TDS IN FINACLE AND ITS MENUS ~ TEAM OF UBIRRB

TDS ON TERM DEPOSIT & ACTIVITIES OF BRANCHES

by sadan-420

According to income tax Act, Bank has obligation to deduct TDS from the interest income of customers which is earned from Term deposit type account. Generally if a customer provides his/her PAN number, the rate of TDS is 10% on such interest income if the same exceeds the ceiling of Rs10000.00 (Rupees Ten Thousand only). If a customer has no PAN number, the rate of TDS is then 20% for the same.

Though the rate of TDS is 10% or 20% on interest income, the Income tax Act considers that a person who is entitled to receive such interest which is subject to TDS can submit form No. 15 G or 15H for no deduction of tax at source. In such cases the bank can pay interest without deducting any tax from interest even if the same exceeds the ceiling of Rs10000.

Pro-forma of Form no.15G and 15H are given at the last of this topic.

DEFFERENCE BETWEEN 15G & 15H

FORM NO.15G	FORM NO.15H
A person who is below 65 years can file form 15G	However, only a person of 65 years or above is eligible to file Form 15 H
Anybody whose tax on estimated interest income is not NIL or having income from interest or surrender value of pension plan above Rs1,00,000/-, cannot file DECLARATION u/s 15G	Senior Citizen who are only eligible to file the Declaration in Form 15H has no such conditions .This form can be submitted by senior citizen only if tax on estimated income of the senior citizen is NIl.

Flow of TDS process in Finacle is given hereunder:

In Finacle, there are three TDS codes (slabs). These are TDS0 (Zero%), TDS10 (Ten%), TDS20(Twenty%).

And TDS related menus are:- TDSCALC, RFTDS, RMTDS, TDSIP/HTDSIP, CUS/HCUS, TM.

1] TDSCALC:- It is used for TDS calculation.

2] RFTDS:- It is used to refund TDS amount to customers.

3] RMTDS:- It is used to remit the TDS amount to Government.

4] TDSIP/HTDSIP:- It is used for inquiry and printing purpose.

5] CUS/HCUS:- It is for customer selection.

6] TM:- For transaction of TDS amount.

Primarily the deduction is based on the information which are available in customer level. So system takes care the TDS calculation and deduction as per customer wise. Hence, the main function of the Branch has to provide appropriate data in “CUSTOMER TAX DETAILS” at the time of creation/ modification of customer through “CUMM” menu option as shown below:

For deduction of TDS in proper & right way, Branch needs to fill the details of the following fields:-

1] PAN/GIR No: 10 digits PAN allotted by INCOME TAX authorities should be provided, if available. Otherwise, put “NA”.

2] Tax Slab: “TDS20”, “TDS10” and “TDS0” [TDS Zero] are earmarked for the field. Branches should select “TDS20” if PAN is not available, “TDS10” if PAN is available. “TDS0” will be for some Govt. Depts/Institutions/Individual/Groups where Income Tax is not applicable as per IT Act.

3] TDS Exempt End Date: If TDS is exempt due to certain rules of IT/ as per our Circular relating to that, Branches have to provide the last date of current financial year for such exemption and that is valid only for the current FY.

4] TDS Remarks: Appropriate remarks for which the TDS Exempt End Date is provided should be written here (like 15G/15H etc.)

5] TDS Exempt Ref. No: Sometimes Exemption is permissible with the valid document issued by IT Authority. Put the Reference number of such document/letter in this field.

6] TDS Exempt Submission Date: Put the date of submission of document to the Bank relating to such Exemption.

[Please Note: 1) TDS Exempt Submission Date/TDS Exempt Ref. No /TDS Remarks fields will not be used by the system for any processing, but are required for report generation and for issuing TDS certificate.

2) Branches have to check all old Cust_IDs as well as newly created Cust_IDs of all Term Deposit accounts and to correct the entries in above fields, if any wrong entry is located deviating the above guidelines.]

After all, If wrong information put in Tax Slab of CUMM, wrong calculation will be done by the system. If Tax Slab is modified in CUMM, then TDSCALC menu must be run after correction in CUMM. System will rectify the previous calculation automatically.

