TIOL-DDT 90 · the untouched capture
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<html> <head> <title>Untitled Document</title> <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"> </head> <body bgcolor="#FFFFFF"> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#0000CC" size="3">TIOL-DDT 90</font><br> 07 04 2005<br> Thursday</b></font></p> <p align="center"><font color="#006633" size="2" face="Verdana, Arial, Helvetica, sans-serif"> <b>Income Tax – Deduction/ Collection at source – New provisions take effect</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Finance Act (2) 0f 2004 brought in certain changes in respect of tax deducted at source or tax collected at source. Salaried employees used to collect the Form -16 from their employers and submit it along with their IT returns. Now the TDS certificate will be given by the Income Tax authorities or authorised persons. This is how the system is going to work.<br> <br> Employers and others deducting TDS/TCS will submit a quarterly return to the IT authorities by 15th July, 15th October, 15th January and 30th April in the prescribed forms showing the tax deducted/collected at source. The Income Tax authorities or the authorised agencies will give a certificate to all the persons from whom tax has been deducted or collected by the 15th of June. For the tax deducted after 1.4.2005, there is no requirement of giving the Form 16 certificate. The Income Tax department will give that kind of certificate for all the TDS of the assessee.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This system to work properly needs a fully operational computerised accounting system based on the PAN. If I get income as salary, bank interests, royalty, service charges etc, and all those who pay me are required to deduct/collect tax at source, I am required to collect TDS/TCS certificates from all those who pay me and claim all these amounts from my final Income Tax return. Now no such hassle. In June, I go to the ITO and tell him my PAN and lo and behold!, he gives me a certificate showing all the details of TDS collected from me by hundreds of persons all over India who paid me some money during that year. From the total tax payable by me, I simply deduct this already paid tax and with a smile the IT department will accept my return. <br> <br> But it has its hassles. I will now be required to show in my income all the amounts for which TDS has been deducted. I simply cannot escape. Take the case of a transporter. Even now, while he collects charges for his transport, his customers deduct TDS, but he never bothers to collect the TDS certificates from all his clients as he does not disclose his full income. He has a choice to suppress his income and claim deduction of the tax paid only in those transactions which he would like to disclose. But now once he has a certificate from the department of all the tax deducted at source, he is required to account for the whole income and pay tax on it. A wonderful system to plug evasion indeed, but it presupposes certain conditions. An efficient 24 hour networked computer system and proper feeding of data. It is actually not very complex. It is like accessing your bank account in an ATM or the internet. You have a unique PAN and any tax deducted at source is credited to your account, which can be accessed at any of the terminals. So whenever tax is deducted at source from my income in Ranchi or Raipur and when the deductor files his quarterly return that TDS is shown in my account and at the end of the year I am given a statement of the total TDS deducted from my total income earned anywhere in the country.<br> <br> Is the Income Tax ready for this massive job? They outsourced PAN cards to UTI; it is not yet known to whom they are going to entrust this work. This is a beautiful system if it can work properly and is sure to be a Frankenstein if things are not properly organised. The whole system works on the correct feeding of the PAN. What if the person who files the quarterly return does not enter my PAN correctly? How do I get it rectified? The Income Tax authorities are to give me a total TDS statement. Will they send it to my address or should I go and collect it from their office? What happens when my address is changed? What happens in cases where PAN is yet to be allotted? If the DDO or others, who deduct TDS, show my PAN by mistake, will I be asked to pay tax for the income which I never received? How will I prove that I did not receive that income when the return from an employer shows tax deducted from my income? We can only hope that the Income Tax department has answers to all these questions and that their computers are in place. <br> <br> Are chartered accountants going to have better business because of the quarterly returns? They better beware. For a false return they can spend between three months to three years in jail under Section 277 A inserted by the Finance Act 2004!<br> <br> The Government has now notified the rules and forms for these returns. If you are deducting tax, 15th July is not far off, prepare that quarterly return and CAs, don’t sign that return for a small fees – it is risky!<br> <br> <a href="http://www.taxindiaonline.com/RC2/pdfnoti/pdfcbdt/pdf2005/it05not123.pdf">Income Tax NOTIFICATION NO. 123/2005, Dated : March 30, 2005</a><br> <br> <font color="#006633"><b>CBI on the rampage – shock waves across the country<br> </b></font><br> It was like a train accident – you first find out if your relatives are safe. Telephone lines in Government offices were busy throughout the day to know whether your friends were safe – from the CBI raids. All our phones were busy throughout the day with anxious callers wanting to know the names of the people who were raided by CBI. The nation-wide CBI raids coming just two months after the last raid sent shock waves down many a spine. Vittal had brandished the Customs and Central Excise department as one of the most corrupt, but today’s raids proved that other departments were not lagging behind. In fact today’s raids had very few Revenue officials. Customs officers are corrupt, but would you believe postal employees to be caught by CBI? Yes they were caught for fraud in misappropriation of National Savings Certificates and Kisan Vikas Patras to the tune of Rs. 3 Crores. And somebody has been arrested <b>selling CBI identity cards and seals.</b> The CBI hit list toady included, <br> <br> <b>• DGM (Sports) of Air India Mumbai. <br> • Project Officer of BCCL Dhanbad <br> • Executive Engineer, BSNL, Ranchi<br> • Divisional Engineer, Telecom of BSNL Dhumka.<br> • Deputy Commissioner of Income Tax, Hydrabad <br> • Joint Commr. of Income Tax, Mumbai, <br> • Deputy Manager of FCI, Ferozpur, Punjab <br> • General Manger of MTNL, Mumbai <br> • Executive Engr. of MCD New Delhi <br> • CMD of CCL Ranchi <br> • DCP of Delhi Police</b><br> <br> There is a saying in Telugu – <b>only if you are caught, you are a thief.</b> <br> <br> <font color="#FF6666"><b>Until Tomorrow with more of DDT<br> <br> Have a Nice Time<br> <br> Mail your comments to</b></font> <b>vijaywrite@taxindiaonline.com </b><br> </font></p> </body> </html>