Meaning, Importance and Types of TDS

Methods for collection of Direct taxes by the Govt

1) Tax Deducted at Source (TDS)

2) TCS : by the seller from the buyer at the time of sale u/s 206 C
3) Advance Tax : Advance Tax instalments or any tax paid till 31st March of
the relevant financial year by the taxpayer (recipient of income/payment)

4) Self-Assessment Tax (Voluntarily) after 31st March and till filing of return (
any tax remaining unpaid)

Meaning of TDS:
The scheme of TDS aims to collect the tax at the point of very source of income.
TDS is a tax deducted by a person liable /responsible to deduct tax (called the
Deductor) at the time of credit or payment of income/specified types of
payment to the recipient (called the deductee).

The scheme provides that the person (deductor) who is liable to make payment of
specified nature (income or otherwise) to any other person (deductee) shall
deduct tax at source and deposit the same into the account of the Central
Government for and on behalf of deductee. The deductee from whose income tax
has been deducted at source is eligible to get credit of the amount so deducted on
the basis of Form 26AS or TDS certificate issued by the deductor. If deductor
fails to deduct and/or pay to the Govt. partly/wholly, he shall be deemed to be an
assessee in default.

Dr Renu Aggarwal, Associate Professor in Commerce

 Importance
/Benefits of
TDS

Govt. Assessee

Regular Divides
Avoid Tax /periodic Avoid
evasion due burden and Convenient delays ,
Flow of Widens the
to non- reduces to pay in interest and
revenue tax base
disclosure pressure to instalments penalties
from the pay huge
head tax. due to
amount at delayed/no
the end of n payment
financial towards
year end.

ADVANTAGES OF TDS
1) From the Deductee’s point of view
a) TDS ensures that income tax is deducted from income of an individual in advance at
periodic intervals. Hence, it allows the deductee to plan the finances in advance.
b) TDS enables an individual to pay his/her income tax as and when he/she earns it. TDS
will not put pressure on income towards the end of the year.
c) Payment of high/ lump-sum amount of tax at one go is not feasible for every
individual. As TDS gets deducted from one’s income periodically, paying tax
becomes convenient for the individuals.
d) Since payment of tax goes at regular intervals and almost uniformly with no
obligation to use last few months’ income to pay tax, it helps in avoiding delays in
payment, interest on tax and penalties.
2) From the government’s point of view
a) As TDS is collected at the source, it minimises the chances of tax evasion by
individuals.
b) TDS acts as one of the steadiest sources of revenue for the government.
c) It enables to widen the base of tax collection.

Dr Renu Aggarwal, Associate Professor in Commerce

 Rates of TDS (fixed/Variable)
Taxes are deducted at the rates specified in the relevant provisions of the Act or the First
Schedule to the Finance Act. However, in case of payment to non-resident persons, the
withholding tax rates specified under the Double Taxation Avoidance Agreements shall also
be considered.

Variable: In case of payment of salary, the tax is deducted at an average rate of income tax.
It varies from person to person. Generally, the employer deducts the tax from the salary on
estimated basis. He is required to calculate the taxable salary and tax for the whole financial
year , divide the tax in equal instalments over the relevant months of the financial year and
deduct this average amount at the time of payment of salary. Since tax liability on account of
salary depends on a number of factors like the income level, deductions, other income or
savings reported etc., TDS amounts also vary for different months.

Fixed: TDS rates on all incomes/payments other than salary are fixed rates.

Types of TDS (relevant as per syllabus)

1. Payments covered under Salary (Section 192)/Variable

2. Payments other than salary /fixed rate
a) For interest on securities, (Section 193),
b) For Dividends (Section 194),
c) For Interest other than interest on securities, (Section 194A),
d) For Winning from lottery, crossword puzzles etc (Section 194B),
e) To contractors or sub-contractors (Section 194C)
f) For Life Insurance Policy (Section 194DA),
g) For rent, (Section 194I),
h) for professional or technical fee (Section 194J).

Dr Renu Aggarwal, Associate Professor in Commerce

 Relevant TDS Provisions for Sem IV E filing
Who is the Payer TDS Section and TDS For the Due Date of Form No /Due Date of filing Due Date of Issuing
Certificate Form No. month/quarter Deposit of TDS QUARTERLY TDS Return TDS certificate
ending on
TDS may be deducted/and paid to Govt monthly or quarterly TDS Return is always filed Quarterly Form 16
1 TDS deducted by Govt Office and Sec 192 (salary) NA Same date on which (Form 24Q) By 15th day of June of
deposited without Income-tax TDS is deducted the financial year
challan Form No.16 immediately following
2 TDS deducted by Govt Office and Sec 192 (salary) On or before 7 days (Form 24Q) the financial year in
deposited with Income-tax from the end of the which the income was
challan 281 Form No.16 month in which paid and tax deducted.
TDS is deducted
3 TDS deducted by other than Govt Sec 192 (salary) Any day during March 30th April (Form 24Q)
Office and deposited with /194P(pension of specified till 31st March
Income-tax challan 281 senior citizen) On or before 7 days
In any of the other
Form No.16 from the end of the
months
month
4 TDS deducted by a person other Sec 192 (salary)/ (Form 24Q)
than Govt Office and Assessing 194P(pension of specified 1 th
30 June
th
7 July 31st July of financial year
officer( duly authorised) has senior citizen)
allowed quarterly deposit of TDS 2 30th September 7th October 31st Oct of financial year
with Income-tax challan Form No.16 3 st
31 December th
7 January 31st Jan of financial year
4 31st March 30th April 31 May of the financial yr immediately
following the financial year in which the
deduction is made
TDS deducted by a person other *Sec 193/194/194A/194 (Form 27Q/26Q) Form 16A
than Govt Office and Assessing B/194C/194DA/194I/194J th th st th
officer duly authorised has 1 30 June 7 July 31 July of financial year 15 August
allowed quarterly deposit of TDS 2 30th September 7th October 31st Oct of financial year 15th November
with Income-tax challan Form No.16A 3 31st December 7th January 31st Jan of financial year 15th February
4 31st March 30th April 31st May of the financial year 15th June
immediately following the financial year
in which the deduction is made
Dr Renu Aggarwal, Associate Professor in Commerce
Who is the Payer TDS Section and TDS For the Due Date of Form No /Due Date of filing Due Date of Issuing
Certificate Form No. month/quarter Deposit of TDS QUARTERLY TDS Return TDS certificate
ending on
194-IA(T/f of Immovable NA Within 30 days Form No. 26QB within fifteen days from
Property)/ Form No.16B from the last date of the due date for
month in which furnishing the challan-
TDS is deducted cum-Return
section 194-IB (Payment of NA Within 30 days Within 30 days from the last date of within fifteen days from
Rent )/ Form No.16C from the last date of month in which TDS is deducted as the due date for
month in which Challan cum Return in Form No.26QC furnishing the challan-
TDS is deducted cum-Return
194M(Payment to resident NA Within 30 days Within 30 days from the last date of payee within fifteen
contractor/professional etc) from the last date of month in which TDS is deducted as days from the due date
/Form No.16D month in which Challan cum Return in Form No. for furnishing the
TDS is deducted 26QD challan-cum-Return
194S(T/f of Virtual Digital NA Form No. payee within fifteen
Asset) /Form No. 16E 26QE days from the due date
for furnishing the
challan-cum-Return

