Dr. Lalit Setia: Duties of DDOs in Taxation Matters

Duties of DDOs in Taxation Matters

Introduction:

In the Financial Year 2020-21, the new regime of income tax rates be available as an option to the taxpayers. Why Government brought this new regime as an option? After analysing the data it was found that during last two decades due to a great number of deductions and exemptions available to the taxpayers, instead of 62% rise in the number of individuals filing income tax returns; there was only 22% rise in number of individuals paying income taxes. Rest 40% increased return filers were able to prove 'nil' tax liability. It's easy to detect the wrong deductions and exemptions claimed by the salaried individuals because their incomes are credited in their bank accounts but in case of self-employed and businessmen, it is very difficult. Therefore, this option is provided to easily curb the wrong practices of non-salaried individuals.

In Government Departments, a Drawing and Disbursing Officer (DDO) is responsible to ensure the compliance of taxation laws and he is expected to not only submit the tax returns but also to guide and suggest other officers for taking care of various provisions of taxation. The DDO adopts participatory approach and include Accounts Section to enforce the taxation rules. The Government ensure the compliance of financial rules, taxation rules through DDOs. The workshops are generally organized on taxation issues. There are three types of major duties related with taxation matters:

(i) Income Tax Return (ITR):

Who should file Income Tax Return and How:

The DDOs are expected to guide the Government employees with regard to accurate procedure of filing Income Tax Return. Most of the Government employees are salaried individuals, in case their salaries and other incomes exceed Rs. 2,50,000 (Basic Exemption Limit); it becomes mandatory to file Income Tax Return by 31^st July of the Assessment Year. The Income Tax Return can easily be filed either is physically mode or electronic mode. The individuals with total income less than 5 Lacs can file their return in physical form by downloading the Income Tax Return Form from website of Income Tax Department i.e. incometaxindia.gov.in.

Filing of Income Tax Return:

Go to http://incometaxindia.gov.in/ and open the menu ‘Forms/Downloads’ and click upon ‘Income Tax Returns’. Thereafter, download Income Tax Return-1 and its instructions provided along with it. Even if the total income becomes equal or more than 5 Lacs, an individual should download this form and fill it as a preliminary work before filing Income Tax Return in electronic mode. Thereafter, in case of income less than Rs. 5 Lacs, the form may also be submitted in the Income Tax Department. For individuals with income more than Rs. 5 Lacs, it is required to fill the same details by accessing the website https://www.incometaxindiaefiling.gov.in/

Type of Income Tax Return Forms:

Every DDO should be equipped with the knowledge of various types of Income Tax Return Forms i.e. ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6, and ITR-7.

Income Tax Return Form No. ITR-1:

This form is suitable only for individuals being a resident (other than not ordinarily resident) having total income up to Rs. 50 lacs, having Income from Salaries, one house property, other sources (Interest etc.), and agricultural income up to Rs.5 thousand. The Government employees who have ownership of more than one house property or who have ownership of agricultural land with agriculture income more than Rs. 5000 should not file Income Tax Return Form No. 1. They should file Income Tax Return Form No. 2.

Income Tax Return Form No. ITR-2:

The ITR Form No. 2 is for Individuals and HUFs not having income from profits and gains of business or profession. This form is used only if an individual’s sources of incomes are only Salary but also house property or capital gains. In case, the individual is also earning from business or profession, then he should file Income Tax Return Form No. 3.

Income Tax Return Form No. ITR-3:

The ITR Form No. 3 is for individuals and HUFs having income from profits and gains of business or profession.

Income Tax Return Form No. ITR-4:

This form is suitable only for Individuals, HUFs and Firms (other than LLP) being a resident having total income up to Rs.50 lacs and having income from business and profession which is computed under sections 44AD, 44ADA or 44AE

Income Tax Return Form No. ITR-5:

This form is not filed by individuals. It is suitable for persons other than, - (i) individual, (ii) HUF, (iii) company and (iv) person filing Form ITR-7.

Income Tax Return Form No. ITR-6:

This form is suitable for Companies other than companies claiming exemption under section 11.

Income Tax Return Form No. ITR-7:

This form is suitable only for persons including companies required to furnish return under sections 139(4A) or 139(4B) or 139(4C) or 139(4D) only.

(ii) Tax Deduction at Source:

A Drawing and Disbursing Officer is also ‘Tax Deductor’ on behalf of Income Tax Department and he is also required to take Tax Deductor’s Account Number (TAN) from the Income Tax Department. Thereafter, he should register on https://tdscpc.gov.in/ with the TAN Number by clicking upon ‘Register as a new user’.

As per the provisions of Income Tax Act, 1961, the DDOs are responsible for tax deduction at source on specified types of payments made by the Government offices. The tax deducted at source should not be less than its requirement and it should be deposited in the Income Tax Department through using appropriate form and thereafter the details of the same should be submitted within the prescribed time. Apart from DDOs, the electronic TDS (e-TDS) return is also required to be filed by Companies, Persons required to get their accounts audited u/s 44AB of the Income Tax Act, 1961; and the deductors reporting more than 20 deductee records for any quarter of the financial year. The Government of India prepared and operate an integrated platform for providing various services to deductors known as TRACES (TDS Reconciliation Analysis and Correction Enabling System). The DDOs and Deductors can easily view the status of challans and TDS-TCS credit for a PAN on this portal. They can also download Conso File, Form 16 / 16A and Justification Report from this portal.

(iii) Goods and ServicesTax:

Every Drawing and Disbursing Officer should be aware of Section 51 of Goods and Services Tax Act 2017 and get registered as a deductor under the Act. Whenever a payment is made or credited to a supplier of taxable goods or/and services it is required to deduct Tax Deduction at Source on GST.

TDS on GST:

As per section 24(vi) of GST Act, a DDO will register himself by using TAN Number at the portal of GST i.e. www.gst.gov.in, and in case, he enters into a contract for purchase of goods or/and services with total value of taxable supply (excluding GST) more than Rs. 2.5 Lacs; he will deduct TDS on GST @2%. After deducting the TDS on GST, the same will be paid to the Government within 10 days after the end of the month in which deduction was made. Thereafter, he will also submit return in the Form GSTR-7 and furnish system generated TDS certificate in Form GSTR-7A to the deductee within 5 days of crediting payment of TDS to the Government (i.e. date of furnishing GSTR-7).

Penalties may be levied upon DDOs under GST:

In case, a DDO fails to make payment of deducted tax within prescribed time limits, he will have to pay the same along with interest imposed by the GST portal at the time of depositing payment of deducted tax with delay.

In case he failed to furnish Form GSTR-7 within 10 days after the end of the month in which deduction was made; late fees will be payable under section 47(1) i.e. Rs. 100 + Rs. 100 per day (maximum up to Rs. 5000) under each CGST and SGST means upto Rs. 10000.

In case he failed to furnish Form GSTR-7A; late fees will be payable under section 51(4) i.e. Rs. 100 + Rs. 100 per day (maximum up to Rs. 5000) under each CGST and SGST means upto Rs. 10000.

Further, in case, an excess payment of GST is deducted by mistake; a refund may be claimed by the DDO or Deductee as the case may be. However, in case excess tax gets credited to the deductee then the DDOs shall not be granted the refund.

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