10 August 2009



The existing system of TDS and TCS and its module of Tax Information Network was introduced in 2004. This present system is inadequate to force compliance of TDS and TCS provisions. It is not possible for ITD to match TDS/TCS credit claimed by the Deductee and the details uploaded by the Deductor in Tax Information Network of the ITD. The new provision envisages the allotment of UNIQUE TRANSACTION NUMBER (UTN) for each TDS/TCS transaction. This will enable matching of TDS/TCS deposited by the Deductor against credit claimed by Deductee in his Return of Income. At present, when amount is paid directly by the assessee as Advance Tax or Self Assessment Tax through challan, an unique Challan Identification Number (CIN) is generated. This CIN is also mentioned in the Return Of Income and payments are matched in Income-tax Departments records. However under existing system it was difficult to match payment of TDS against the credit claimed the by the assessee, hence this new system of allotting UTN for each transaction is designed. This system was to be introduced from 1st April, 2009; however as the infrastructure to generate UTN was not in placed the scheme is postponed till further orders to be issued by ITD.

Salient features of New System, i.e UNIQUE TRANSACTION NUMBER (UTN)

i) Under the new system of UTN, all amounts of TDS deposits will have to be made electronically. No challans will be accepted at bank counters. Amount will have to be paid in Challan No. 17 instead of the existing ITNS 280.
ii) The challan will include details of each individual payment/deduction. It will mention PAN of Deductee, name of Deductee and Amount of TDS deducted. Thus payments under each challan will be matched with PAN of the Deductee and discrepancy arising due to filling PAN of Deductee in quarterly statements will be avoided. If a challan has to report more than 10 transactions, the details can be uploaded via utility to be provided by ITD. Otherwise the details can be filled online in Form-17
iii) After the amount is paid and details of TDS given along with challan, the ITD will issue a UTN for each transaction. This UTN is to be mentioned in Income-tax return of the Deductee. The Deductee will get credit of income-tax against UTN only.
iv) UTN will be intimated to the Deductor by email address provided by the Deductor, or it can also be downloaded from ITD site.
v) ITD will also create facilities to allow indepent viewing of UTNs by the Deductees. The Deductees can veiw his UTN online.
vi) The Deductor will have to mention the UTN in TDS certificate issued by him to the Deductee. New Form 16, Form 16A and Form27D have also been prescribed by CBDT.
vii) The Deductor will have to file TDS Compliance Statement in Form No.24C.
viii) The Quarterly Statement of deduction of tax and collection of tax has to be filed by the Deductor even if no TDS/TCS transaction is to be reported. Even in case where there is not transaction, all persons having TAN will have to file quarterly statements.

The ITD hopes that new system will enable quick and accurate reporting of the TDS amount deposited on behalf of the Deductee. The ITD had planned to issue UTN for all transaction for AY 2009-10 and the assessee should mentioned the same in Return on Total Income to be filed by him. But this was postponed as the infrastructure was not in place in time. Quoting or UTN will be compulsory for all returns filed in relation to AY 2010-11 as the system will be in place by that time.