TRACES (TDS Reconciliation Analysis and Correction Enabling System) // Question and Answer Of PAN // SUNIL RAJAI //

TRACES (TDS Reconciliation Analysis and Correction Enabling System)
Question and Answer Of PAN

Question (1) : What is PAN?
Answer : Permanent Account Number (PAN) is a ten-digit alpha-numeric number, issued by the Income Tax Department. Each assessee (e.g., individual, firm, company, etc.) is issued a unique PAN.
PAN enables department to link all transactions of the 'person' with the department. These transactions include tax payments, TDS / TCS credits, returns of income / wealth / gift / FBT, specified transactions, correspondence, etc. PAN, thus, acts as an identifier for the 'person' with the tax department.
• PAN structure is as follows: AAAAA9999A. First five characters are letters, next four are numerals, last is a character letter
• If PAN does not follow the above structure, PAN will be shown as invalid
• The fourth character of the PAN must be one of the following, depending on the type of assessee:
C - Company
P - Person
H - HUF (Hindu Undivided Family)
F - Firm
A - Association of Persons (AOP)
T - AOP (Trust)
B - Body of Individuals (BOI)
L - Local Authority
J - Artificial Judicial Person
G - Government
• The fifth character of the PAN is the first character of the surname / last name of the person (in case of personal PAN card, the fourth character is "P") or of the name of Entity / Trust / Society / Organisation

Question (2) : Deductee is foreigner and does not have PAN. Do I need to deduct TDS?
 Answer : Yes. Any person who intends to enter into economic or financial transactions where quoting PAN is mandatory, must also have a PAN. In case the person does not have PAN, tax should be deducted at the rate of 20% or higher.

Question (3) : What happens if I have quoted incorrect PAN in the tax payment challan used for depositing my advance / self-assessment tax?
Answer : In such cases, your tax payment details will not be reflected in Form 26AS. It is important for you to correctly state your PAN in the tax payment challan. For correction in challan within 7 days, you need to approach the bank and after 7 days, you may approach the jurisdictional assessing officer.

Question (4) : Can a foreign citizen apply for a PAN? If yes, which form should be used?
Answer : Yes. A foreign citizen can apply for a PAN by submitting Form 49AA at www.tin-nsdl.com.

Question (5) : PAN provided by deductee is invalid, Can deductor deduct TDS on higher rate along with surcharge?
Answer : In case of invalid PAN, TDS along with surcharge (in case applicable) should be deducted at higher rate.

Question (6) : What is PAN verification?
Answer : This functionality helps deductor in verifying whether the PAN provided by the deductee (Tax Payer) is valid as per Income Tax Department database.

Question (7) : How can I verify the PAN?
Answer : Login to TRACES as deductor and click on ‘PAN Verification’ under ‘Statements / Payments’ tab. Enter PAN and select Form Type and proceed. Status of the PAN (whether valid / invalid) and name of PAN holder will be displayed as per PAN database.

Question (8) : What should I do for an error 'This type of correction can be performed only once for this statement' at the time of filing correction for change of PAN?
Answer : Correction of valid PAN to valid PAN can be performed only once. If you have consumed all your attempts, you need to deposit short deduction default amount and file correction to close the defaults.

SOURCE : TDSCPC Best Regards,
- SUNIL RAJAI

TRACES (TDS Reconciliation Analysis and Correction Enabling System) Question and Answer Of Taxable Income

TRACES (TDS Reconciliation Analysis and Correction Enabling System)
Question and Answer Of Taxable Income

Question (1) : I own shares of various Indian companies and receive dividends. Is it taxable?
Answer : No. Dividend declared by Indian companies is not taxable in the hands of the shareholders because taxes on distributed profits have already been borne by the company.

