Key Features – File Validation Utility (FVU) version 7.2

New File Validation Utility has been released by NSDL for filing of 26Q, 27Q and 27EQ and the same is effective from 1st October 2021. Following are the changes

A. Addition of new Section code 194P for Form 24Q
194P: Deduction of tax in case of specified senior citizens
This section will be applicable for regular and correction statements pertaining to FY 2021-22 onwards.

B. Addition of new Section code 196D(1A) for Form 27Q
196D(1A): Income of specified fund from securities referred to in clause (a) of subsection (1) of section 115AD (other than interest income referred to in section 194LD).
This section will be applicable for regular and correction statements pertaining to FY 2020-21 Q3 onwards where date of payment is on or after 01/11/2020.

C. Addition of new Section code 194Q Form 26Q
194Q: Payment of certain sums for purchase of goods
This section will be applicable for regular and correction statements pertaining to FY 2021-22 Q2 onwards.

D. Addition of new remark values for Form 27Q

1. Remark I: In case of no deduction is in view of sub-section (2) of section 196D in respect
   of income of the nature of capital gains on transfer of securities referred to in section
   115AD paid or payable to a Foreign Institutional Investor
   This remark will be applicable for section codes 196D & 196D(1A) only.
2. Remark H: If no deduction is in view of proviso to sub-section (1A) of section 196D in
   respect of an income paid to a specified fund which is exempt under clause (4D) of
   section 10
   This remark will be applicable only for section 196D(1A)
3. Remark J: If deduction is at higher rate in view of section 206AB for non-filing of return
   of income by the non-resident having a permanent establishment in India
   This remark will be applicable to all section codes except 192A, 194LBC, 194N and
   194NF

E. Addition of new remark values for Form 26Q

1. Remark P: In case of No deduction is on account of payment of dividend made to a
   business trust referred to in clause (d) of second proviso to section 194 or in view of any
   notification issued under clause (e) of the second proviso to section 194
   This remark will be applicable only for section 194
2. Remark Q: In case of No deduction in view of payment made to an entity referred to in
   clause (x) of sub-section (3) of section 194A
   This remark will be applicable only for section 194A
3. Remark U: If the deduction is on higher rate in view of section 206AB for non-filing of
   return of income
   This remark will be applicable to all section codes except 192A, 194B, 194BB, 194LBC,
   194N and 194N

F. Addition of remark value in Form 27EQ
Remark I: If collection is at a higher rate in view of section 206CCA
This remark will be applicable to all applicable to all collection codes
These changes will be applicable for regular and correction statements pertaining to FY 2021-22 Q2 onwards

G. Change in validation related to section code 196D in Form 27Q
Existing remark value “C” will be applicable for this section with their existing validations in case of non-availability of PAN.
Newly added remark “I” and existing remark “G” will also be applicable to this section code for no deduction.
Remark “I” will be applicable in case of nil challan return.
These changes will be applicable for regular and correction statements pertaining to FY 2021-22 onwards

H. Changes in validations of Section 194K of Form 26Q
Existing Remark “B” (In case of no deduction on account of declaration under section
197A) will also be applicable to section for this section
These changes will be applicable for regular and correction statements pertaining to FY 2021-22 onwards.

This version of FVU is applicable with effect from October 01, 2021 onwards.

Compliance Check Functionality for Section 206AB & 206CCA of Income-tax Act 1961

Compliance Check Functionality for Section 206AB & 206CCA of Income-tax Act 1961

Section 206AB and 206CCA inserted in the Income-tax Act,1961 (effective from 1st July
2021), imposed higher TDSITCS rate on the “Specified Persons’ defined as under,

1. For the purposes of this section ‘ specified person” means a person who has not filed
   the retums of income for both of the two assessment years relevant to the two previous
   years immediately prior to the previous year in which tax is required to be collected,
   for which the time limit of filing retum of income under sub-section (1) of section 139
   has expired; and the aggregate of tax deducted at source and tax collected at source
   in his case is rupees fifty thousand or more in each of these two previous years.
   

Provided that the specified person shall not include a non-resident who does not have
a permanent establishment in India.

Explanation.-For the purposes of this sub-section, the expression ‘permanent
establishment” includes a fixed place of business through which the business of the
enterprise is wholly or partly carried on.”

2. To facilitate Tax Deductors and Collectors in identification of Specified Persons as
defined in sections 206AB and 206CCA, the Central Board of Direct Taxes (“CBDT”), in
exercise of powers conferred under section 138(1 )(a)(i) of Income-tax Act, 1961 (Act), has
issued Order via F.No. 225/671202111TA.1I dated 21 .06.2021 , directing that Director General
of Income-tax (Systems), New Delhi shall be the specified income-tax authority for furnishing
information to the “Tax DeductorlTax Collector”, having registered in the reporting portal of
the Project Insight through valid TAN, to identify the ‘Specified Persons’ for the purposes of
section 206AB and 206CCA of the Act through the functionality “Compliance Check for
Section 206AB& 206CCA”.

