By going online, you can make tax deduction at source a smoother, more beneficial process
Tax Online
- Step 1 Go to http://www.incometaxindia.gov.in/ Click on “View your tax credit” to begin registration process
- Step 2 Follow instructions to register. The process is similar to opening an email account
- Step 3 Pay attention while keying-in your PAN: this is very important
- Step 4 Once registration is successful, save and print the acknowledgment form for future reference
- Step 5 Registration has to be authorised by TIN-FC, who'll contact you within 24 hours of your registering
- Step 6 If you aren't contacted for more than 5 days, call 020-2721 8080 or send an email
- Step 7 At the time of verification, carry the PAN card along with a photocopy and other documents
- Step 8 The website will have a list of documents required for verification that you will need to produce
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Earning money and paying taxes go hand-in-hand, though sometimes this order could reverse. Your monthly paycheque is a fitting example of tax deducted at source (TDS). For long-time taxpayers, TDS is nothing new. But a friend who was appalled to see a hefty sum slashed away from his deserved prize money has been questioning this concept since.
Well, there are certain cases where it is mandatory to set aside a portion of your income as taxes even before you receive it (see Different Slabs). By deducting tax at source, the government is being cautious that it doesn’t miss out on tax revenues from these incomes. Though it seems like you are getting a smaller amount, TDS could simplify the tax return filing process a bit. Take the case of Akash, a property consultant whose income comes from fees. His receipts for 2009-10 totalled to Rs 7.45 lakh and had a TDS credit of Rs 72,000. He missed filing tax returns on the 31 July. But since TDS is deducted for a good portion of income, his tax liability on the due date is vastly reduced, and penalty, if any, may not be too high either.
There are, however, some aspects to take note of while filing your taxes. We take a look at the process involved and how you can make online TDS filing convenient and beneficial.
Paying attention
If you fail to provide your Permanent Account Number (PAN) where it is mandatory, tax will be deducted at a much higher rate (20 per cent). So you’ll have to chase the tax authorities for refund, which could be a time-consuming task.
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| Deductors must issue TDS certificates, proofs that tax has been deducted as well as credited | |
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Second, while quoting the PAN, cross-check it. For a quick test, the fifth letter of the PAN should be the first letter of your surname. If PAN is misquoted, tax will still be deducted, but you don’t get credit for it. It could go to another account. Assume this discrepancy goes unnoticed; you may have to pay tax on such income once again.
But if detected, approach the deductor and provide the correct number. In case of bulk entries, say bank interest, a back-dated rectification may not be possible. But if there are limited entries, you can request the deductor to rectify the mistake.
Tax deductors are obligated to issue TDS certificate, a proof that tax has been deducted and credited to your account. In case of salary, the certificate is Form 16 and for other receipts, Form 16 A. Collect these certificates; they are crucial while filing the return of income. Check whether the details mentioned in them are correct. An important field in the certificate is the deductor’s TAN. Every person deducting TDS needs to possess TAN or Tax Deduction Account Number, which authorises him to deduct taxes at source.
Going online
When TDS is limited to one or two receipts, keeping a tab on them could be easy. But as the complexity increases, tracking these deductions could become a very tiresome process, depending on your profession or occupation. For example, a self-employed professional servicing many clients will get receipts throughout the year and from a wide range of clients. Hence, it could get tough for him to track the multiple tax deductions. To simplify the process and make it efficient, he can track these deductions online.
Different Slabs
Refunds would be much faster if the credit
matches your claim |
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About two years ago, the Income Tax Department introduced this facility on its website (
www.incometaxindia.gov.in). An official from Tax Information Network, which extends this service, said that though the facility was made available two years ago, it is only of late that more people using it. Increasing awareness about e-filing of tax returns has led to more takers for this option, he added. Supplementing this, Chetan M. Shah, a Mumbai-based chartered accountant, says: “E-TDS has just come into play. So Form 26AS (viewing tax credit online) will assume more sanctity from here on.”
You will need to use your unique PAN card to register for this online service (see Tax Online).
At the time of registration, make sure you are providing the correct PAN. Keep a printed copy of the acknowledgment you get upon successful registration for future reference. The process is complete only when an official from the Tax Information Network’s Facilitation Center (TIN-FC) authorises your PAN.
You can either visit the nearest TIN-FC and get it authorised by paying Rs 15, or you can ask a representative to visit your residence or workplace for authorisation. The second option will cost Rs 100 and a TIN-FC will contact you within 24 hours of receipt of your request to fix up an appointment. Once the verification is over, it could take 3-4 days for the final registration to conclude and a little longer for you to be informed.
Latest offering
In addition to the existing facility, taxpayers can view their Tax Credit Statement (or Form 26AS) using their Internet banking accounts. To avail this facility, the PAN card holder needs to have a Net banking account with an authorised bank, where the tax credit statement is mapped to the account number and the taxpayer can access this data through his Net banking account.
At present, only seven banks in the country—Citibank, Corporation Bank, IDBI Bank, Indian Overseas Bank, SBI, State Bank of Mysore and Union Bank of India—are permitted to extend this facility to their customers.
How it works
Form 26AS is divided into three parts. Part A contains data relating to TDS. This includes details about the deductor (name and TAN), the particular section under which deduction was made, date of payment, amount paid or credited, tax deducted from payments and deposited in the bank among others.
Part B has details of tax collected at source. This is relevant for those running a partnership or sole-proprietary concern and are making remittances that attract TDS provisions.
Part C has information on income tax paid directly (example: advance tax, self assessment tax) and details of the challan through which payments were made.
Advantages
Form 26AS acts like a one-stop shop for all your tax related information. As you receive income (or make payments), it leaves a TDS trail. If a TDS credit is not reflected, you can immediately check with the person concerned and take steps to resolve the matter quickly.
The other major advantage with this process is, at the time of filing your return, it becomes easy to assess exactly how much tax needs to be paid. Getting a refund also becomes quicker. “Refunds would be much faster if the credit matches your claim in the income tax return,” suggests Manoj Yadav, co-founder, www.taxspanner.com, an e-filing website.
Since your tax details are in the public domain, guard it against intrusion, just like your e-mail. Don’t share your username and password, and change the password periodically.
hamsini AT outlookindia.com
