ISSUANCE OF CERTIFICATE FOR TAX DEDUCTED AT SOURCE IN FORM NO. 16 IN ACCORDANCE WITH THE PROVISIONS OF SECTION 203 OF THE INCOME-TAX ACT, 1961 READ WITH THE RULE 31 OF THE INCOME-TAX RULES 1962

CIRCULAR NO.: 04/2013

DATE: 17/04/2013

Section 203 of the Income-tax Act 1961 read with the Rule 31 of the Income-tax Rules 1962 stipulates furnishing of certificate of tax deduction at source (TDS) by the deductor to the deductee specifying therein the prescribed particulars such as amount of TDS, valid permanent account number (PAN) of the deductee, tax deduction and collection account number (TAN) of the deductor, etc.

The relevant form for such TDS certificate is Form No. 16 in case of deduction under section 192 and Form No. 16A for deduction under any other provision of Chapter XVII-B of the Act.

TDS certificate in Form No. 16 is to be issued annually whereas TDS certificate in Form No. 16A is to be issued quarterly. TDS Certificate in Form No 16 as notified vide Notification No. 11/2013 dated 19.02.2013 has two parts viz Part A and Part B (Annexure). Part A contains details of tax deduction and deposit and Part B (Annexure) contains details of income.

With a view to streamline the TDS procedures, including proper administration of the Act, the Board had issued Circular No. 03/2011 dated 13.05.2011 and Circular No. 01/2012 dated 09.04.2012 making it mandatory for all deductors to issue TDS certificate in Form No. 16A after generating and downloading the same from “TDS Reconciliation Analysis and Correction Enabling System” or, previously called TIN website. In exercise of powers under section 119 of the Act, the Board has now decided as following:-

1.   ISSUE OF PART A OF FORM NO. 16 FOR DEDUCTION OF TAX AT SOURCE MADE ON OR AFTER 01.04.2012:

All deductors (including Government deductors who deposit TDS in the Central Government Account through book entry) shall issue the Part A of Form No. 16, by generating and subsequently downloading through TRACES Portal, in respect of all sums deducted on or after

the 1st day of April, 2012 under the provisions of section 192 of Chapter XVII-B. Part A of Form No 16 shall have a unique TDS certificate number.

2.   AUTHENTICATION OF TDS CERTIFICATEIN FORM NO. 16:

The deductor, issuing the Part A of Form No. 16 by downloading it from the TRACES Portal, shall, before issuing to the deductee authenticate the correctness of contents mentioned therein and verify the same either by using manual signature or by using digital

Signature in accordance with sub-rule (6) of Rule 31.

In other words, Part A of Form No. 16 shall be issued by all the deductors, only by generating it through TRACES Portal and after duly authenticating and verifying it.

‘Part B (Annexure)’ of Form No. 16 shall be prepared by the deductor manually and  issued to the deductee after due authentication and verification along with the Part A of the Form  No. 16 stated above.

Sub rule (3) of rule 31of the Rules sets the time limit for issuance of Form 16 by the deductor to the employee. Currently, Form 16 should be issued by 31st May of the financial Year immediately following the financial year in which income was paid and tax deducted.

Regards

CA. Mona Singhal

Partner

Arpit Gupta & Associates

Chartered Accountants

701, Nirmal Tower,

26, Barakhamba Road,

Connaught Place, Delhi-110001

Mobile:- +91-9873082769 

Website: www.caaga.co.in