CBDT - INSTRUCTION NO. 8/2010 and INSTRUCTION NO. 9/2010

CBDT - INSTRUCTION NO. 8/2010 and INSTRUCTION NO. 9/2010

Section 200 of the Income-tax Act, 1961 - Deduction of tax at source - Duty of person deducting tax - Instruction regarding parameters for processing of E-TDS Returns

INSTRUCTION NO. 8/2010 [F.NO. 275/73/2009-IT(B)], DATED 8-12-2010

In the present system of processing of e-TDS returns, the returns are processed online and mismatch report showing defaults on various accounts is generated. Based on this mismatch report, the assessing officers issue show-cause notices to the deductors and take follow up actions.

2. It has come to the notice of the Board that substantial number of TDS returns are pending where the deductee-wise default on account of short deduction of tax is less than Rs. 10.

3. This issue has been considered by the Board and it has been decided that:

(i) where the default on account of short deduction is less than Rs.10 for each deductee, the demand is round off to zero; and

(ii) after considering (i) above, deductor-wise demand/default, if any, of Rs.100 or less will also be ignored for further action.

4. However, the DDOs in such cases may be warned to be careful in future so as to ensure that they do not become habitual in short deduction of tax.

5. Earlier Instruction No. 11/2007, dated 18-12-2007 issued under F. No. 385/56/2007-IT(B) on the subject stands superseded by this instruction.

6. These instructions shall apply to all TCS/TDS cases under all Direct Tax Enactments. These instructions will come into force immediately.

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Section 143 of the Income-tax Act, 1961 - Assessment - General - Clarification regarding processing of ITR-1 and ITR-2 returns - Credit for tax deducted at source for A.Y. 2009-10

INSTRUCTION NO. 9/2010 [F. NO. 225/25/2010/IT (A-II)], DATED 9-12-2010

1. Reference may be made to Board's Instruction No. 7, dated 16-8-2010 in which it has been stated, inter alia, that in cases where the return is filed in ITR-1 and ITR-2 for the A.Y. 2009-10, and where the TDS claim does not exceed Rs. three lakh and where the refund computed does not exceed Rs. Twenty five thousand, the TDS claim of the taxpayer shall be accepted at the time of processing of the returns provided the TDS payment reported in AS-26 is more than Rs. zero.

2. Board has reconsidered the above instruction and it has been decided to increase the limit of TDS claim from Rs. three lakh to Rs. four lakh as was applicable for the A.Y. 2008-09. It is further clarified that if the limit of Rs. four lakh, or Rs.25,000 is exceeded in case of a return filed in ITR-1 and ITR-2 or there is nil matching with AS-26 statement, the credit should be allowed by the Assessing Officer after make 'due verification'. This verification may be done in the same manner as was being done in the earlier years.

3. This may be brought to the notice of all the Assessing Officers in your region for immediate compliance.