TDSMAN Blog

smart & easy software for eTDS & eTCS returns

No need to register PAN No. to view Tax Credit Statement

TRACES has provided advance features, to view 26AS Statement or Tax Credit Statement for AY: 2014-15 without registering PAN No. With this feature, Taxpayee can view their Tax Credit or Form 26AS Statement by the providing the details of mandatory field i.e. PAN of Deductee*, TAN of Deductor*, Financial Year*, Quarter* and Type of Return* etc.

Tax Payer can view their TDS/TCS credit from FY 2007-08  onwards.

 Details provided by TRACES in Form 26AS  are as under:

• Details of tax deducted on behalf of the tax payer by deductors

• Details of tax collected on behalf of the tax payer by collectors

• Advance tax / self-assessment tax / regular assessment tax etc. deposited by         the tax payers (PAN holders)

• Refund received during the financial year

• Details of transactions in Mutual Fund, Shares and Bonds, etc. (as reported by    AIR filer)

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Online TDS Statement Correction without Digital Signature at TRACES

CPC (TDS) has provided new enhanced features, to further add to the convenience of online facility of filing corrections to the TDS Statements. With this feature, you will be able to submit Online Corrections at TRACES without even having a Digital Signature. Currently over 20,000 deductors are already using the online facility for corrections.

To avail the facility, it is requested to Login to TRACES and navigate to “Defaults” tab to locate “Request for Correction” from the drop-down list. Click to “Proceed” in absence of Digital Signature.

Pre-requisites for filing online Corrections:

  • Digital Signature is not mandatory to be registered on TRACES for raising online corrections.
  • Only Challan Correction is permissible in absence of Digital Signature. Digital Signature enables you to carry out PAN Corrections as well.
  • Correct KYC information needs to be submitted for the purpose of validation.
  • Online request can be submitted, only if there is a regular statement already filed and processed.
  • All previous corrections pertaining to the statement should have been processed and the processing status can be verified from the Dashboard.

Functionalities available without Digital Signature:

Challan/BIN Correction

  • A list of all Matched and Unmatched challans can be viewed by clicking the appropriate tab.
  • Matched challans can be corrected for “Amount Claimed as Interest and Others”. Please note that Matched challans cannot be tagged.
  • Unmatched challans can be corrected and tagged to Deductee rows in the statement.
  • In addition, NO CHALLAN, which has been used for other purposes outside the system, should be tagged.
  • The corrections to above challans can be reset by clicking the Reset tab, if this requires to be further corrected.

Additional Functionalities available with Digital Signature:

 PAN Correction

  • Invalid to Valid PAN: The correct name of the Valid PAN will be displayed in “Name as per changed PAN”.
  • Valid to Valid PAN: If the new PAN entered is Invalid, a message is displayed in the “Action Status”. Please note that there is only one opportunity for a Valid to Valid PAN correction.
  • All the corrected rows can be viewed by clicking on “Show Edited Rows” on the screen.

Action Summary:

  • After carrying out all the corrections, Action Summary can be referred for all changes carried out.
  • Please click “Confirm” for all intended changes and the statement is ready for submission.

Actions to complete Submission:

  • Please navigate to “Defaults” tab to locate “Corrections Ready for Submission”.
  • Click on “Submit for Processing”, which will prompt to digitally sign the submission.
  • Once the correction is submitted successfully, a Token Number for the same will be available.
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Dealing with demand notice for late TDS returns

Article authored by Mr. Alok Patnia, founder of Taxmantra.com

Businesses especially small and medium scale has been badly hit by demand notices from Income Tax Department for payment of fees for late filing of TDS returns.

Actually with effect from July 1, 2012, the IT Department has made it mandatory to pay late fee of Rs. 200 per day since the due date, in case of late filing of TDS returns by imposition of new ruling u/s 234E.  This new provision, says that, “if TDS return is filed late, then U/s 234E late fees of Rs. 200/- per day will have to be deposited before filing TDS / TCS return, however it is specified that late fees should not exceed TDS/TCS deductible/collectible for that quarter. In addition to this, if TDS and late fee and interest due thereon as well as TDS return is not deposited within one year from the due date then penalty U/s 271H ranging from 10 thousand to 1 lakh may be imposed.”

It further states that, “as per the provisions of the law, if the Deductor is charged penalty u/s 234E, this penalty cannot be waived off and has to be paid to the IT Department using challan no. 281.”

In view of above, the IT department has issued demand notices to thousands of tax payers across the country for an estimated amount of Rs. 500 – 700 crore.

In this article, we would discuss the provisions in detail, and also try to find out if there a solution to tackle this kind of demand notice.

Income Tax Provision does not empowers IT department to raise such demand The provision clearly states that if TDS return is filed late, then under section 234E late fees of Rs. 200/- per day will have to be deposited before filing TDS / TCS return. Thus, once TDS statement has been accepted without late fee, and then such late fee cannot be recovered later on.

Further, it is pertinent to note that section 200(3) of the Income Tax act, 1961 states that TDS statement shall be filed after paying the tax deducted and rule 31A. Also, section 204 of the act has made mention of Section 190 to Section 203AA and Section 285, however, does not cover Section 234E.

