Tax Talk

SANJIV CHAUDHARY | Updated on July 20, 2013 Published on July 20, 2013

Investment made under the Senior Citizens Savings Scheme 2004 iseligible for deduction up to a maximum of Rs 1 lakh.

Sanjiv Chaudhary

For financial year 2012-13, I worked as a consultant with a private limited company. According to form 26AS (print taken on July 10, 2013) the party has not deposited TDS amount for 4th quarter with income tax and has not issued Form16A to me for the quarter. What should I do?

- Nirmal

Under the Income-tax provisions, it is mandatory for all the deductors to furnish a certificate of tax deduction at source (TDS) 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, to the deductee.

The relevant form for such TDS certificate is Form 16A (to be issued quarterly) in case of tax deduction from payments other than salary.

Further, details of tax deducted will appear in your Form 26AS only after the submission of the quarterly TDS statement to the Income tax authorities by the corresponding deductor.

In case the amount appearing in the Form 26AS is not correct or is omitted, the deductor should be approached to ensure filing of the quarterly TDS statement with correct PAN and tax details. Further, according to the directions of the Central Board of Direct Taxes, it is mandatory for all deductors to issue TDS certificate in Form 16A as generated from Tax Information Network of Income Tax Department i.e. TRACES (TDS Reconciliation, Analysis and Correction Enabling System).

Therefore, you should insist on a Form 16A that has been downloaded from TRACES only. In case the deductor does not issue the Form 16A by the due date, he/she shall be liable to pay a penalty to the tax department of Rs 100 per day for every day for which the default continues.

We wish to highlight that recently the Delhi High Court, on its own motion, issued remedial directions to the tax department to remove the hardships faced by taxpayers while claiming Tax Deducted at Source (TDS) credit.

The High Court observed that the rejection of TDS or failure to get credit of TDS puts the taxpayers to needless harassment, inconvenience and costs.

The High Court has directed the department, that the taxpayer as a deductee should not suffer because of the fault made by deductor or inability of the tax department to ask the deductor to rectify the details. Once payment has been received by the tax department, credit should be given to the taxpayer. The High Court directed that CBDT shall issue such suitable directions in this regard.

Please clarify as to whether one deposit of Rs 15 lakh made under the Senior Citizens Savings Scheme 2004 (duration 5 years) is eligible for deduction u/s 80C (Rs 1 lakh) every year till its maturity.

- S. Krishnan

Under section 80C of the Income-tax Act,1961, investments made during the year in an account under the Senior Citizens Savings Scheme Rules, 2004 shall be allowed as deduction under the overall deduction limit of Rs 1,00,000 (this limit is for deduction under sections 80C, 80CC and 80CCD).The deduction is limited to amount invested during a particular financial year. Therefore, the investment of Rs 15 lakh made by you under the Senior Citizens Savings Scheme 2004 is eligible for deduction u/s 80C up to a maximum of Rs 1,00,000 only during the financial year in which the investment is made and not in the subsequent years.

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Published on July 20, 2013
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