Question (2) : How does the Government collect Income Tax?
Answer : Taxes are collected by three means:
1) Voluntary payment by persons into various designated Banks. For example, Advance Tax and Self-Assessment Tax
2) Tax Deducted at Source (TDS) on your behalf from the payments receivable by you
3) Tax Collected at Source (TCS) on your behalf at the time of spending. It is the constitutional obligation of every person earning income to compute their income and pay taxes correctly

Question (3) : What is the procedure for depositing tax?
Answer : A form called challan available at Income Tax Department, in banks and on the IT department website should be filled up and deposited in the bank along with the money. Taxes can also be paid online.

Question (4) : I am a small time trader. Do I need to maintain any accounts?
Answer : Any business or profession that has an annual turnover / gross receipts exceeding rupees ten lakh and net profit of rupees one lakh twenty thousand must maintain such books of account and documents from which its income can be reasonably ascertained by the department.

Question (5): Where should the books of account of my business be kept and for how long?
Answer : All the books of account and related documents should be kept at the main place of business, i.e., where the business or profession is generally carried on. These should be preserved for a minimum of six years.

Question (6) : Do I have to keep an accountant to maintain my account?
Answer : This depends upon your ability and need. You may even prefer to use the accounting software available in the market. However, you should remember that in case of turnover exceeding rupees forty lakh per annum in a business and gross receipts exceeding rupees ten lakh per annum in a profession, a professional charted accountant must audit your accounts.

Question (7) : What is meant by audit of books of account?
Answer : Auditing means checking the correctness and genuineness of your accounts and verifying whether accounting principles and standards have been properly followed in conduct of your business and preparation of accounts. Under Income Tax Act, this verification will have to be carried out by an independent Chartered Accountant.

Question (8) : In my business, it is impossible to issue bills for every transaction. How can I be expected to maintain proper accounts?
Answer : There can be no excuse for not maintaining bill books. However, if you are a small time retail trader with your annual turnover less than 40 lakhs, then you are permitted to declare your income on presumption at 5% of your actual sales (u/s 44AF). In this case, no books of account need be maintained. Similarly, the benefit of non-maintenance of books of account is available for civil contractors [u/s 44AD] in case 8% of the turnover is disclosed as profits. Transporters owning less than ten goods carriage can also avail the benefit of presumptive income scheme without maintenance of books of account. However, if you declare your income below the minimum level / percentage provided under the scheme, you will necessarily have to maintain the books and get them audited.

SOURCE : TDSCPC Best Regards,
- SUNIL RAJAI

TRACES (TDS Reconciliation Analysis and Correction Enabling System)
Question and Answer Of Taxable Income

Question (1) : I own shares of various Indian companies and receive dividends. Is it taxable?
Answer : No. Dividend declared by Indian companies is not taxable in the hands of the shareholders because taxes on distributed profits have already been borne by the company.

Question (2) : How does the Government collect Income Tax?
Answer : Taxes are collected by three means:
1) Voluntary payment by persons into various designated Banks. For example, Advance Tax and Self-Assessment Tax
2) Tax Deducted at Source (TDS) on your behalf from the payments receivable by you
3) Tax Collected at Source (TCS) on your behalf at the time of spending. It is the constitutional obligation of every person earning income to compute their income and pay taxes correctly

Question (3) : What is the procedure for depositing tax?
Answer : A form called challan available at Income Tax Department, in banks and on the IT department website should be filled up and deposited in the bank along with the money. Taxes can also be paid online.

Question (4) : I am a small time trader. Do I need to maintain any accounts?
Answer : Any business or profession that has an annual turnover / gross receipts exceeding rupees ten lakh and net profit of rupees one lakh twenty thousand must maintain such books of account and documents from which its income can be reasonably ascertained by the department.

Question (5): Where should the books of account of my business be kept and for how long?
Answer : All the books of account and related documents should be kept at the main place of business, i.e., where the business or profession is generally carried on. These should be preserved for a minimum of six years.

Question (6) : Do I have to keep an accountant to maintain my account?
Answer : This depends upon your ability and need. You may even prefer to use the accounting software available in the market. However, you should remember that in case of turnover exceeding rupees forty lakh per annum in a business and gross receipts exceeding rupees ten lakh per annum in a profession, a professional charted accountant must audit your accounts.