Dr Renu Aggarwal, Associate Professor in Commerce

 Relevant TDS sections Sem IV B Com (H): Rates,exemption etc

Surcharge

TDS u/s
/Cess

Lower /No

197
15 G / 15
Section Nature of Payment Deductor Deductee Time of Any exemption from TDS /threshold limit Rate of TDS(on 100% amount
deduction if applicable/exceeds limit)

Salary Employer Employee Payment No TDS Up to exemption limit 2.5/3/5 lakhs as the Average rate of tax( total tax Yes No Yes
192 case may be /employment period)
Interest on securities Payer of interest Resident person Payment/credit *Interest exempt on deb of widely held co upto 5000 to 10% NIL Yes Yes
whichever is only resident Individual/HUF/ *interest on CG/SG
193
earlier securities/*interest on listed demat
securities/Cooperative society deb
Dividend from Indian Co/Dividend declared and Principal Officer Resident Payment/credit upto 5000 in aggregate per financial year(other than 10% NIL Yes Yes
(Resi
194 paid within India on eq/pref shares of a domestic of Domestic co shholder whichever is cash) Indi)
company earlier
Interest other than Interest on securities e.g. interest *Any person + Resident person Payment/credit *upto 40,000/50K(senior citizens) interest from bank, 10% NIL Yes Yes
on saving / time deposit accounts with banks/post Individual/HUF whichever is cooperative bank or post office specified scheme from
194A office /cooperative bank etc if earlier all branches/5,000 p.a by any other person /interest by
firm to partners/*on ZCB / Post office RD,TD,MIS,
NSC various issues/Kisan and Indira Vikas Patra,etc
Income from winning from any lottery/crossword Any person Any person Before/at the Upto 10,000 30% flat NIL No No
194B puzzle/card games and other games of any sort (in responsible for receiving such time of release
cash/kind) paying income income of income
Payments for any *work contract/sub contract *Specified resident Payment/credit *No TDS if single payment is up to 30,000/aggregate 1% for individual/2% others NIL No Yes
194C including supply of labour for carrying out such person contractor/sub whichever is up to 1 lakh p.a.*GOODS Transport operators having
work contractor earlier upto 10 carriages and provides PAN
Payment under Life insurance policy including Any person resident person At the time of No TDS if payment is less than 1 lakh p.a.in aggregate 5% NIL Yes Yes
194 bonus(Maturity/Death) paying under payment /if covered u/s 10(10D) /if ULIP payment having
DA Life insurance premium 2.5 lakhs due to death
policy + bonus)
Rent from land/building/plant/machinery/furniture/ *Any person + Residentperson Payment/credit up to 2,40,000 p.a./if payment to real estate Investment 2% for p/m/equipment and 10% NIL Yes Yes
194I Individual/HUF ( whichever is trust for all others(excluding GST
if owner/otherwis earlier and municipal tax)
Fee for Professional/Technical *Any person + Resident person Payment/credit up to 30,000 p.a in each case except Director fee/paid 2% fees for technical service/on NIL No Yes
Services/Royalty/Director fee/non compete fee Individual/HUF whichever is exclusively for personal purposes of payer individual operators of call centres/royalty
194J if earlier or member of HUF for sale, distribution or
exhibition of cinematographic
films./ 10% for others
Deductor : *Any person including Individual/HUF if total sales/gross receipts/turnover from PGBP exceeds 1 crore/50 lakhs resp.
*Specified Person: CG/SG/local authority/Statutory Co/Co./co-operative society/ Housing Construction or planning authority/ society /trust/university/Foreign Govt/enterprise etc/firm/Individual and
HUF if *
*work includes advertising/broadcasting and telecasting including production of programmes for it/carriage of goods or passengers other than by railways/catering/customised manufacturing or supply of
a product using his material
Other Provisions
Sec 206AA : If a deductee does not provide PAN to deductor then the deductor will charge TDS at higher of the three : sectionwise rate or normal rate or 20%
Sec 206AB applicable to TDS other than salary and Lottery income: when deductee defaults in filing return of income on due date + total TDS and/or TCS is equal to or exceeds 50,000 then
deductor shall deduct higher of the threeTDS rates (a)twice the sectionwise rate or 9b) twice normal rate or (c) 5%
Note: If a deductee covered u/s 206AA and 206AB then higher of the two rates
 Form 16/16A

Methods to pay tax to the Govt by the Deductor /taxpayer

1. Voluntarily: payment by taxpayers as Advance Tax
2. Voluntarily: payment by taxpayers as Self-Assessment Tax
3. Compulsorily: Taxes deducted at source [TDS] by the payer of income called deductor
(person responsible for TDS on specified types of payments made by it) and paid to the
government on behalf of deductee .
4. Compulsorily: Taxes collected at source [TCS] by the seller at the time of sale and
deposited to the government on behalf of buyer.
Statutory Obligation of Employer to issue TDS Certificate Form 16

Sec 203 (2) provides that every employer covered u/s 192(1A) shall furnish a certificate
to the person in respect of whose income TDS is deducted and payment has been made
to the Central Government and specify the amount so paid, the rate at which the tax has
been paid and such other particulars as may be prescribed within the prescribed time
period. As per Rule 31,the certificate of TDS for salary income is Form 16.

About Form 16:

1. Meaning : Form 16 is the certificate of deduction of tax at source by the employer from
essentially the income under the head salary of the employee. This certificate provides
details of TDS deducted by the employer from the taxable salary paid to the employee and
other incomes if any reported by the employee to the employer during the relevant financial
year. Salary is as paid u/s 17(1), (2) and (3) after considering all exemptions, deductions,
rebates and reliefs.
2. It is mandatory to issue this certificate to employees/Tax Payers if tax is deducted at
source by the employer.
3. It is not to be issued if tax is not deducted at source by the employer..
4. Validity of TDS : Form 16 downloaded by the employer from TRACES website are
considered as valid TDS certificates, as per CBDT circular 04/2013 dated 17th April,2013.
TDS certificates downloaded from TRACES are non-editable.
5. Contents: it has two parts A and B.
Part A and B of certificate shall specify:—
a. Name and Address of Employer and Employee both
b. valid permanent account number (PAN) of the employee and employer both;
 c. valid tax deduction account number (TAN) of the employer;
d. Assessment Year and period within the relevant financial year.
Part A also gives info about payment of TDS
e. Identification Number
▪ book identification number or numbers where deposit of tax deducted is
without production of challan in case of an office of the Government;
▪ challan identification number or numbers in case of payment through bank;
f. Receipt Number(s)
• receipt number of the relevant quarterly statement of tax deducted at source
which is furnished in accordance with the provisions of rule 31A;
• receipt numbers of all the relevant quarterly statements in case the statement
referred to in clause (i) is for tax deducted at source from income chargeable
under the head "Salaries".
Part B also gives details of salary paid, tax due and TDS by employer.

