Firms confused over new CBDT diktat

MUMBAI: A recent notification by the Central Board of Direct Taxes that makes it mandatory for all corporates to file TDS (tax deducted at source) returns electronically, has put assessees and their tax consultants in a spot.
The fine print says that while preparing the e-TDS return (to be submitted on a floppy), the corporate has to quote the permanent account number (PAN) of all employees whose tax has been deducted.If these PAN numbers are not made available, the tax department will give seven days for their submission. If not met, the TDS return will be treated as invalid.
"This is in an impossible instruction (to comply with), as most companies deal with hundreds of contractors and suppliers, apart from employees, whose tax is deducted at source and who do not have a PAN number. If they don’t care about applying for a PAN, how can a company be held responsible for it?" says Anish Thacker of tax consultancy Bharat S. Raut & Co.
The notification states, "While preparing e-TDS returns, the e-deductor (the corporate) shall quote his PAN and tax deduction account number, as also the PANs of all persons in respect of whom tax has been deducted by him.
"If the deficiencies (non-availability of all PANs) are not removed by the e-deductor within seven days, the assessing officer may declare the return as invalid."
With the deadline for filing TDS returns just days away (September 30), assessees are also in a fix, as the e-intermediary (the body to whom the e-TDS return has to be submitted) has not yet been decided on.
The notification also does not specify whether physical returns of the TDS certificate of contractors, suppliers and employees have to be submitted along with the e-TDS returns on floppies.
Besides, the notification does not specify the format of electronic filing. “We don’t even know whether we should use Word or Excel," says Thacker.