Question (7) : What is meant by audit of books of account?
Answer : Auditing means checking the correctness and genuineness of your accounts and verifying whether accounting principles and standards have been properly followed in conduct of your business and preparation of accounts. Under Income Tax Act, this verification will have to be carried out by an independent Chartered Accountant.

Question (8) : In my business, it is impossible to issue bills for every transaction. How can I be expected to maintain proper accounts?
Answer : There can be no excuse for not maintaining bill books. However, if you are a small time retail trader with your annual turnover less than 40 lakhs, then you are permitted to declare your income on presumption at 5% of your actual sales (u/s 44AF). In this case, no books of account need be maintained. Similarly, the benefit of non-maintenance of books of account is available for civil contractors [u/s 44AD] in case 8% of the turnover is disclosed as profits. Transporters owning less than ten goods carriage can also avail the benefit of presumptive income scheme without maintenance of books of account. However, if you declare your income below the minimum level / percentage provided under the scheme, you will necessarily have to maintain the books and get them audited.

SOURCE : TDSCPC Best Regards,
- SUNIL RAJAI

TRACES (TDS Reconciliation Analysis and Correction Enabling System) // Question and Answer Of TDS // MONARCH // SUNIL RAJAI

TRACES (TDS Reconciliation Analysis and Correction Enabling System)
Question and Answer Of TDS

Question (1) :What is TDS?
Answer : TDS means 'Tax Deducted at Source'. TDS is one of the modes of collection of taxes, by which a certain percentage of the amount is deducted by a person at the time of making / crediting certain specific nature of payment to the other person and the deducted amount is remitted to the Government Account.

Question (2) : Is TDS relevant for me as a businessman?
Answer : Yes. Payments may be made to you after TDS. You can adjust this against your final tax liability. You are also required to effect TDS while making business payments. Failure to do so will result in the entire of expenditure being disallowed as your business expenditure and taxed as income.

Question (3) : I have made some deposits with a bank on which annual interest is around 15000. My income is below the taxable limit. The banker wants to deduct tax. What do I do?
Answer : You can file a self-declaration to the banker in Form 15H stating that your income is below taxable limit. The form is available with your banker, the local Income Tax office and can be downloaded from the website www.incometaxindia.gov.in This form should be filed before the interest begins to accrue in the fixed deposit account since the declaration has no retrospective effect.

Question (4) :I have let out a property for 20,000 per month. The tenant is deducting tax that is more than my tax liability. What can I do under this circumstance?
Answer : you compute your tax liability and find it to be lower than the tax being deducted, you may approach your Assessing Officer by filing Form 13. He will issue a certificate directing the tenant to make TDS at a lesser rate. This form is available with the local Income Tax office or can be downloaded from the website www.incometaxindia.gov.in

Question (5): I have deducted tax from payments disbursed but used the same for some urgent financial needs. What are the consequences?
Answer: It is an offense to misuse Tax Deducted at Source. It should have been remitted to a government account within the specified time limit. Failure to deposit TDS attracts levy, interest, penalty and also rigorous imprisonment for up to seven years.

Question (6): If the employer does not deduct tax and employee also does not pay his due tax, who will be held responsible for tax payment?
Answer: The ultimate responsibility to pay tax rests on the person who has earned income. If the employee deposits such tax then the employer will be liable for interest and penalty for failure to deduct tax.

Question (7) : I am buying a property from a person residing in the USA. Should I deduct tax while making payment?
Answer: Yes, u/s 195. In case you have any doubt regarding the amount on which TDS is to be made, you may file an application with the officer handling non-resident taxation who will pass an order determining the TDS to be made. Alternatively, if the recipient feels that the TDS is more he may file an application with his Assessing Officer for non-deduction.

Question (8): Can I use PAN to pay the TDS deducted into government account?
Answer: No. You are required to have a separate Tax Deduction Account Number (TAN) by making an application in Form 49B with the TIN facilitation center of NSDL.

