This article explains the implications of FORM 26AS of the INCOME TAX ACT 1961 for NGOs. A case helps to make the theory clear and practical.
Introduction
In this article we discuss the administration of TDS transactions and how to resolve difficulties faced by NGOs.
Tax Deduction at Source (TDS) is an important segment of the Income Tax Act 1961 (ITA) and the detailed provisions are found in Sections 190 to 206CA. According to these sections, an NGO which makes certain payments, such as, salary, contractors’ bills, professional fees, commission to agents, interest, winnings and prizes, rent, etc., are obliged to deduct tax at source, under certain conditions, before releasing the payments. The tax has to be deposited with the Income Tax Department (ITD) within the prescribed time. The NGO is required to furnish quarterly TDS returns in the prescribed forms and within the prescribed time and to issue a certificate in Form 16 or 16A to the person from whom tax has been deducted at source.
Keeping track of all the TDS transactions and the procedures, mentioned above, can be laborious. Thanks to computerization, the administration of TDS transactions can be done now with greater ease and accuracy.
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Fr Trevor D’Souza OFM
