The devil, they say, lies in the detail. And here’s one that threatens
to derail the income tax return filing process. Individuals now need
to mention a unique transaction number (UTN) against every tax
deducted at source entry.
The problem, though, is that infrastructure to generate UTNs is still
not in place, leaving income tax assessees in a lurch as July 31,
2009, the last date to file returns for the financial year 2008-09,
fast approaches. “Nobody can say whether the returns will be valid if
filed without UTN,” says Sandeep Shanbhag, a chartered accountant and
director, investment and tax advisory, Wonderland Consultants.
In a circular dated May 21, 2009, Munesh Kumar, secretary, Central
Board of Direct Taxes, said, “The credit for any TDS…claim will be
allowed…if the assessee quotes the relevant UTN for every TDS.”
Simply put, if a UTN is not mentioned against a TDS transaction then
the tax already paid by the individual will be considered unpaid.
It then becomes necessary that companies, who deduct tax every month
against salaries, provide employees with UTNs against these
deductions. This UTN then needs to be mentioned in the Indian Income
Tax Return form that is used for filing tax returns.
“You won’t get the tax credit unless the UTN is quoted. If they go
ahead with the regulation, the person will have to pay the tax all
over again along with the interest and penalty,” says Shanbhag.
This logic will also hold for any TDS that a bank might have cut on
interest earned on fixed deposit. Like employers, even banks will need
to provide a UTN.
As per the May 21 circular, the National Securities Depository Ltd is
supposed to issue UTNs to the deductor of TDS (companies, banks) who,
in turn, has to pass on the UTN to the deductee.
That, clearly, isn’t happening anytime soon primarily because the
change was introduced on May 21, 2009, nearly two months after the
last financial year came to an end.
“We don’t issue certificates in the middle of the year and the UTN
number will be given only by May 2010,” says KVS Manian, group head -
retail liabilities & branch banking, Kotak Mahindra Bank.
None of the form 16s received from salaried clients has any mention of
UTNs, say chartered accountants. “UTN is to be provided for the
accounting year 2008-09.Everybody – banks, employers etc – has issued
TDS certificates and form 16 as per the old law,” says Ameet Patel,
partner at chartered accountancy firm Sudit K Parekh & Co.
Aware of the problem, the CBDT is in the process of amending this
rule. Shishir Jha, CBDT spokesperson, says, “Action is being taken to
ensure that assessees do not face any difficulty. Individuals are
requested to wait a week for clarifications.”
Given the uncertainty, it is advisable to wait for a week or two
before filing your IT-return, says Shanbhag. “We have 40 more days to
go till July 31. So, when there is such a big issue involved, one
should wait,” he says.
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Since I cannot increase the content of life by increasing its duration,
I will increase it by increasing its intensity…Art, Music, Poetry,
and everything else that I do have this one purpose—increasing the
intensity of my consciousness and life.
HOMI BHABHA (1934)
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