Question (9): Is the Income Tax Act applies only to residents?
Answer: No, Income Tax Act applies to all persons who earn income in India, whether they are resident or non-resident.

Question (10): Who is a resident?
Answer: If an individual stays in India for 182 days or more in a year, he/she is treated as a resident in that year regardless of his citizenship. If the stay is less than 182 days, he /she is a non-resident.

Question (11): How can I know whether a company is resident or non-resident?
Answer: A company is considered a resident if it is incorporated under the Indian Companies Act. A foreign company can also become a 'resident' if the control and management of its affairs is done entirely in India during the previous year.

Question (12): How is resident / non-resident status relevant for levy of income tax?
Answer: In the case of resident individuals and companies, their global income is taxable in India. However, non-residents have to pay tax only on the income earned in India or from a source/activity in India.

SOURCE: TDSCPC Best Regards,
- SUNIL RAJAI

TRACES (TDS Reconciliation Analysis and Correction Enabling System) // Question and Answer Of TAN //

TRACES (TDS Reconciliation Analysis and Correction Enabling System)
Question and Answer Of TAN

Question (1): What is TAN ?
Answer : TAN or Tax Deduction and Collection Account Number is a unique ten-digit alpha-numeric number required to be obtained by all persons who are responsible for deducting or collecting tax. Under Section 203A of the Income Tax Act, 1961, it is mandatory to quote Tax Deduction Account Number (TAN) allotted by the Income Tax Department (ITD) on all TDS statements. To facilitate deductors find their new TAN, ITD has now introduced a search facility on their website (www.incometaxindia.gov.in). Through this facility, deductors can search on name and old TAN to find the new TAN. Deductors are advised to find new TAN from this site before it is incorporated in their e-TDS statement to avoid any inconvenience at the time of furnishing e-TDS statements. For more information, visit TIN.

Question (2) : Who is a deductor?
Answer : A Deductor is a specified person who is eligible to deduct tax on particular types of payments being made by them as per the provisions of the Income Tax Act, 1961.

Question (3) : What is TAN Registration Number?
Answer : TAN Registration Number is provided by TIN when TAN is registered on TIN.

Question (4) : What are the types of TAN applications?
Answer : There are two types of TAN Applications:
1) Application for issuance of new TAN (Form 49B)
This application form should be used when deductor has never applied for a TAN or does not have a TAN.
2) Form for change or correction in TAN data for allotted TAN
This application form should be used by deductors in case they want a change or correction in data associated with their TAN.

Question (5) : How to apply for new TAN?
Answer : Application Procedure
1) An applicant will fill Form 49B online and submit the form. Deductor may either make an online application through TIN (Tax Information Network) or submit physical TAN application to any TIN-Facilitation Center (TIN-FC) of NSDL
2) If there are any errors, rectify and re-submit the form
3) Confirmation screen with data filled by the applicant will be displayed
4) Applicant may either edit or confirm the same
Acknowledgment
1) On confirmation, an acknowledgment screen will be displayed. The acknowledgment consists of
• A unique 14-digit acknowledgment number
• Status of applicant
• Name of applicant
• Contact details (address, e-mail and telephone number)
• Payment details
• Space for signature
2) Applicant shall save and print this acknowledgment
3) Signature / left thumb impression should only be within the box provided in the acknowledgment. In case of applicants other than 'Individuals', authorised signatory shall sign the acknowledgment and affix appropriate seal or stamp
4) Left hand thumb impression, if used, should be attested by a Magistrate or a Notary Public or Gazetted Officer, under official seal and stamp
Question (6) : How can I track the status of my TAN application?
Answer : Applicants may track status of their TAN application using 14-digit unique Acknowledgment Number after three days of application using the status track facility on TIN.

Question (7) : How is TAN issued?
Answer : Applications for Form 49B received by NSDL are digitized and forwarded to ITD. ITD will issue the TAN which will be intimated to NSDL online and NSDL will then issue TAN letter to applicant.

