|
| TDS: Changes coming your way |
| Arnav Pandya / Mumbai Jun 20, 2010, 00:48 IST |
|
New rules have been introduced on Tax Deduction at Source (TDS), the latest in a set of recent changes. This will impact the manner in which individuals deal with their TDS certificates.
There have been changes that will impact a lot of procedural areas. One set of aspects will impact those deducting the tax and paying this to the government. The other impact will be on the person whose amount is deducted. This will include everyone from salaried individuals to professionals and even companies. The changes take effect for tax deducted after April 1, so the changes will be visible soon. Here are some important points that will impact actions, going forward.
QUARTERLY CERTIFICATES
Currently, all individuals are comfortable with the system whereby there is a single TDS certificate issued by the deducting entity, once the financial year is over. This means an individual has to ensure getting the certificate for the total tax deducted from each person or entity deducting the tax and this activity starts after the end of the financial year and before the income tax return is filed.
This process is to get slightly complicated, as the certificate for tax deducted on all payments other than salary would have to be given every quarter. The plus point here is that the individual will get the tax deduction details on a regular basis. Any discrepancies or mistakes in these can be known clearly and at an early stage.
The problem is that the total number of certificates during the year can go up significantly, especially for someone with a lot of TDS. Getting all the details together will be tough and then maintaining the details would also involve effort.
NEW NUMBER
The TDS certificate issued has a lot of details. This includes the Permanent Account Number (PAN) of the person whose tax is deducted, plus the Tax Deduction Number (TAN), plus PAN of the person making the deduction and the payment details. A new detail to find a place will be the receipt number of the TDS return filed by the person making the deduction. This number becomes a distinguishing point for the certificate and its presence is important, so individuals have to check whether the one issued to them has it.
FORM 16
The biggest visible change will be for the salaried, as they will get a new format for Form 16. The form has now been divided into two parts, instead of the single part present earlier. The form will have a Part A and a Part B, useful when the individual has more than one employer during the year. Currently, problems often crop up when such a situation is present, as several figures are not reflected properly.
The presence of Part A and Part B means that in case of multiple employers, each will have to fill in Part A of the form. This will be the overall detail of the tax deducted. Part B is the break-up of the manner in which the income is earned and the deductions taken to arrive at the final figure. Hence, the individual benefits by ensuring the latter part is filled
The writer is a certified financial planner
|
|
|
|
|
|
|
|
|
|
 Read Business news in |  |
|
|
|
|
|
|
Advertisements |
|
|
|
|
|
|
|
|
|
Content Guide