6. Issue Date : Time period within which employer has to provide Form 16

Sl. No. Form Periodicity Due date within which employer/deductor has to provide
No. Form 16
(1) (2) (3) (4)
1. 16 Annual By 15th day of June of the financial year immediately
following the financial year in which the income was paid
and tax deducted.

7. If an assessee is employed by more than one employer during the year:

Part A : each of the employers shall issue Part A of the certificate in Form No.
16 pertaining to the period for which such assessee was employed with him and
Part B : May be issued by each of the employers or the last employer at the
option of the assessee.
8. Duplicate : The deductor may issue a duplicate certificate in Form No. 16 if the
deductee has lost the original certificate so issued and makes a request for issuance
of a duplicate certificate and such duplicate certificate is certified as duplicate by the
deductor.

9. Authentication : Where a certificate is to be furnished in Form No. 16, the employer

may, at his option, use digital signatures to authenticate such certificates. If DSC is
used , the employer has to ensure that—
• Mandatory contents are mentioned on certificates
• the contents of the certificates are not amenable to change; and
• the certificates have a control number and a log of such certificates is
maintained by the employer
 Form 16A:

Statutory Obligation of Payer of an income/sum to issue TDS Certificate Form

16A

Sec 203 (2) provides that every person shall furnish a certificate to the person in respect
of whose income /payment TDS is deducted and payment has been made to the Central
Government and shall specify the amount so paid, the rate at which the tax has been paid
and such other particulars as may be prescribed within the prescribed time period. As per
Rule 31,the certificate of TDS for non salary income i.e. on any other head of income
under Chapter XVII-B like interest on securities, dividend etc. is Form 16A.

About Form 16 A
1. Form 16A is the certificate of deduction of tax at source provided by the payer of income
or any sum /deductor to the receiver/deductee of the payment .
2. It is issued ONLY if tax is deducted at source by the deductor on behalf of the recipient
to be paid to the Govt.
3. It is mandatory to issue this certificate to recipient /Tax Payers if tax is deducted at
source by the deductor.
4. It is downloadable by the deductor from TRACES website.
5. Contents:
This certificate provides details of TDS by the deductor from the payment done for the
relevant financial year.
The certificate shall specify:—
g. valid permanent account number (PAN) of the deductee;
h. valid tax deduction and collection account number (TAN) of the deductor;
i. Identification Number
▪ book identification number or numbers where deposit of tax deducted is
without production of challan in case of an office of the Government;
▪ challan identification number or numbers in case of payment through bank;
j. Receipt Number(s)
 • receipt number of the relevant quarterly statement of tax deducted at source
which is furnished in accordance with the provisions of rule 31A;
• receipt numbers of all the relevant quarterly statements in case the statement
referred to in clause (i) is for tax deducted at source from income chargeable
under the head "Salaries".

6. Issue Date : Time period within which employer has to provide Form 16A
Sl. No. Form Periodicity Due date within which employer/deductor has to provide
No. Form 16A
(1) (2) (3) (4)
1. 16A Quarterly Within fifteen days from the due date for furnishing the
statement of TDS under rule 31A.
Quarter Due Date of TDS Issue Date: Within fifteen days from
ending Return the due date of filing TDS Return
June 30 July 31 Aug 15
Sep 30 Oct 31 Nov 15
Dec 31 Jan 31 Feb 15
March 31 May 31 June 15

7. The deductor may issue a duplicate certificate in Form No. 16 A if the deductee has
lost the original certificate so issued and makes a request for issuance of a duplicate
certificate and such duplicate certificate is certified as duplicate by the deductor.

8. Authentication: Where a certificate is to be furnished in Form No. 16A, the deductor

may, at his option, use digital signatures to authenticate such certificates. If DSC is
used, the deductor has to ensure that—

• Mandatory contents are mentioned on certificates

• the contents of the certificates are not amenable to change; and
• the certificates have a control number and a log of such certificates is
maintained by the employer
 Form 13 : Certificate for deduction at lower rate u/s 197

(a) Meaning: It is a form submitted by a person in receipt of income /specified

payments under sections 192/193/194, 194A/C/D/G/H/I/J/K/LA/LBB/LBC/M/O
and 195 covered under TDS provisions and desirous of getting a certificate from
the Assessing officer for the deduction of income-tax at lower rates or no deduction
of income-tax at all from the income/specified payments received by him u/s 197
provided certain conditions are met.

(b) Which Income/payments covered under Form 13 : any income or sum payable
to any person under sections 192/193/194,
194A/C/D/G/H/I/J/K/LA/LBB/LBC/M/O and 195.

(c) Who can file/Rationale : Income-tax is required to be deducted at the time of

credit of any income or sum payable to any person as per point (b) above
irrespective of taxable income of the recipient of income/payments. Out of these
persons , there are certain persons whose income is (a) either Below or up to the
minimum exemption limit and hence not taxable at all or (b) Above exemption limit
but taxable at a lower rate than the TDS. These persons face hardship in getting
refund of TDS from the Income tax department as they might not be required to file
income tax returns or their funds get unnecessarily blocked.

To facilitate such persons , Act has provided an enabling provision of Sec 197
which provides that such a person may apply in Form No. 13 to Assessing officer
for grant of a certificate for the deduction of income-tax at lower rates or no
deduction of income-tax at all from the income/specified payments received by him.

(d) Optional/Voluntarily : It is voluntary for such a person to apply . Not mandatory.

(e) Mode of Filing Form 13 : Rule 28 prescribes that such an application shall be in
Form No. 13 electronically under digital signature / through electronic verification
code.

Dr Renu Aggarwal, Associate Professor in Commerce

 (f) Criteria for Issue: On receiving the Application in Form No 13, the assessing
officer shall go through the application and decide as per the following:
a) For income/payments other than dividend: if the Assessing Officer is satisfied that
existing and estimated tax liability of a person justifies the deduction of tax at lower
rate or no deduction of tax, he shall issue a certificate for the same.
i. Factors to be taken into consideration for determining the existing and
estimated liability:
o tax payable on estimated income of the previous year relevant to the assessment
year
o tax payable on the assessed or returned 2[or estimated income, as the case may
be, of last four] previous years;
o existing liability under the Income-tax Act, 1961 and Wealth-tax Act, 1957;
o advance tax payment, TDS and TCS for the assessment year relevant to the
previous year till the date of making application
b) For payments of dividend: the Assessing Officer shall issue the certificate if he is
satisfied that
i) Shares are shares in public companies and
ii) stand in his name and are beneficially owned by him, and the dividends
therefrom are not includible in the total income of any other person under
sections 60 to 64
or
i) stand in his name and are held by him under trust wholly for charitable or religious
purposes, and the dividends therefrom are exempt from tax under the provisions of
sections 11 to 13.
(g) Issued to whom: The certificate for deduction of tax at any lower rates or no
deduction of tax shall be issued
• direct to the person responsible for deducting the tax/Principal officer of the
company under advice to the person who made an application/ applicant
shareholder for issue of such certificate if the number of persons responsible

Dr Renu Aggarwal, Associate Professor in Commerce

 for deducting the tax is up to 100 or if applicant can provide details of all
deductor or
• to the person who made an application for issue of such certificate, authorising
him to receive income or sum after deduction of tax at lower rate if the number
of persons responsible for deducting the tax is likely to exceed one hundred and
the details of such persons are not available at the time of making application
with the person making such application.
(h) Validity Period: The certificate shall be valid for the period as specified in the
certificate/ maximum three years in case of payment of dividend. The assessing
officer can cancel the certificate before the specified period. Also, it shall cease to
be operative from the date of notice to the company of the transfer of any of the
shares mentioned therein to another person, in respect of the shares so transferred.
(i) Applicability: The certificates shall be valid only with regard to the person
responsible for deducting the tax and named therein and with regard to the person
who made an application for issue of such certificate.
(j) Obligation of Deductor : The person responsible for paying the income/ giving the
payment shall deduct income-tax at the rates specified in such certificate or deduct
no tax at all.