Question (8) : Why is it necessary to have TAN?
Answer : The provisions of Section 203A of the Income Tax Act, 1961 require all persons who deduct or collect tax at source to apply for the allotment of TAN. The section also makes it mandatory to quote TAN in all TDS / TCS / Annual Information Returns, payment challans and certificates to be issued. Deductor cannot file TDS / TCS statements and deposit challans for TDS / TCS payments in banks without TAN. Failure to apply for TAN or not quoting the same in the specified documents attracts a penalty of ` 10,000/-.

SOURCE : TDSCPC Best Regards,
- SUNIL RAJAI

TRACES (TDS Reconciliation Analysis and Correction Enabling System) Question and Answer Of Registration and Login // SUNIL RAJAI // MONARCH

TRACES (TDS Reconciliation Analysis and Correction Enabling System)
Question and Answer Of Registration and Login

Question (1): When I provide my TAN and Token Number, I get the message 'Invalid details'. Why?
Answer: Token Number (Provisional Receipt Number) provided must be of any accepted Regular statement filed by you on or after April 1, 2010, or of any accepted Correction statement filed by you from April 1, 2010, to October 15, 2012.

Question (2) : What are the details that I need to enter in the registration form?
Answer :
For Deductors
• Step–1 :
1) TAN of Deductor
• Step–2 :
1) Token Number of the regular statement corresponding to the Financial Year, Quarter and Form Type displayed on screen
2) Challan details of one particular CIN which has been mapped to at least three deductee rows. If there is no such challan, please enter details of challan having a maximum number of deductee rows
• Step–3 :
1) PAN of Deductor
2) PAN of Authorised Person (person responsible for deduction of tax at source)
3) Date of Birth of Responsible Person as in PAN database
4) Designation of Responsible Person
5) Communication Address
6) Mobile Number
7) Email Id
For Tax Payers
• Step–1 :
1) PAN of Tax Payer
2) Date of Birth as on PAN Card
3) Name as in PAN database
4) Option 1 – Details from Form 26AS or salary slip (in case of salaried persons). Provide TAN of deductor who has deducted TDS / TCS, month & year of deduction and amount of tax deducted
5) Option 2 – Details of any tax paid by you. Provide Assessment Year for which payment was made by you, Challan Serial Number of the challan using which payment was made and amount as per the challan
• Step–2 :
1) Communication Address
2) Mobile Number
3) Email Id

Question (3) : How can I ensure that I have entered correct communication details (Email Id or Mobile Number) during registration? Can I edit this information before submitting my registration form?
Answer : During registration, please ensure to verify your details in the Confirmation Screen (Step–5). In case of any incorrect details, click on 'Edit' to change your details.

Question (4) : Sometimes when I login to TRACES, I always get the message, "Application is down for planned maintenance". What may be the reason?
Answer:  The cookies on your browser may be using the cached data to display this message and you may need to clear the cookies and reload the website. Steps to clear cookies are given below. You can clear cookies by pressing 'Ctrl+Shift+Del' (Control+Shift+Delete) keys on your keyboard together.
Step-by-step instructions for different browsers are given below:
Internet Explorer
1) Click on 'Tools' option from your browser toolbar
2) Go to 'Internet Options'
3) Under 'General' Tab, 'Browsing History' section, click on 'Delete'
4) In the dialog box that appears, select 'Cookies and Website Data' and click on 'Delete'
Firefox
Click on 'Tools' option from your browser toolbar
Click on the 'Clear Recent History' option
In the dialog box that appears, there is a 'Time Range' dropdown. Select 'Everything'
Click on 'Clear Now' to delete the cookies
Chrome
1) Click the Chrome menu (the icon with three vertical lines) on the browser toolbar
2) Select 'Tools'
3) Select 'Clear Browsing Data'
4) In the dialog box that appears, select checkboxes for the types of information that you want to remove
5) Use the menu at the top to select the amount of data that you want to delete. Select beginning of time to delete everything
6) Click 'Clear Browsing Data'

