TDS Deduction in SCSS Accounts in CBS Post office – DOP Clarification
DOP issued clarifications regarding deduction and non deduction in SCSS accounts Order No. FS-13/7/2020-FS dated 15.09.2021
No. FS-13/7/2020-FS
Government of India
Ministry of Communications
Department of Posts
(FS Division)
Dak Bhawan, New Delhi – 110001
Dated 15.09.2021
To
All Head of Circles/Regions
Sub:- Deduction/Non-deduction of TDS in SCSS accounts in CBS post offices – reg.
This office is receiving various representations from SCSS account holder(s) that CBS post office are either not deducting TDS or deducting TDS even after submission of form 15G/15H or deduct TDS at the higher rate of SCSS interest payment.
2. It reflects that many post offices are not following prescribed procedure to configure TDS deduction on non deduction in Finacle in SCSS accounts.
3. In this connection, following guidelines in respect of TDS on SCSS accounts in Finacle are prescribed:-
- CIF of SCSS account holders should be seeded with vaild PAN and interest on SCSS account is taxable.
- TDS code is configured in CIF level for SCSS account holders. It should be TDSNR/TDSNS only and not as NOTAX.
- Tax liability will be calculated bases on the age of customer and interest payable for the financial year.
- Tax exemption is applicable only if the account is seeded with 15H/15G.
- TDS code NOTAX/TDSNR will be converted TDSNS on the date of Customer reaching 60 years of age, by a batch process.
- If PAN is invalid, TDS code will be converted as NOPNS by the batch process.
- CBS post offices shall ensure that SCSS accounts are updated 15H/15G for customers who have submitted form 15G/15H for current financial year.
- Updation of Form 15G/15H and PAN shall be done on or before 29th September 2021, as quarterly interest payout & TDS recovery will happen during EOD of 29/09/2021 (SCSCM / SCDEF / SCVRS accounts) and 30/09/2021 (SRSCM / SRDEF / SRVRS accounts)
- TDS recovery gets reported to CSI-GL on 30/09/2021 and refund will not be possible after 30/09/2021.
- 15H/15G should be updated for such accounts using CSCAM menu and verified without fail.
- Once 15H/15G is entered, tax category at account level will get updated to ‘NO TAX’.
- Tax Recovery matrix is shown below.
| CIF Level | Account Level | TDS Recovery based on total interest payable for all the accounts under a CIF |
|---|---|---|
| NOTAX | TDS/ no tax | NIL (incorrect as per ruilings) |
| NOPAN | TDS | 20% |
| NOPAN | No tax (15H/15G) | NIL |
| NOPNS | TDS | 20% |
| NOPNS | No tax (15H/15G) | NIL |
| TDSNR | TDS | 10% (if interest >10000 Annual ) |
| TDSNR | No tax (15H/15G) | NIL |
| TDSNS | TDS | 10% (if interest >50000 Annual ) |
| TDSNS | No tax (15H/15G) | NIL |
4. While reviewing PAN attached with SCSS accounts in Finacle, it is observed that 18494 PAN attached with SCSS accounts are invalid (list is attached for reference)
5. It is responsibility of Concerned CBS post office for updation of form 15G/15H and correct PAN. Quoting invalid PAN may attract penalty u/s 272B of Income Tax Act-1961.
6. It is requested to circulate these guidelines to all CBS post offices for information, guidance and necessary action.
7. This is issues with approval of the competent authority.
Yours Sincerely
Devendra Sharma
Assistant Director (SB-II)