Dr Renu Aggarwal, Associate Professor in Commerce

 Form 15 G/15 H u/s 197A.
Declaration by person claiming receipt of certain incomes without deduction of tax

1. Meaning : Form 15G/ 15H is a declaration by the recipient of income/specified payments

under section 192A/ 193/ 194/194A/194D/194DA/194EE/ 194-I /194K, submitted to the
payer in writing that his estimated total income of the previous year in which such income
is to be included in computing his total income will be NIL and hence the payer is
requested not to deduct any tax at the point of source of income.
2. Essential Condition/Eligibility:
a) only an individual who is sure that his estimated total income of the previous year
in which such income is to be included in computing his total income would be
NIL can avail this facility.
b) Only an individual providing PAN to the deductor can avail this facility. Otherwise
Form 15G/H is treated as invalid.
3. Statutory Right : Sec 197A (1)/(1A) /(1C) of the Income Tax Act gives a right to an
individual resident in India / person (not being a company or a firm) to furnish a
declaration in writing in duplicate in the prescribed form (15G/15H ) and verified in the
prescribed manner to the person responsible for paying any income/sum as interest, rent,
dividend etc to the effect that the tax on his estimated total income of the previous year in
which such income is to be included in computing his total income will be NIL.
4. Prescribed Form : Rule 29C provides that this declaration under section 197A (1)/(1A)
shall be filed in Form No.15G and declaration under section 197A (1C) by a senior citizen
who has completed 60 years of age shall be in Form No.15H by a person /recipient of
income who is claiming receipt of income without TDS.
5. Number: 15 G /15 H has to be submitted to all payers. Hence, it can be one or multiple.
6. Manner of Furnishing Form 15G/H : It may be furnished in any of the following
manners:
a) in paper form
b) electronically after duly verifying through an electronic process in accordance
with the procedures, formats and standards specified.
7. Due Date of Filing Form 15G/15H: There is no due date prescribed by the Act. However,
the recipient should submit before expected due date of payment.

8. Validity: Form 15G and Form 15H are valid for one financial year (previous year). Hence,
the recipient should submit these forms every year preferably at the beginning of the
financial year and /or when he is sure of not reaching the threshold of TDS /taxable income
level. e.g this will ensure that the bank does not deduct any TDS on interest income.
9. Allotment of unique identification number to each form : The payer of
income/deductor shall allot a unique identification number to each declaration received
by him in Form No.15G and Form No.15H respectively during every quarter of the
financial year in accordance with the procedures, formats and standards specified by the
Principal Director-General of Income-tax (Systems).
 Tags in 24Q and 26Q for Lower or No deduction of TDS
The TDS return for salary 24Q and non salary return 26Q has a column in which the deductor can
inform the Govt that although payment has been made to the recipient, TDS has not been deducted
at all either due to exemption given by CBDT circular or due to submission of 15G/15H/Form 13
certificate. In addition, deductor also informs to the Govt via TDS Return that TDS is deducted at a
Higher rate for not providing PAN to deductor or not filing Return of Income or at a lower rate as per
the certificate issued by the Assessing officer u/s 197.

S.No. TAG 24Q 26Q

1 A TDS at Lower Rate: Form 13 TDS at Lower Rate: Form 13
2 B No TDS : 15G/15H submitted No TDS : 15G/15H submitted
3 C Higher TDS due to not providing PAN to Higher TDS due to not providing PAN
deductor u/s 206AA to deductor u/s 206AA
4 E No TDS for payment to a
Fund/Authority/Board or Bodies
whose income is unconditionally
exempt and are not required to file
Return of Income vide CBDT circular
18/2017
5 U Higher TDS due to not filing Return of
Income u/s 206AB
6 Y No TDS as payment is not liable for
TDS (Exempt/below threshold limit)
7 Z No deduction on account of payment
u/s 197a(1F)
 Form 26AS and its extension AIS

Once a taxpayer has paid himself or payer has deposited the tax deducted or collected on
behalf of taxpayer to the Govt., he needs to have a document which shall verify the same.
Section 285BB of the Act facilitates the availability of an annual record of the same.

It is mandatory for the prescribed income-tax authority or the person authorised by such
authority to upload in the registered account of the assessee ( Electronic filing account
registered by the assessee on the e portal of the income tax authority) an annual information
statement in Form 26AS. Under Rule 114-I ,the authorised person has to upload the following
information which is in his possession within three months from the end of the month in which
the information is received by him

1. Information relating to tax deducted or collected at source

2. Information relating to specified financial transaction
3. Information relating to payment of taxes
4. Information relating to demand and refund
5. Information relating to pending proceedings
6. Information relating to completed proceedings
7. In addition these six , he is authorised to upload the information received from any
officer, authority or body performing any function under any law or the information
received under an agreement referred to in section 90 or section 90A of the Income-tax
Act, 1961 or the information received from any other person to the extent as it may
deem fit in the interest of the revenue .

Please refer documents of Income Tax Department for details of 26AS and AIS
 Annual Information Statement
(a product of CBDT’s e-Verification Scheme, 2021 / 13 December, 2021.)
The Income Tax Department has taken several progressive steps harnessing information
technology to encourage voluntary tax compliance and facilitate a transparent and non-
intrusive tax administration. AIS is a product of this scheme.

Benefits of AIS ::
Using information technology effectively, the Department has been collecting information of
financial transactions of a taxpayer from multiple sources which is shared with the taxpayer and
displayed to him through AIS. It will assist taxpayer in the following ways

1) To provide a facility to the taxpayer to object to any inaccuracy in data/information

provided by Source/Reporting Entity

2) To enable the taxpayer to explain the financial transaction with evidence.

3) To inform the taxpayer about any transaction which could have been missed in computing
income and taxes, and in filing Return of Income (helps in data correction/cleaning by
displaying unreported or under-reported transactions and thereby prevents initiation of
proceedings on misreported information.)

4) To provide an opportunity to the taxpayer to correct any omissions in Return of Income by

filing an updated return of Income u/s 139(8A) and pay tax due on the income missed in
the original Return of Income.

5) To provide an opportunity to the taxpayer to explain a transaction being verified before any
further action by way of Assessment or Re-assessment is undertaken. The entire process
of e-Verification is digital, with notices issued electronically and responses by the
taxpayers also submitted electronically
FORM 26AS

Income Tax Department

Central Board of Direct Taxes
In order to promote transparency and simplifying
the tax return filing process, CBDT vide Notification
dated May 28, 2020 has amended Form 26AS vide Sec
285BB of Income Tax Act, 1961 r.w.r.114-I of Income
Tax Rules, 1962 w.e.f. 01.06.2020. The new Form 26AS
will provide a complete profile of the taxpayer for a
particular year.