Question (5): I am a registered user on TRACES. However, whenever I am trying to login to TRACES, I am always getting the message 'Invalid details'. What may be the reason?
Answer : To log in and use the functionalities of TRACES, you are required to enable Java Script in your web browser. Please refer to below mentioned step-by-step instructions for different browsers to enable java script:
Internet Explorer
1) Click on 'Tools' option from your browser toolbar
2) Go to 'Internet Options'
3) Select the 'Security Tab', click on 'Custom Level'
4) In the 'Security Setting-Internet Zone', look for the 'Scripting'
5) In the 'Active Scripting', select 'Enable'
6) When the 'Warning!' window pops out asking "Are you sure you want to change the settings for this zone?" select 'Yes'
7) In the 'Internet Options' window, click on the 'OK' button to close it
Firefox
1) On the web browser click 'Firefox' menu and then select 'Options'
2) In the 'Options' window, select the 'Content' tab
3) Mark the 'Enable JavaScript' checkbox
4) In the opened 'Options' window, click on the 'OK' button to close it
5) Click on the 'Reload Current Page' button of the web browser to refresh the page
Chrome
1) Click the Chrome menu, select 'Options'
2) Select 'Under the Hood'
3) Under 'Privacy', click on 'Content settings...'
4) When the dialog window opens, look for the 'JavaScript' section and select 'Allow all sites to run JavaScript (recommended)'
5) Click on 'OK' button to close it
6) Close the 'Settings' tab
7) Click on the 'Reload This Page' button of the web browser to refresh the page

SOURCE : TDSCPC Best Regards,
- SUNIL RAJAI

TRACES (TDS Reconciliation Analysis and Correction Enabling System) Question and Answer Of Justification Report // MONARCH // SUNIL RAJAI

TRACES (TDS Reconciliation Analysis and Correction Enabling System)
Question and Answer Of Justification Report

Download PDF

Justification Report Request and Download help file click4download: Justification Report

Question (1): What is a justification report?
Answer: It is a document that serves as an annexure to the intimation to be sent to the deductor. Intimation will be sent to the deductor through mail / post but a justification report will have to be downloaded from the portal.

Question (2): What is the purpose of the justification report?
Answer: This document consists of various defaults/errors identified by the Income Tax Department (ITD) while processing the statement filed by deductor during a particular quarter of a financial year. It provides detailed information about the defaults/errors that needs to be rectified by deductor by filing correction statement and payment of the necessary interest/fees/ other dues. Deductor can also provide clarification for any of the errors identified.

Question (3): How can I download a justification report for my TAN?
Answer: Login to TRACES as a deductor and submit download requests for this report under ‘Request for Justification Report Download’ in the ‘Defaults’ tab. The file will be available under the ‘Requested Downloads’ in the ‘Downloads’ tab.

Question (4): Is it mandatory to download a justification report on receipt of demand notice u/s 200A?
Answer: No. However, the justification report can be downloaded to know the default calculation.

Question (5): How can a deductor know about his default calculation?
Answer: Deductor needs to download the Justification Report for the statement to know about the default calculation in the statement.

Download PDF

Justification Report Request and Download help file click4download: Justification Report

Question (6): How do I know my AO details?
Answer : Log on to www.incometaxindia.gov.in to get information about respective AO.

Question (7): What is the password for opening the Justification Report?
Answer : The password for opening Justification Report will be JR_TAN_FormType_Quarter_FY, i.e., JR_AAAA11111A_24Q_Q3_2010-11.

Question (8) : Whom should I contact for justification report related queries?
Answer: Write an e-mail to along with justification report queries.

Question (9): Request has been submitted for downloading Justification Report, but now status for the same is showing -not available. Why it is so?
Answer: The justification report is shown as 'Not Available' for cases where a correction statement has been filed and is pending for processing.

Question (10): I am not able to download the Justification Report. Why?
Answer: Justification Reports can be downloaded till Financial Year 2011-12. Justification report will not be available if your statement has no defaults.

Download PDF

Justification Report Request and Download help file click4download: Justification Report

SOURCE: TDSCPC
Best Regards,
- SUNIL RAJAI