After deduction of TDS, system parks the TDS amount in “TDS ON BANK DEPOSIT a/c”. Now it is bank’s duty to remit the parked TDS amount to the Tax Authority of Government. For remittance to the Tax Authority, menu is RMTDS. And it should be run for two times – before remittance and after remittance. RMTDS run before remittance is necessary for record of remittance in the system. RMTDS run after remittance is necessary to save the details of reference of remittance. PLEASE NOTE THAT NO TRANSACTION IS HAPPENED AT THE TIME OF RMTDS. TRANSACTION WILL BE HAPPENED WHEN PAYMENT IS MADE INVOKING TM MENU BY DEBITING “TDS ON BANK DEPOSIT a/c” AFTER COMPLETION OF PROCEDURE OF RMTDS before remittance.

RMTDS before remittance

1) Report To – “Manager”

2) Date – Start Date (in case of first report it might be Migration Date)

3) To – End Date (Date up to which the amount of TDS to remit)

4) Accrued TDS – “N”

5) Remit Option—“G” Press àF4 then F10

6) Fore /Back Groundà F

7) Print Required? N (To see from PR)

8) Press F10

RMTDS after remittance

Procedure of filling is as same as before remittance. Only ‘Remit Optn’ will be ‘C’. Then press F4. The following screen will be appeared:-

Here, branches have to put the Necessary Challan Number, bank name etc. in “Remittance Details” field selecting all the accounts appeared through down arrow key and commit. The system will record the remittance details for the accounts.

RFTDS for refunding to customer

As per existing system, tax is deducted from the customer’s account as and when due and then it needs to be remitted to tax authorities before a specified date. During the intervening period, if for any reason, the TDS deducted seems wrong or amount needs to be refunded, it can be done. Refund of amount before remittance to tax authorities is possible with the help of a menu option RFTDS.

The criteria that can be specified for refund of TDS is possible only for one customer. “Refund Cust Id” field is mandatory.

The following screen will be seen when RFTDS menu is invoked:

Fill the respective fields as hereunder:-

Report To = Manager

Cust ID = Provide the Cust ID of the A/c Holder

Transaction Type = T

Press F4

Based on the criteria given by the user, system will display records as under:

Provide Operative Account (SB/CC/CA/OD) of the customer where refund to be made > Press F10 > Fore /Back Ground = F > Print Required? = Y/N > Press F10.

From the displayed records, the user has to select a particular record for refund. By default, all the records will be displayed as selected for refund. There will be two fields available for refunding purpose, Refund Amt. (for refund amount) and Refund Acct (for refund account). By default refund amount is populated with a value which is equivalent to TDS outstanding amount (TDS recovered – TDS already refunded – TDS already remitted). User can only reduce this default value manually. In case of transfer transaction, the refund account field is mandatory field. In this case, the account is default populated as TDS operative account from which TDS has been recovered. User should replace it with any other account. If TDS operative account for the customer is not specified and refund has not already happened for the record, refund account will be populated as null by the system. User has to enter it (mandatory field). In this case, no check is done for type of refund account. PLEASE REMEMBER THAT REVERSAL OF TDS AMOUNT SHOULD NOT BE ROUTED THROUGH TERM DEPOSIT A/C TO DETAIN SYSTEM MATURITY VALUE.

TDSIP / HTDSIP for inquiry and printing TDS certificate

TDSIP/HTDSIP menu can be used for both inquiry and printing purposes. With this the user can

● Inquire

● Print TDS certificate at customer level

● Reprint TDS certificate at customer level

● Print TDS certificate at Account level

● Reprint TDS certificate at Account level

● Print TDS summary

● Print covering schedule

The user has criteria selection feature also while doing inquiry or printing. The screen interface is as under:

For TDS summary:- TDSIP > Enter > Report Option=5 > Cust Id= Put customer ID > F4.

The following screen will be displayed:-

Again press F4. The following screen will be displayed:-

Press F10 to generate the report.

The summary report of existing TDS will be generated.

Branches can generate other reports also using the different options. There are nine options.

CUS/HCUS for CUSTOMER ACCOUNT SELECTION

In CUS/HCUS menu option field “TDS Exempted?” is available. If this field is entered as Y, only the customers exempted from TDS in current financial year are selected. If this field is entered as N, only the customers eligible for TDS in current financial year are selected. If this field is entered as null, system retrieves all records for the current financial year. This selection will be in accordance with the other filter criteria. This menu can be used for reviewing the list of exempted customers for submission of exemption certificate.

(Please Note: TDS exemption is valid for current Financial Year based on the date provided in “TDS Exempt End Date”)

SAMPLE OF FORM-G

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