The new Form 26AS will provide the following

information about the Tax payer:
1. Mobile no., e-mail id, date of birth/incorporation
and Aadhaar no.
2. Information relating to tax deducted or collected
at source.
3. Information relating to specified financial
transaction (Information of property and share
transactions etc.)
4. Information relating to payment of taxes
5. Information relating to demand and refund.
6. Information relating to pending proceedings.
7. Information relating to completed proceedings.
8. Information received by Income Tax Department
from any other country under the treaty/
exchange of information about income or assets
of the taxpayer located outside India.
9. Further an enabling provision has been notified
empowering the CBDT to authorize DG Systems
or any other officer to upload in this form,
information received from any other officer,
authority under any law. Thus any adverse
action initiated or taken or found or order
passed under any other law such as custom,
GST, Benami Law etc. including information
about Turnover, import, export etc. may be
made a part of Form 26AS.
Note: Form 26AS can be viewed from assessment
year 2009–10 onwards. Form 26AS also shows
current status of PAN (active/inactive/deleted).
HOW TO VIEW YOUR FORM 26AS?
Tax Credit Statement (Form 26AS) can be viewed/
accessed in three ways :

View Tax Credit from

I https://www.incometax.gov.in
Taxpayers who are registered at the above portal viz
https://incometax.gov.in can view 26AS by login using
username and password. Clicking on ‘View Form 26AS
(Tax Credit)’ in “Income Tax Returns” under e-file option,
and then provide the required details like assessment
year, view type and then same can be viewed. The
facility is available free of cost and registered user may
use the link https://incometax.gov.in for this purpose.

View Tax Credit (Form 26AS) from bank

II site through net banking facility
The facility is available to a PAN holder having net
banking account with any of authorized banks*. View
of Tax Credit Statement (Form 26AS) is available only
if the PAN is mapped to that particular account. The
facility is available free of cost.

*List of Banks registered for providing view of

Form 26AS:
1. Axis Bank
2. Bank of Baroda
3. Bank of India
4. Bank of Maharashtra
5. Canara Bank
6. Citibank N.A.
7. City Union Bank Ltd.
8. ICICI Bank Ltd.
9. IDBI Bank Ltd.
10. Indian Overseas Bank
11. Indian Bank
12. Jammu & Kashmir Bank Ltd.
13. Karnataka Bank Ltd.
14. Kotak Mahindra Bank Ltd.
15. Punjab and Sind Bank
16. State Bank of India
17. The Federal Bank Ltd.
18. The Karur Vysya Bank Ltd.
19. The Saraswat Co-operative Bank Ltd.
20. UCO Bank
21. Union Bank of India
22. HDFC Bank Limited
23. Central Bank of India
24. Punjab National Bank
25. IndusInd Bank
26. YES Bank Limited.
27. Equitas Small Finance Bank.

Note: This option does not require any separate

registration as the KYC of the taxpayer has already
been done by the concerned bank.

View Tax Credit from

III https://www.tdscpc.gov.in
For Resident Taxpayers:
A resident taxpayer first need to register on TRACES
(https://tdscpc.gov.in). Then Form 26AS can be viewed
by clicking on ‘View Tax Credit Statement (Form 26AS)’
after login as “Taxpayer” and filing in required details
like password and relevant assessment year.
For Non-Resident Taxpayers:
An NRI taxpayer can view tax credit from
https://www.nriservices.tdscpc.gov.in. NRI taxpayers
first need to register at TRACES Portal. A request can
be raised to view/download Form 26AS by clicking on
‘View Tax Credit Statement (Form 26AS)’ after login as
“Taxpayer” and filling in required details like password
and relevant assessment year.
Form 26AS statement can be downloaded either as
PDF/text/excel file or can be viewed as HTML.
All the web links referred here can also be accessed
on the national website of Income Tax Department
(www.incometaxindia.gov.in), where there is an option
to view the tax credit - the user is taken to the e-filing
website, internet banking or TRACES website based on
the choice of the taxpayers to view his tax credit.
Note: For voluminous records, a request for
downloading Form 26AS as text file, needs to be
submitted at TRACES by the user.
The transactions under Statement of Financial
Transactions (SFT) Code which will get captured in
New Form 26AS include –
S. Nature of Monetary Threshold
No. Transaction of Transaction
1 Cash Payment or In excess of Rs. 10 Lakh
issuance of DD in a F.Y.
or Pay orders or
any other Bank
instruments
2 Purchase of pre- Payment in cash
paid instruments in aggregating to
cash 10 Lakh or more
3 Cash deposit/ aggregating to
withdrawal in 50 Lakh or more
current account
4 Cash deposit in one aggregating to
or more accounts 10 Lakh or more
other than current
account and time
deposit
5 Time deposit (Other aggregating to
than time deposit 10 Lakh or more
made through
renewal of another
time deposit)
6 Payment for credit Made by any person of
card an amount aggregating
to 1 lac or more in cash
or 10 Lakh or more by
any other mode
7 Purchase of aggregating to
debentures 10 Lakh or more
8 Purchase of shares aggregating to
(including share 10 Lakh or more
application money)
9 Buy back of shares aggregating to
10 Lakh or more
10 Purchase of mutual aggregating to
fund units 10 Lakh or more
11 Purchase of foreign aggregating to
currency 10 Lakh or more
12 Purchase or sale 30 Lakh (individual
of immovable transaction)
property
13 Cash payment for 2 Lakh (individual
goods and services transaction)
14 Cash deposits (a) Rs. 12.5 Lakh or
during specified more in one or more
period (9th Nov to current account of a
31st Dec, 2016) person, or
(b) Rs. 2.5 Lakh or more
in one or more account
other than current
account of a person

For any clarification regarding Form 26AS, contact the

authorities as mentioned below:
Part of the Contact for
Form 26AS Clarification and
Remedy
A, A1 & A2 Deductor
B Collector
C Assessing officer/Bank
D Assessing officer/ITR-
CPC
E Concerned AIR filer
F NSDL/Concerned Bank
Branch
G Respective TAN Holder
USEFULNESS OF TAX CREDIT STATEMENT
(FORM 26AS):
Following information is available in Form 26AS of a
taxpayer which is helpful for him in furnishing his ITR
and ensuring other tax compliances.
• View of all financial transaction involving TDS/
TCS during the relevant Financial Year at one
place.
• View of transaction details involving No/Lower
deductions.
• View of other taxes paid other than TDS/TCS.
• View of details of refund.
• TDS certificate number available in Part A2
of 26AS can be utilized for verification of TDS
certificate i.e. Form 16B.
• View of current status of PAN.
• View of TDS defaults relating to all the TANs
associated with the PAN.
• View of details of SFT transactions.
• View of details of turnover as per GSTR-3B
THE REASONS FOR NOT FINDING YOUR
TAX-CREDITS IN 26AS CAN BE
1. Tax collected by deductor not deposited in govt
account.
2. TDS Return not filed by deductor.
3. Statement of tax deduction not filed with TDS
Return.
4. Statement of tax deduction filed with wrong
PAN which is not yours.
 FOLLOW UP WITH DEDUCTOR TO -
• Ensure that correct PAN has been intimated to
the deductor.
• Ensure that the deductor has deposited tax
deducted. Regular view of 26AS by the tax payer
helps in timely follow up with the deductors.
• Taxpayer can use “View TDS/TCS credit” facility
using the link https://www.tdscpc.gov.in/app/
tapn/tdscscredit.xhtml to know whether the
deductor/collector has filed quarterly TDS/TCS
statement provided the PAN and the count on
records present.
Taxpayer can also raise a grievance at “Taxpayer
Grievance Module” on TRACES.
Designed and Printed by: Excel Printing Universe, New Delhi

