RBI Directs Banks to Issue TDS Certificates on Time

What changed

RBI observed that some banks were not providing TDS certificates in Form 16A to customers on time, causing inconvenience in filing income tax returns. The central bank has now formally advised banks to put in place systems to ensure timely issuance of these certificates, without waiting until the last moment.

What it means for you

Banks must now prioritize timely delivery of Form 16A to all customers from whose income tax was deducted at source. This directive, issued under the Banking Regulation Act, aims to protect depositor interests and improve customer service. Non-compliance could lead to regulatory scrutiny and customer dissatisfaction.

What banks were required to do at the time

• Review your current process for issuing Form 16A to ensure it meets the timelines prescribed under Income Tax Rules.
• Put in place systems that will enable timely provision of Form 16A to customers within the prescribed time-frame.
• Avoid waiting until the last moment to issue TDS certificates.
• Set up internal monitoring to track issuance dates and flag any pending certificates before deadlines.
• Communicate with customers about the availability of Form 16A and provide easy access through digital channels.

Who it affects

All scheduled commercial banks (excluding Regional Rural Banks), Bank customers from whose income TDS is deducted, Bank operations and compliance teams, Branch managers and customer service staff