3. Income Tax Department has released a new functionality ·Compliance Check for
Section 206AB & 206CCAn to facilitate tax deductors/collectors to verify if a person is a
“Specified Person” as per section 206AB & 206CCA. This functionality is made available
through (https:llreport.insight.gov.in) of Income-tax Department. Kindly refer to CBDT Circular

4. The following procedure is laid down for sharing of information with tax
deductors/collectors:

a ) Registration: Tax Deductors and Collectors can register on the Reporting
Portal by logging in to e-filing portal (http://www.incometax.gov.inl) using e-filing
login credential of TAN and clicking on the link “Reporting Portal” which is available
under “Pending Actions” Tab of the e-filing Portal. After being redirected to the
Reporting Portal, the tax deductor/collector needs to select Compliance Check (Tax
Deductor & Collector) under Form Type. The details of the principal officer also need
to be provided by clicking on “Add Principal Officer” button. The principal officer is
the authorized person of the tax deductor/collector to use the Compliance Check
functionality on reporting portal. After submission of registration request, email
notification will be shared with the Principal Officer along with ITDREIN details and
login credentials

b) Accessing the Compliance Check functionality: Principal OffICers of the
entities (Tax Deductors & Collectors) which are registered with the Reporting Portal
through TAN shall be able to use the functionality after login into the Reporting Portal
using their credentials. After successfully logging in, link to the functionality
“Compliance Check for Section 206AB & 206CCA” will appear on the home page of
the Reporting Portal

c) Using “PAN Search” mode: Under the “Compliance Check for Section
206AB & 206CCA” page, “PAN Search” tab may be selected to access the
functionality in PAN Search mode. In this mode single valid PAN along with captcha
can be entered at a time and output will be available with following fields,

• Financial Year: Current Financial Year
• PAN: As provided in the input.
• Name: Masked name of the Person (as per PAN).
• PAN Allotment date: Date of allotment of PAN.
• PAN-Aadhaar Link Status: Status of PAN-Aadhaar linking for individual
PAN holders as on date. The response options are Linked (PAN and Aadhaar
are linked), Not Linked (PAN & Aadhaar are not linked), Exempt (PAN is
exempted from PAN-Aadhaar linking requirements as per Department of
Revenue Notification No. 37/2017 dated 11th May 2017) or Not-Applicable
(PAN belongs to non-individual person).
• Specified Person uts 206AB & 206CCA: The response options are Yes
(PAN is a specified person as per section 206ABI206CCA as on date) or No
(PAN is not a specified person as per section 206AB/206CCA as on date).

Output will also provide the date on which the “Specified Person” status as per
section 206AB and 206CCA is determined.

d) Using “Bulk Search” mode: Under the “Compliance Check for Section
206AB & 206CCA” functionality page, “Bulk Search” tab may be aeIected to access
the functionality in Bulk Search mode. This mode involves following steps:
i) Preparing request (Input) file containing PANs: Under the “Bulk Search”
page, CSV Template to enter PANs details may be downloaded by clicking on
“Download CSV template” button. PANs for which “Specified Person” status
is required may be entered in the downloaded CSV template. The current limit
in the number of PANs in a single file is 10,000.
ii) Uploading the input CSV file: Input CSV file may be uploaded by clicking on
Upload CSV button. Uploaded file will start reflecting with Uploaded status.
iii) Downloading the output CSV file: After processing, CSV file containing
“Specified Person” status as per section 20SAB & 206CCA of the entered PANs
will be available for download and “Status’ will change to Available. Output
CSV file will contain PAN, Masked Name, Specified Person Status as per
section 20SAS & 206CCA, PAN-Aadhar Link status and other details as
mentioned in paragraph c) above. After downloading of the file, the status will
change to Downloaded. The download link will expire and status will change to
Expired after specified time (presently 24 hours of availability of the file).

5. For any further assistance, Tax Deductors & Collectors can refer to Quick Reference
Guide on Compliance Check for Section 206AS & 206CCA and Frequently Asked Questions
(FAQ) available under “Resources’ section of Reporting Portal. They can also navigate to the
“Help” section of Reporting Portal for submitting query or to get a call back from Customer
Care Team of Income-tax Department. Customer Care Team of Income-tax Department can
also be reached by calling on its Toll Free number 1800 1034215 for any assistance.