incometaxindiaofficial IncomeTaxIndia
December, 2021

IncomeTaxIndia.Official Income Tax India

DIRECTORATE OF INCOME-TAX
(Public Relations, Publications & Publicity)
6th Floor, Mayur Bhawan, New Delhi
This Brochure should not be construed as an exhaustive statement of the law. For details
reference should always be made to the relevant provisions in the Acts and the Rules

www.incometax.gov.in
FAQ’s on AIS (Annual Information Statement)

Q-1 What is Annual Information Statement (AIS)?

Ans.
Annual Information Statement (AIS) is comprehensive view of information for a taxpayer displayed in
Form 26AS. Taxpayer can provide feedback on information displayed in AIS. AIS shows both reported
value and modified value (i.e. value after considering taxpayer feedback) under each section (i.e. TDS,
SFT, Other information).
The objectives of AIS are:

• Display complete information to the taxpayer with a facility to capture online feedback
• Promote voluntary compliance and enable seamless prefilling of return
• Deter non-compliance
(“For more info. navigate to AIS under Services Menu after login”)

Q-2 What is the Difference between AIS and Form 26AS?

Ans. AIS is the extension of Form 26AS. Form 26AS displays details of property purchases, high-value
investments, and TDS/TCS transactions carried out during the financial year. AIS additionally includes
savings account interest, dividend, rent received, purchase and sale transactions of securities/immovable
properties, foreign remittances, interest on deposits, GST turnover etc.
AIS also provides the taxpayer the option to give feedback on the transactions reported. Further, the
aggregation of transactions on information source level is also reported in TIS.
(“For more info. navigate to AIS under Services Menu after login”)

Q-3 How can I view the Annual Information Statement?

Ans. You can access the Annual Information Statement functionality by following below mentioned
steps:
Step 1: Login to URL https://www.incometax.gov.in/
Step 2: Click on “Annual Information Statement (AIS)” under “Services” tab from the e-filing portal after
successful login on e-filing portal.
Step 3: Click on AIS tab, on the homepage.
Step 4: Select the relevant FY and click on AIS tile to view the Annual Information Statement.
(“For more info. navigate to AIS under Services Menu after login”. More details on AIS can be found in
Annual Information Statement User Guide available in “Resources” section at AIS Homepage.)
Q-4 What are the components of Annual Information Statement (AIS)?
Ans- The information shown on AIS is divided in two parts:
PART A- General Information
Part-A displays general information pertaining to you, including PAN, Masked Aadhar Number, Name of
the Taxpayer, Date of Birth/ Incorporation/ Formation, mobile number, e-mail address and address of
Taxpayer.
PART- B
• TDS/TCS Information: - Information related to tax deducted/collected at source is displayed here.
The Information code of the TDS/TCS, Information description and Information value is shown.
• SFT Information: - Under this head, information received from reporting entities under Statement
of Financial transaction (SFT) is displayed. The SFT code, Information description and Information
value is made available.
• Payment of Taxes: - Information relating to payment of taxes under different heads, such as
Advance Tax and Self-Assessment Tax, is shown.
• Demand and Refund: -You will be able to view the details of the demand raised and refund
initiated (AY and amount) during a financial year. (Details related to Demand will be released soon)
• Other Information: - Details of the information received from the other sources, such as data
pertaining to Annexure II salary, Interest on refund, Outward Foreign Remittance/Purchase of
Foreign Currency etc., is displayed here.
(“For more info. navigate to AIS under Services Menu after login”)

Q-5 What does “General information” part contains under AIS?

Ans-
General information displays the general information pertaining to you, including PAN, Masked Aadhar
Number, Name of the Taxpayer, Date of Birth/ Incorporation/ Formation, mobile number, e-mail address
and address of Taxpayer.
(“For more info. navigate to AIS under Services Menu after login”)

Q-6 Can I track the Activity history in AIS?

Ans- Yes, you can track the activity history in AIS by clicking on the Activity history button on AIS
homepage. You will be provided a summary view of activity performed on the AIS functionality. System
generated Id (Activity ID) will be created for each performed activity, Activity date, Activity description
and detail will be displayed under this tab.
(“For more info. navigate to AIS under Services Menu after login”)
Q-7 What does Taxpayer Information Summary (TIS) contain under AIS?
Ans. Taxpayer Information Summary (TIS) is an information category wise aggregated information
summary for a taxpayer. It shows processed value (i.e. value generated after deduplication of
information based on pre-defined rules) and derived value (i.e. value derived after considering the
taxpayer feedback and processed value) under each information category (e.g. Salary, Interest, Dividend
etc.). The derived information in TIS will be used for prefilling of return, if applicable.
You will be shown various details within the Taxpayer Information Summary such as,
• Information Category
• Processed Value
• Derived Value
Further, within an Information Category following information is shown:
• Part through which information received
• Information Description
• Information Source
• Amount Description
• Amount (Reported, Processed, Derived)
(“For more info. navigate to AIS under Services Menu after login”)

Q-8 In what all formats can I download my AIS?

Ans. You can download Annual Information Statement (AIS) in PDF, JSON, CSV file formats.

Q-9 How do I submit feedback on the information?

Ans. You can submit feedback on active information displayed under TDS/TCS Information, SFT
Information or Other information by following below mentioned steps:
Step 1: Click on “Optional” button mentioned in the Feedback column for relevant information. You will
be directed to ‘Add Feedback’ screen.
Step 2: Choose the relevant feedback option and enter the feedback details (dependent on feedback
option).
Step 3: Click “Submit” to submit the feedback

(“For more info. navigate to AIS under Services Menu after login”)
Q-10 What will happen once I submit the feedback?
Ans. Upon successful submission of feedback on AIS information, the feedback will be displayed with
the information and the modified value of the information will also be visible with the reported value.
The activity history tab will also be updated, and you will be able to download Acknowledgement
Receipt. Email and SMS confirmations for submission of feedback will also be sent.(“For more info.
navigate to AIS under Services Menu after login”)

Q- 11 Is there any confirmation will be received on submission of AIS feedback?

Ans- Yes, after successful submission of your feedback on AIS information, the activity history tab will be
updated, and you will be able to download Acknowledgement Receipt of the same. Email and SMS
confirmations for submission of feedback will also be sent.

Q-12 What is AIS Consolidated Feedback file?

