the month of April was credited to PAN holder by July. This was more encouraging, compared to tax paid in April getting credited after next year June, in case of Annual returns!!

Form 17 makes it more instant!!
The new provisions applicable from later 2009-10 introduces Form 17 Challan payment. In this system, Deductor will be mentioning the PAN holder details at the time of challans itself. Take the case of Employee paying tax (TDS) in month of April and further Deductor remitting it in May. Now Form 17 will also take the details of PAN of Employee and subsequently credit will be given to the Employee!! This means, Form 26AS will be updated (with 3 days after payment of Form 17) for every TDS within a Month!!

What is the need of Quarterly Statements?
Now, Form 17 serving the purpose of instant credit to PAN holder, there is no practical need to get Quarterly statement of TDS from deductors.

Powers to CBDT
Till Finance Act (2) of 2009, any change in the periodicity of TDS returns should have been amended through the act. Any amendment in the act could definitely undergo Parliamentary debate and CBDT didn’t had no direct powers to change the periodicity of TDS returns. Observing the new provisions and requirement of CBDT, Finance Act (2) of 2009 gives powers to the CBDT to change the periodicity of TDS returns on its own discretion. Subsequently the words “Quarterly Statements” have been changed to “statements for such period as may be prescribed”.

Need for Annual TDS statement
Will all these scenario, CBDT is all set to change the periodicity of TDS statements to Annual. Such TDS statements are expected to come will little revision in format and also change in Form Names. Current Form names, ending with Q are likely to be changed to Y. Means, probably Form 24Q, 26Q, 27Q, 27EQ are in the verge of getting changed as Form 24Y, 26Y, 27Y and 27EY.

Changes in Annual Returns
The new, yet to be prescribed forms, may also undergo format change, which should get added with UTN, PAN Valid, etc and removed with Section, Surcharge, Cess, etc in Challan details. However the sources confirm that, these returns would continue to be filed at TIN Facilitation Centers.


Purpose of Annual Statements
The annual Statements are expected to serve the following purposes

  1. The details of Annual Statements will be used for correction of TDS credits. This includes the Form 17 Payments uploaded with No-PAN or a Invalid PAN or a PAN belonging to some other person. Such data will be referred through the UTN in the TDS statement.
    1. To make this process smooth, it is expected to increase the PAN limit in the return to 90 to 100%!!
  2. Also the Annual statements filed by the Deductor will be put for fully computerized processing. In such case, the TDS will be recalculated as per prescribed rates and Interest, if any will be calculated there on. This would be considered as Calculation as per Act and total of such will be cross verified with total of TDS Challan Payments of Deductor. Any difference would be refunded to the Deductor or made payable by the Deductor through an intimation.
    1. However, it is said that, if amount is payable, that includes only the Part of Interest for late deduction / late payment. There will not be a request for payment of differential TDS, as it would lead to double taxation during ITR of corresponding Deductee.

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