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Tips to avoid defaults in TDS Statements

One can avoid defaults in the TDS statements, by way of adherence to the following basic principles:   

• Timely Payment of total taxes deducted/ collected

• Correct Reporting with regard to PANs, Tax Rate and Challans

• Complete Reporting for all Deductees

• Timely filing of TDS Statements   

Following are some important facts to be adhered to, while submitting TDS statements, to avoid each type of Default:   

• Late Payment Defaults:

• Short Payment Defaults:

  • All the taxes deducted must be deposited with challan 281 quoting correct TAN, Assessment Year, Minor Head etc.
  • Challan details/BIN details quoted in the statement should be correct. Challans can be validated by using Challan Status Inquiry(CSI) file. Correct details can also be verified at TRACES in “Challan Status” menu under “Statement Status” after login.
  • There should not be any difference in the amounts quoted in “Deducted” and “Deposited” columns of the deductee rows.
  • Challans quoted in the statement must have balance available for consumption against specified deductee rows. Available balance can be verified at TRACES in “View Consumption Details” under “Statements/ Payments” menu after login.
  • Government Deductors need to report Book entry flag as “Y” in challan details.   

• Short Deduction Defaults:

  • Taxes must be deducted at correct rates specified in the Act. The Rate table can be accessed at TRACES for correct tax rates.
  • Correct flags (A, B, C, T and Y) must be raised for no deduction/ lower deduction/ higher deduction, as appropriate.
  • The PAN for deductees must be valid and correct. TAN-PAN Master can be downloaded from TRACES and be used to file statement to avoid quoting of incorrect and invalid PANs.
  • Correct and valid 197 Certificates must be specified. E-tutorial can be referred to for the purpose of validation.
  • For 24Q statements, correct flags should be raised for Woman/ Man/ Senior Citizen/ Super Senior Citizen deductees, as may be appropriate.
  • DTAA flag “B” must be raised under section 195 of the Act, at the time of filing 27Q  statements.

• Late Deduction Defaults:

  • Taxes must be deducted at the time of Payment or Credit, whichever is earlier.   

• Late Filing Defaults:   


Issuance of online certificate u/s 195(2) and 195(3) – reg

TDS Instruction No . 51
Directorate o f Income Tax (System)
ARA Center, Ground Floor, E -2, Jhandewalan Extension
New Delhi – 110055

F.No.SW/TDS/02/02/2013/DIT(S)-II                                  Dated 04.02.2016


The Pr . Chief Commissioner of Income-tax (International Taxation), New Delhi

The Chief Commissioners of Income-tax (International Taxation), Mumbai, Bengaluru

The Commissioners of Income-tax (International Taxation), Ahmedabad, Bengaluru Chennai, Delhi (I , II & III), Hyderabad , Kolkata , Mumbai (I & II) and Pune

The Commissioners  of Income-Tax (L.T . U.) New Delhi, Mumbai, Bengaluru, Chennai, Kolkata

Sir / Madam ,

Sub: Issuance of online certificate u/s 195(2) and 195(3) – reg.

Request has been received from field formations and tax payers to provide functionality for  issue of  online certificate  u/s  195(2) and  195(3) for  lower / no deduction  as manual certificates were not being considered during processing of TDS statements by CPC TDS.

2. In this regard, existing functionality to issue online certificate u/s 197 in ITD application has been enhanced to issue online certificate u/s 195(2) and 195(3) as under:

(i) Assessing Officers of International taxation charges who are authorized to issue certificate u/s 195(2) and 195(3) may be assigned the role AR_I NT_TAXATION in ITD  application by respective Computer Center through HRMS module , if not already  assigned . The certificate type i.e. 197/195(2)/195(3) also needs to be specified

(ii) For issue of certificate u/s 195(2) and 195(3), jurisdiction restriction of PAN has been relaxed. For issue of certificate u/s 195(3) , TAN and Amount has been made optional.

(iii) As per existing procedure for issue of certificate u/s 197 , certificates u/s 195(2) and 195(3) is required to be approved by Range officer through ITD application.

3. The above functionality may kindly be brought to the notice of AOs under your charge.

Yours faithfully,

(Sanjeev Singh)
Addl DGIT(S)-2, New Delhi


CBDT notifies procedure for email communication between taxman and taxpayer

The CBDT has notified the format and procedure for the taxman and taxpayers to usher in an ambitious pilot project of using emails as the new mode of communication between the two sides, as part of the government’s bid to reduce grievances of the tax-paying public.

An official notification has been issued which spells out the procedure, formats and standards for ensuring “secured transmission” of emails between the Assessing Officer (AO) of the IT department and the assessee stating all communication between the two sides will be done through PDF file format and over bonafide email ids.

The new notification is a follow up of an amendment made by the Central Board of Direct Taxes (CBDT) in the Income Tax Act in December last year, which allowed emails to become the new mode of interaction tool between the AO and the tax-paying individual.

Under the new procedures, the taxman will send emails, for issuing notices and summons, through the government registered ‘’ email domain and the attached PDF document will have his or her designation and signature.

In response to such an IT notice, a taxpayer will have to use his registered email id with the department to submit the details called for, in a PDF format.

“In case the total size of the attachments exceed 10 MB then the assessee shall split the attachment and send in as many emails as may be required to adhere to the limit of attachment size of 10 MB per email,” the CBDT notification issued yesterday said.

It said, “any email, in response to the notice issued by the AO, received from the primary email address of the assessee shall be considered as a valid response to the notice”.

The CBDT, in the same notification, has also mandated that the taxman will maintain an audit trail of all this e-communication with a taxpayer in the central database of the IT department for future reference and as a record management of the entire transaction.

The new directives also allow a taxpayer to physically submit the reply of such e-notices in case there is a technical problem in their email like a situation of email failure or a full mailbox.

“This shall be treated as adequate compliance,” it said.

The CBDT said these procedures are “applicable to the assessment proceedings in respect of select non-corporate assessees as part of the pilot project on paperless assessment proceedings and can be extended to other assessees or other proceedings as may be notified by the board subsequently.”

The department to reduce the taxpayers’ visit to the IT office had launched the ‘pilot’ project in this regard late last year and the first set of e-communications were decided to be mailed to 100 chosen people each in Delhi, Mumbai, Bengaluru, Ahmedabad and Chennai regions.

This was done after the CBDT had asked the department to “initiate the concept of using email for corresponding with taxpayers and sending through emails the questionnaire, notice etc at the time of scrutiny proceedings and getting responses from them”.

“This would eliminate the necessity of visiting the Income Tax offices by the taxpayers, particularly in smaller cases, involving limited issues and where taxpayer is able to provide details required by the Assessing Officer (AO) without necessitating his physical presence,” the order had said.

Source: Economic Times


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