Analysis of File Validation Utility (FVU) Version 4.7

NSDL department recently released FVU 4.7 and introduced following changes:

I.  New Sections 192A & 194LBB introduced

Section 192A: TDS deducted against payment of accumulated balance due to an employee made by the trustees of the Employees’ Provident Fund Scheme, 1952

As per the notification number WSU/6(1)2011/IT/Vol-IV/5931 released by EPFO on 21st May 2015 a new section 192A has been inserted regarding payment of accumulated provident fund balance due to an employee.

This section is valid for all payments done after 1st June 2015.

According to this notification, TDS will be deducted at following rates at the time of payment of accumulated balance:

  1. TDS will be deducted at 10% in case PAN is provided.
  2. TDS will be deducted at 34.608% in case PAN is not provided.

However, TDS will not be applicable for the either of the following:

  1. In case payment is less than ₹ 30,000
  2. If employee withdraws PF after a period of 5 years continuous service
  3. In case Employee has submitted Form 15H / 15G
  4. In case PF is transferred from one account to another
  5. If service is terminated due to ill health
  6. In case employer has discontinued its business

Further, Form 15G and Form 15H will not be accepted in case payment is more than Rs. 2,50,000 and Rs. 3,00,000 respectively.

Section 194LBB: Income in respect of units of investment fund

According to this section, TDS shall be deducted at 10% for payments made to a unit holder in respect of units of an investment fund specified in Clause(a) of the Explanation 1 to Section 115UB.

This income should be other than that proportion of income which is of same nature as income referred to in clause (23FBB) of section 10.

This section is applicable from 1st June 2015.

II.   Remark ‘T’ now applicable from Q3 of FY 2009-10

Remark ‘T’, which is quoted for payment made to Transporter where TDS deducted is NIL, is now applicable from Q3 of FY 2009-10. Earlier this remark was applicable from FY 2010-11 onwards.

III.   Total tax Deducted & Tax Deposited should now be same

Following 2 columns are present in Deductee record / Annexure (I) entry:

Total Tax deducted = TDS + Surcharge + Cess

Tax Deposited: Total Tax deposited for the deductee

Although the total tax deducted and deposited is same, yet earlier department allowed these values to be different which was leading to unwarranted confusion and ambiguity. This has now been rectified.

Now it has become mandatory to ensure that both these value are identical.

IV.   Correction of records marked with Higher Rate ‘C’ Flag

If proper PAN is not provided by the vendor to the company who is making the payment, then tax is deducted at higher rate (minimum 20%) and while entering this record in TDS Return, ‘C’ flag is marked against it.

Earlier, there were restrictions in corrections of these records and only limited columns were allowed to be changed i.e. PAN quoted, date of payment, amount of payment & Tax deposited.

Now as per the new regulations, all the fields except Total tax deposited and Higher rate flag can be corrected. Following columns can be corrected in this case:

  • Name of deductee (Applicable to all Forms)
  • PAN of the deductee (Applicable to all Forms)
  • Payment Date of the deductee (Applicable to all Forms)
  • Tax Deposited for the deductee (Applicable to all Forms)
  • Date of deduction (Applicable to all Forms)
  • Section code (For statements pertains to FY 2013-14 onwards and to all Forms)
  • Nature of remittance (Applicable only for Form 27Q)
  • Unique acknowledgement of the corresponding form no. 15CA (if available) (Applicable only for Form 27Q)
  • Country of Residence of the deductee (Applicable only for Form 27Q)
  • Grossing up indicator (Applicable only for Form 27Q)

Note: For correcting records marked with higher rate flag, total tax deducted cannot be modified and total deposited can be modified.

So the rule of keeping Total Tax deducted and Tax deposited same does not apply to correction of records marked with ‘Higher rate’ flag.

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