Therefore if any late fee is due and not deposited along with the TDS statement, it cannot be recovered later by the IT department.

Hon’ble Kerala High Court Stayed the recovery of such fees

The Judgement of the Hon’ble High Court of Kerala has come as a big relief to the tax deductors.  This provision had been challenged in the Kerala High Court on the grounds that there is no provision in the Income Tax Act, 1961, which empowers the IT department to recover the penalty for late filing of TDS returns.

The levy in nature of “fee” has been challenged as illegal, arbitrary, unreasonable, invalid and unconstitutional in a writ petition filed by a lower primary school in Kerala.

The Kerala High Court has acknowledged and admitted the writ petition and has granted 2 months stay order to all the proceedings initiated against the petitioner under Section 234E of the Income Tax Act. Also, the standing counsel for the IT Department has taken notice for all the respondents in the writ petition.

Way Forward

In case if you have received a demand notice for late filing of TDS returns, you may look to peruse any of following measures.

Rectification under section 154 

Aggrieved taxpayers should look to file request for rectification under section 154 of the Income Tax Act, 1961.  On receiving the application the Assessing Officer has to pass an amendment order within 6 months from the end of the month in which the said application is received or he may reject the application within such time. If he rejects your above mentioned arguments with reasons not acceptable to you then you can go for an appeal.

Appeal with Commissioner of Income Tax (Appeals)

The concerned assessees receiving such notices must approach the IT Commissioner (CIT), Appeals for getting their penalty waived off. A taxpayer from Mumbai, being one such affected person, who has received a demand notice from the department for paying Rs 56,000 as late fee for defaulting on TDS, at the rate of Rs 200 per day since the due date. However, the affected assessee said such penalty can’t be recovered under any of the existing law and hence he has decided to go for appeal.

To Conclude 

An assessee cannot be treated in default also U/s 201(1) or 206C (6A) due to non-payment of late fee. And even the TDS return (statement) is also not treated as defective, like non-payment of tax and interest treats an income tax return as defective U/s 139(9) of the act.

If a person has not paid late fee then, even though it shall not be charge on all assets because Sec. 201(2) & 206C (8) does not cover late fee. Sec 234E also doesn’t say that in case of default in depositing late fee, the defaulting persons will be deemed an assessee in default.

In view of the above late fee cannot be recovered later on, by way of any notice , neither notice of demand U/s 156 can be issued for this. If any notice is issued by way of processing TDS statement U/s 200A, then rectification of mistake U/s 154 of the act or filing an appeal before Commissioner of Income Tax (Appeals) is an option.


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CBDT optimist on Standard Operating Procedure – Urges taxpayers to file rectification request for TDS mismatches

SECTION 139D OF THE INCOME-TAX ACT, 1961 – FILING OF RETURN IN ELECTRONIC FORM – EXTENSION OF FACILITY TO TAXPAYERS TO VERIFY IF DEMAND IN THEIR CASE IS DUE TO TAX CREDIT MISMATCH ON ACCOUNT OF INCORRECT FURNISHING OF SPECIFIED PARTICULARS AND SUBMIT RECTIFICATION REQUESTS WITH CORRECT PARTICULARS OF TDS/TAX CLAIMS FOR CORRECTION OF THESE DEMANDS

PRESS NOTE NO.402/92/2006-MC, DATED 17-4-2014

Detailed instructions have been issued by the CBDT to all the assessing officers laying down a Standard Operating Procedure (SOP) for verification and correction of demand by the AOs. As per this SOP, the taxpayers can get their outstanding tax demand reduced/deleted by applying for rectification along with the requisite documentary evidence of tax/demand already paid. The SOP also makes special provisions for dealing with the tax demand upto Rs. 1,00,000/- in the case of Individuals and HUFs in order to accommodate certain extraordinary situations. The SOP is expected to mitigate the long standing grievances of taxpayers by way of reduction/deletion of tax demands.

The CBDT has further noted that many taxpayers are committing mistakes while furnishing their tax credit claims in the return of income. Such mistakes include quoting of invalid/incorrect TAN; quoting of only one TAN against more than one TAN tax credit; furnishing information in wrong TDS Schedules in the Return Form; furnishing wrong challan particulars in respect of Advance tax, Self-assessment tax payments etc. As a result of these mistakes, the tax credit cannot be allowed to the taxpayers while processing returns despite the tax credit being there in 26AS statement. The CBDT, therefore, desires the taxpayers to verify if the demand in their case is due to tax credit mismatch on account of such incorrect particulars and submit rectification requests with correct particulars of TDS/tax claims for correction of these demands. The rectification requests have to be submitted to the jurisdictional assessing officer in case the return was processed by such officer, or the taxpayer is informed by CPC, Bangalore that such rectification is to be carried out by Jurisdictional assessing officer. In all other cases of processing by CPC, Bangalore, an online rectification request can be made by logging into e-filing website http://incometaxindiaefiling.gov.in as per the procedure given in detail in its Help Menu.

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