OBTAIN PAN OF ALL THE DEDUCTEES/PAYEES EVEN IF THE AMOUNT PAID IS BELOW THRESHOLD LIMIT.

Be cautious while filing 26Q return of TDS

As per the requirements of 26Q return, deductor has to provide the complete details of total amount paid under a particular expense head such as Interest, Commission, Brokerage, Contract Payments, Rent, Professional Fee etc.

Deductor while filing the TDS returns has to take care that their tds 26Q return will not be validated if they are going to provide the data of the deductees under various heads of payments, when the amount paid is below thrashold limit specified in the act in the relevant section unless the PAN is not mentioned against these entries, though not statutorily required to obtain the same. There seems to be a big flaw in the RPU provided vis-a-vis FVU

For Example: If you have to provide the details of person A to whom interest less than Rs. 5000 has been paid say Rs. 4000, you are not supposed to obtain the PAN of that Payee under the provisions of income tax law. However you will have to mark flag ‘Y’ in that case. But your return will not be validated until and unless you don’t put the PAN of that payee.

Same is the case with other payments made below threshold limits specified under those relevant sections of TDS. Alternatively you will have to skip those entries to file the return.