The person who deducts TDS issues a Form to the deductee which is called a TDS certificate. It shows the particulars of payment, the date of tax deducted at source and the date of its credit to the Government.
On the basis of this certificate, the taxpayer can claim the credit and the refund (if any). Form 16 and Form 16A are the TDS certificates. TDS certificate is downloaded from TRACES (TDS Reconciliation Analysis and Correction Enabling System of the Income tax department). The deductee should check the details on the certificate and verify the digital signature certificate.
Importance of TDS certificate
Cross checking with Form 26AS
An annual tax credit statement is generated by the IT department as Form 26AS. The statement provides the details about the Name & PAN of the deductee, Name & TAN of the deductor, Amount paid or credited, TDS amount, the amount of TDS deposited with the Government, etc.
TDS certificates and Form 26AS can be used to cross check in case of any mismatch. On obtaining the TDS certificates, it can be verified whether the tax deducted has actually been received by the government by comparing it with Form 26AS. TDS deduction is always shown in Form 26AS after filing the return and issuing Form 16/16A.
Separate TDS certificate for each income
- Form 16 certificate is issued to the salary income people annually.
- Form 16A certificate is issued to the non-salary income quarterly.
The TDS certificate shows the income earned by the person. In case, if TDS deduction is not reflecting in Form 26AS then Form 16/16A are proof of TDS deduction.
Substantial during scrutiny
If returns filed by the individuals are subject to Scrutiny Assessment by the Income Tax Department then the individual has to show the TDS certificate to the IT department. If TDS deduction is not updated in the Form 26AS then TDS certificate is the proof of deduction.
Crucial for salaried persons
It is important for the salaried persons to collect their TDS certificate, as it is a prerequisite for filing ITR return. Form 26AS does not show the breakup of income and the details of deductions that are claimed under the sections 80C, 80D, 80G up to 80U which are available in Form 16.
From the above discussion, we conclude that it is essential for the taxpayers to collect TDS certificates from their dedcutors on time.
Time limit and Penalty
The time limit for the issuance of TDS certificates is set by the IT Department. If the employer not able to produce the certificate within due date shall, then a penalty of Rs. 100 per day of delay per certificate (penalty cannot exceed the TDS amount deducted).
In case you are confused about TDS Return Filing as a deductor, feel free to consult the experts at LegalRaasta. You can get comprehensive assistance with our TDS Return Filing Software which supports TDS on Salary payments (Form 24Q), Rent, Interest, Commission and other Non-salary transactions (Form 26Q), NRI (Form 27Q) and TCS (Form 27EQ).