Guidelines for an employer to deduct TDS and issue Form 16

Following are the guidelines for an employer to deduct TDS and issue Form 16:

  • Make mandatory for all the employees to declare previous salary, investment proofs and TDS details, if any.
  • Employer has to consider the declaration before deducting TDS from salary.
  • Fill Annexure II for all employees who work or worked for any period of time during the current financial year.
  • Issue Form 16 to all the employees whose TDS was deducted.
  • It is the duty of an employee to provide valid PAN. If employee has worked with more than one employer in a financial year, employee should declare previous salary and TDS detail, if any, with the current employer.

Source: TRACES

Analysis of File Validation Utility (FVU) Version 5.0

The Income Tax Department has released the new File Validation Utility (FVU) Ver. 5.0 on 13th April 2016 and is applicable for all TDS Returns & Correction Statements filed from the same date onwards.

Highlights and its analysis are summarized below:

Changes is Form 26Q (TDS Returns for Non-Salary)

  • The applicability of value ‘B’ in the ‘Remarks’ (No Deduction / Lower Deduction) has been extended to include Section Code 192A (Payment of accumulated balance due to an employee). This had been a past anomaly which has now been taken care of.
  • Section Code ‘194IA’ for ‘Payment on certain immovable property other than agricultural land’, which was earlier reported in Form 26QB through NSDL website, has now been included in Form 26Q as well.

Validation of Tax Account Number (TAN) and TAN Name

  • The FVU will now validate the TAN as per the Department’s records through the CSI file (Challan Status Inquiry) and that appearing on the TDS / TCS Return Statement. Mismatch in TAN is not acceptable and the FVU will reject it with appropriate message. Similarly, TAN Name will also be validated as in the CSI file with that provided on the TDS / TCS Return Statement. In case of mismatch, the message will be displayed accordingly. It is important to have the same name in TDS Statements as that on records with the Income Tax Department.

Other Changes

  • It is now mandatory to provide an Email ID for Deductor / Collector or the Responsible Person. The FVU will reject, if at least one Email ID is missing.
  • It is now mandatory to provide the Mobile No. of the Responsible Person.

Analysis of File Validation Utility (FVU) Version 5.0

The Income Tax Department has released the new File Validation Utility (FVU) Ver. 5.0 on 13th April 2016 and is applicable from all TDS Returns & Correction Statements filed from the same date onwards.

Highlights and its analysis are summarized below: 

Changes is Form 26Q (TDS Returns for Non-Salary)

  • The applicability of value ‘B’ in the ‘Remarks’ (No Deduction / Lower Deduction) has been extended to include Section Code 192A (Payment of accumulated balance due to an employee). This had been a past anomaly which has now been taken care of.
  • Section Code ‘194IA’ for ‘Payment on certain immovable property other than agricultural land’, which was earlier reported in Form 26QB through NSDL website, has now been included in Form 26Q as well.

Validation of Tax Account Number (TAN) and TAN Name

  • The FVU will now validate the TAN as per the Department’s records through the CSI file (Challan Status Inquiry) and that appearing on the TDS / TCS Return Statement. Mismatch in TAN is not acceptable and the FVU will reject it with appropriate message. Similarly, TAN Name will also be validated as in the CSI file with that provided on the TDS / TCS Return Statement. In case of mismatch, the message will be displayed accordingly. It is important to have the same name in TDS Statements as that on records with the Income Tax Department.

Other Changes

  • It is now mandatory to provide an Email ID for Deductor / Collector or the Responsible Person. The FVU will reject, if at least one Email ID is missing.
  • It is now mandatory to provide the Mobile No. of the Responsible Person.