Ans. AIS Consolidated Feedback file (ACF) gives the taxpayers a facility to view all their AIS feedback
(other than feedback, ‘Information is correct’) related information in one pdf for easy understanding.
After submitting the feedback of the AIS, you can download the AIS consolidated feedback file (PDF).
(“For more info. navigate to AIS under Services Menu after login”)

Q-13 Is there any limit on the number of times I can modify a given feedback?
Ans. Currently, there is no limit on the number of times you can modify previously given feedbacks.

Q-14 Can I verify the GST turnover in AIS?

Ans- Yes AIS does display the information related to GST turnover under information code (EXC-GSTR3B).
The same would be visible in the Other Information tab in AIS.
Q-15 Is there any video tutorial available for AIS?
Ans- Yes, there is an informational video available on YouTube for AIS. This video can be accessed here
Basic information on Annual Information Statement functionality - YouTube
 Annexure - A

Frequently Asked Questions (FAQs) on e-Verification Scheme 2021.

Note:

I. The FAQs on the e-Verification Scheme, 2021 (hereafter ‘FAQs’) aim to

provide general guidance in understanding the procedures and processes of
the e-Verification Scheme, 2021 issued vide Notification no. 137/2021 dated
13.12.2021. These are presented in an easy-to-understand manner without
using the technical wordings of the Income Tax Act, to the extent possible.

II. These FAQs are informative and advisory in nature and are subject to
updation as required. These should not be used as a basis for any legal
interpretation of the e-Verification Scheme, 2021 or the Income Tax Act, 1961.
The taxpayers may like to take an informed decision on their tax matters in
this regard.
 FAQs for e-Verification Scheme 2021 for uploading on www.incometax.gov.in

1. Where can I see my financial transaction reported to Income Tax Department by

Sources/Reporting Entities?

The financial transactions gathered by Income Tax Department are about your
receipts which attract TDS/TCS, immovable property purchase or sale, bank
deposits, investment in shares/mutual funds, time deposits etc. All these
transactions can be viewed by you in the AIS portal of your income tax account for
FY 2020-21 onwards. The steps involved are:

a) Login to e-filing portal by using the URL

https://eportal.incometax.gov.in/

b) On the home page click the tab “Services”

c) Select “Annual Information Statement (AIS)” in the menu under the tab
“Services”, you will be taken to the AIS portal

d) On the AIS portal, select the relevant Financial Year and click on “Annual
Information Statement” to view the financial transactions.

2. What should I do if I find a transaction which is incorrectly recorded or which

does not pertain to me?

As detailed above, once you are viewing information under AIS, click on a specific
information. Once the information details are seen, on the right side is a feedback
button by using which taxpayer can provide feedback from the menu options
available.

3. What happens after I raise my objection to any transaction reported in AIS?

Income Tax Department will in the next 3-4 months initiate a process of contacting
the Source/Reporting Entity which reported the information/transaction and will
seek confirmation about the correctness of the data.

Once this process is rolled out then:

i. If the Source/Reporting Entity agrees that there has been a mistake, the data
will be corrected in due course of time after the Source/Reporting Entity files

1
 its corrected statement. This process is done through an automated
Information Technology driven procedure.

ii. If the Source/Reporting Entity stands by the data and does not support your
objection, further explanation/evidence will be called from you under the e-
Verification Scheme which is explained in the following questions.

4. What is the e-Verification Scheme, 2021?

i. When a financial transaction reported by a Source/Reporting Entity is not

considered/included by you while filing your Return of Income, a
computerized process of identification of such mismatch is undertaken.

ii. A communication is sent to the Source/Reporting Entity seeking

confirmation of the transaction/data reported by it. The Source/Reporting
Entity can either confirm the information provided by it or can state that it
has wrongly reported and can change the information by revising its
statements filed earlier.

iii. If the Source/Reporting Entity confirms the information, proceedings under

the e-Verification Scheme will be initiated for the taxpayer, in appropriate
cases. A notice u/s 133(6) will be issued to the taxpayer, electronically
through theCompliancePortal which is accessible
throughhttps://eportal.incometax.gov.in, seeking explanation/evidence to
support why the transaction has not been considered/included in the Return
of Income. The notice could also be issued through Speed Post in exceptional
circumstances.

iv. The explanation/evidence/compliance to the notice u/s 133(6) of the IT Act,

1961 is to be done by the taxpayer through electronic means, using the
Compliance Portal (https://eportal.incometax.gov.in)

v. Based on the explanation/evidence provided, a view will be formed by the

Prescribed Authority conducting the e-Verification about the transaction
having been/not having been suitably reflected in the return of income.

vi. After this process, a communication will be sent to the taxpayer informing:

a) No further clarification on the issue under verification proceedings is

presently required from taxpayer, or

b) The explanation is not found sufficient to explain the mismatch in the

specific information and the taxpayer may consider updating the return of
income u/s 139(8A) of the Act, if eligible.

2
5. What is the usefulness of the e-Verification Scheme, 2021?

Various steps have been taken to facilitate voluntary compliance. Sharing of

information through AIS and pre-filling of return of income being the most recent.
The e-Verification Scheme is another such step. It will help:

 Correct inaccuracy in data/information provided by Source/Reporting

Entity

 To inform the taxpayer about any transaction which could have been
missed in computing income and taxes, and in filing Return of Income.

 To provide an opportunity to the taxpayer to correct any omissions in

Return of Income by filing an updated return of Income and pay tax due on
the income missed in the original Return of Income.

 To provide an opportunity to the taxpayer to explain a transaction being

verified before any further action by way of Assessment or Re-assessment is
undertaken.

6. Is the e-Verification Scheme same as e-Verification of return?

After filing the income tax return (ITR), you need to verify it to complete the return
filing process. Without verification within the stipulated time, an ITR is treated as
invalid. e-Verification is the most convenient and instant way to verify your ITR.
You can e- Verify your return online using OTP on mobile number registered with
Aadhaar, net banking, digital signature etc.

The e-Verification Scheme 2021 is totally different from e-Verification of return.

7. Where do I see the notice u/s133(6) issued to me seeking my explanation on a

transaction not included by me in the Return of Income? How do I file my
response to the notice u/s 133(6) issued under the e-Verification Scheme, 2021?

Or

What should I do when I receive notice for e-Verification?

The notice u/s133(6) issued under the e-Verification Scheme will be visible to you in
the Compliance Portal (accessible through https://eportal.incometax.gov.in).
Normally you will also be alerted through an SMS on your registered mobile phone

3
and will also receive it on your registered email address. The steps involved in
accessing the notice u/s133(6) and filing the response electronically are:

Step 1: Taxpayer will Login to the e-filing portal by using the URL
https://eportal.incometax.gov.in/

Step 2:Go to “Pending Actions” tab, click on “Compliance Portal” and select “e-
Verification”

Step 4: Click on applicable Financial Year

Step 5: Click on the 'DIN' to download the notice.

Step 6: Click on 'Submit' link to provide the response.

Step 7: Enter the remarks, attach the supporting document and click on
"Submit" to submit the response to the notice.

Responses have to be filed electronically as detailed in the steps above

8. At the time of responding to the notice of e-Verification, after log in, nothing
appears and only a blank screen page opens up. What should I do?

Please enable the ‘pop ups’ from ‘Privacy and Security’ settings in Google chrome,
Firefox, etc.

