Use of single TDS challan for all purposes-Analysis of CPC (TDS) Communication dated 10th Sept’ 2014

Use of single TDS challan for all purposes-Analysis of CPC (TDS) Communication dated 10^th Sept’ 2014

                                                                                                By C.A Pratik Anand, ACA

Following communication has been hosted on the CPC (TDS) Website-www.tdscpc.gov.in on 10^th September’2014.

Dear Deductor,

As per the records of the Centralized Processing Cell (TDS), it has been observed that you have used multiple challans in a month, for payment of Tax Deducted.

For Deductor’s convenience, CPC (TDS) has established processing logic in the system that can accept a Single Challan for reporting of Tax Deposited in following circumstances:

·         Payment of Tax Deducted under different sections of the Income Tax Act, 1961:

 • The CPC (TDS) system gives credit of TDS against different sections of the Act, even though a specific section has been quoted in the challan.

 • Example: The challan used for payment of TDS relevant to Section 192 of the Act can also be used for the purpose of reporting tax deposited under Section 194 of the Act also. 

Situation prior to Financial Year 2012-13	Consumption of Challan in TDS Statement on the basis of Section quoted in the Challan details
Situation after Financial Year 2012-13	Section quoted in Challan, at the time of depositing Tax deducted/ collected is irrelevant for the purpose of consumption in TDS Statement.

·         Payment of Tax Deducted for different Assessment Years:

• In case tax has been deposited more than the required tax deducted at source for a particular Assessment Year, the excess amount of tax can be claimed in the following quarters of the relevant year. The balance amount if any, can be carried forward to the next year for claim in the TDS statement. 

 • Example: If excess payment of Tax has been made in Quarter 1 of financial year 2013-14, the same can be used for Quarter 2, 3 & 4 of F.Y. 2013-14 as well as for Q1 to Q4 of F.Y.2014-15. The excess amount of tax paid in Q1 of F.Y.2013-14 can also be used for payment of tax default of Q1 to Q4 of F.Y.2012-13.

·         Different challans used for the purpose of reporting multiple Deductees associated with different branches with same TAN:

 • The deductor may have used multiple challans for reporting multiple deductees associated with different branches, in the TDS Statement.

 • A single challan can be used for the purpose of reporting Tax Deducted for such deductees.
 

• Example: If a Bank has multiple branches with same TAN, payment of Tax Deducted can be made by a single challan and all the deductees can be tagged using the same.

Based on the above information, you may use a single challan in a month towards payment of Tax Deposited.

Analysis of the CPC Communication:

1)      From FY 2012-13 onwards the Section Code quoted in the challan for payment of Tax deducted is no more relevant.

Deductor can quote any Section Code on the challan for payment of TDS under other codes also. There will be no challan mismatch and no consequent tds demands in this case.

Since, the section code is no more relevant therefore CPC (TDS) has introduced a system where a single challan can be used for payment of TDS under different section

codes.

Single Challan can be tagged in the TDS Return for payment of TDS under different sections.

This comes as a welcome relief for many deductors who have to deposit multiple challans for depositing TDS under various sections.

For Example: A Challan of Rs. 10,000/- can be used for payment of Tds U/s 194C of Rs. 4000/- and Tds of Rs. 6000/- U/s 194J.

2)      A single challan can be used for payment of tax deducted at source for multiple financial years.

Excess challan paid in any quarter can not only be used for payment in subsequent quarters of the same financial year but also for subsequent financial years also, if there is unconsumed amount in the challan.

Another welcome step is that unconsumed amount of excess paid challans can also be used for payment demands of raised by CPC for previous or current financial year also.

3)      Another welcome step is the utility for payment a single challan for multiple deductees of different branches of an organization. However, this can be used only if different branches have the same TAN. It is a welcome step particularly for banks having a large number of branches. Now single challan can be used by all branches provided the TAN is same. 

The link for the CPC Communication is as follows:

http://contents.tdscpc.gov.in/en/tdscpc-communication69.html

Hope you find the above information relevant and useful in your daily practice  

The author is a CA in practice at Delhi and can be contacted at: E-mail: capratikanand@gmail.com Mobile: +91-9953199493