9. How do I know that notice under e-Verification has been issued to me?

The Income Tax Department will send a notice u/s 133(6) of the Income Tax Act,
1961.

This will be visible on your e-filing portal account on incometax.gov.in. The notice is
also emailed to the latest email address submitted to the Income Tax Department
while filing the return of income. You will also receive SMS on the latest mobile
number registered with your PAN.

10. What do I do in case I am having difficulty in accessing the Compliance Portal for
viewing notices or submitting responses?

4
You may log your complaint at the helpdesk for the “Compliance” portal by calling
18001034215. Please note that helpline number is unique for each portal. Please use
helpline for Compliance Portal for redressal of difficulties.

11. How does the taxpayer verify the genuineness of the notice received?

Very soon a facility will be provided for verification of the genuineness of the notice
from the DIN mentioned in the notice. The taxpayer will be enabled to verify the
DIN from the e-portal and see if the notice is genuine by clicking on the
Authenticate Notice/Order Issued by ITD link in the Quick Linkssection found in
the e-portal and following the process as mentioned in the e-portal.

The taxpayer has to furnish the response to the notice only through the Compliance
Portal of the Income Tax Department https://eportal.incometax.gov.in and not
through email. The instructions for furnishing the information are mentioned in the
Annexure-2 of the notice issued to the taxpayer.

12. While responding to the notice issued u/s.133(6) of the Income-tax Act in the
Compliance portal, the system/portal is not accepting the attachments of size
above 10 MB. How to submit such large documents?

With each response, 10 documents of size 10MB each can be uploaded as

attachments. Large documents which are to be attached can be split into documents
of less than 10 MB parts and can be attached and uploaded.

13. What happens if my explanation is found to be satisfactory?

A communication is sent to taxpayer informing that “No further clarification on the

issue under verification proceedings is presently required from you”. However, this
could change if any additional evidence/information comes to the knowledge of
Income Tax Department subsequently.

14. What happens if the explanation is not found satisfactory?

5
If the explanation is not found satisfactory, the e-Verification proceedings will be
concluded with a communication to the taxpayer informing: “The explanation is not
found sufficient to explain the mismatch in the specific information and the taxpayer
may consider updating the return of income u/s 139(8A) of the Act, if eligible.”
Subsequently if the taxpayer does not Update the Return of Income within the due
time, Income Tax Department will undertake risk-assessment based initiation of
proceedings like Assessment or Re-assessment which could lead to tax demand and
penalty etc.

15. What can I do if I realize that I have missed a transaction while calculating my
income in the Return of Income already filed by me?

You may consider Updating your Return of Income under Section 139(8A) of the I.T.
Act, 1961, if eligible, by paying tax on the missed income along with additional tax to
avoid further proceedings in the form of assessment/re-assessment which could
lead to tax demand and penalty.

16. Can I respond to the notice u/s133(6) of the I.T. Act, 1961 that I have updated my
return of income by paying additional tax on the transaction being e-verified by
Income Tax Department?

Yes. This should be explicitly stated in the response. The updated return of Income
will be verified with the information and an appropriate decision will be taken by
the Income Tax Department.

17. Do I need to pay any penalty while updating my return?

No, there is no penalty as such. However, you have to pay an additional tax of 25%
in the first year and 50% in the second year while updating your return.

18. Is it possible for me to have a physical hearing with the officer?

This scheme does not allow for any physical hearing by the Prescribed Authority.
You are requested to file your reply online through the portal. In case of any query
or clarification the Prescribed Authority will communicate through the portal and

6
give you adequate opportunity to clarify along with supporting documents. There is
provision for video conference facility in exceptional case. This facility is under
development.

19. Why should I update my return?

The Income Tax Department is giving you an opportunity to pay tax on the income
that was not shown by you in your return but about which the Income Tax
Department had received information. In the event of you not availing this
opportunity to pay tax on such income and update your return, the Income Tax
Department may, based on facts, initiate appropriate proceedings under the IT Act,
1961.

20. What is updated return and its utility to the taxpayer?

Finance Bill 2022 has inserted a new section, Section 139(8A) in Income Tax Act. This
new section provides for filing of ‘Updated Return’ by the taxpayers. The taxpayer
can file an updated return within two years from the end of the relevant Assessment
Year. So during the current financial year 2022-23, taxpayers can file ITR-U for AY
2020-21 and AY 2021-22. i.e., the return for FY19-20 can be updated till 31st March
2023.

Updated return can be filed irrespective of the fact, whether the original return was
filed by the taxpayer or not. However, to file an updated return, the taxpayer has to
meet the conditions prescribed in section 139(8A) of the IT Act 1961, including:

1. The updated return can be filed only if the taxpayer has to disclose any
additional income, which was missed / omitted earlier, and pay the
additional tax thereon.

2. Updated return cannot be filed to reduce any income and report loss or
increase the loss thereby resulting in reduction of tax liability or increase in
tax refund.

3. The option of updated return can be opted only once for one assessment year.

4. If the updated return is being filed within 12 months from the end of the
relevant assessment year, then an additional income tax of 25% and interest
thereon shall be payable. If the return is filed within 24 months, from the end
of the relevant assessment year, then an additional income tax of 50% and
interest thereon shall be payable.

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This facility of filing an updated return can also be viewed as an opportunity to
disclose the earlier missed income and pre-empt further proceedings under the I.T.
Act.

21. How is the e-Verification Scheme different from scrutiny

assessments/reassessments?

This is primarily a preliminary verification based on the information received by the

IT Dept from various reporting entities. No order is required to be passed in this case
because this is not a notice for assessment or reassessment. This is only for
verification. Once information is verified as correctly reflected in ITR, further steps
may not be taken by the Income Tax Department with reference to the specific
information verified. If information is not included in the return of income, then the
taxpayer can update the tax return as mentioned above.

22. What should the taxpayer do if information provided by the Income Tax
Department is not correct?

Or

What should I do if the duplicate entries are there in notice received by me

under the e-Verification Scheme?

If you go through the notice and find that the information as mentioned in the notice
does not belong to you or is a duplicate entry or is incorrect (fully or partially), you
should clearly state the same in the response filed on Insight and provide supporting
evidence for the same, where applicable. The Income Tax Department would then
confirm with the source the veracity of the information and take appropriate action.

23. What if you agree to the mismatch between return of income and information
explained to you in the notice u/s 133(6) of the IT Act, 1961, under e-Verification
Scheme?

The taxpayer can update his ITR under section 139(8A) of the Act, and pay the
additional taxes. A response can be submitted that the mismatch is accepted and ITR
has been updated or will be updated.

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24. What are the possible reasons for difficulties faced in filling responses to the
notice u/s 133(6) of the IT Act, 1961?

Common reasons:

 Response of Taxpayer is to be submitted on compliance portal which is

accessible via e-filing portal(www.incometax.gov.in). Other portals of Income
Tax Department are for other specified compliances and will not accept
responses to notice under e-Verification Scheme.

 Web browser used by the taxpayer is not updated to the latest version and
hence the website is not supported by the browser.

 POP-UP Blocker of the web browser is enabled and it is blocking the access to
the response window.