TDSMAN Blog

Smart & Easy TDS Software for Preparing TDS Returns

TDSMAN Blog - Smart & Easy TDS Software for Preparing TDS Returns

Payment of taxes – Do’s & Don’t’s

Taxpayers, deductors or collectors can pay direct taxes through Authorised Bank branches either physically, through ATM or through internet.

Type of Challans to be used for tax payments

Challan Description
ITNS 280 For depositing Advance tax, Self Assessment tax, Tax on Regular Assessment, Surtax, Tax on Distributed Profits of Domestic Company and Tax on Distributed income to unit holders.
ITNS 281 For depositing TDS/TCS by company or non company deductee
ITNS 282 For depositing Securities transaction tax, Estate duty, Wealth-tax, Gift-tax, Interest-tax, Expenditure/other tax and Hotel Receipt tax
ITNS 283 For depositing banking cash Transaction Tax and FBT
Form 26QB Payment of TDS on Sale of Property
Demand Payment Payment against CPC (TDS) raised demand (only for TDS on Sale of Property)

Do’s

1. Mandatory details required to be filled in challan

a) PAN/ TAN

b) Name and address of the taxpayer (for physical challans)

c) Assessment Year

d) Major Head, Minor Head

e) Type of payment 

2.  Use challan type 281 for deposit of TDS/TCS payments.

a) Quote the correct TAN, name & address of the deductor on each challan

b) Verify your TAN details from Income Tax Department web-site (www.incometaxindia.gov.in) prior to depositing TDS/TCS.

c)  Use separate challans to deposit tax deducted under each section and indicate the correct nature of payment code in the relevant column in the challan.

d) Use separate challans to deposit tax deducted for different types of deductees. 

3. For Non TDS/TCS payments use challan types 280/282/283 as applicable.

a) Quote the correct PAN, name & address on each challan used for depositing the tax.

4. Mention/verify the correct Financial Year and Assessment Year in the challan before tax payment.

5. Payment confirmation: – Ensure that the Challan Identification Number (CIN) has been provided on the counterfoil issued after successful payment of tax. Challan Identification Number (CIN) comprises of the following

a) Seven digit BSR code of the bank branch where tax is deposited

b) Date of Deposit (DD/MM/YY) of tax

c) Serial Number of Challan 

6. Verify the tax payment information submitted to the bank.

a) Details available on the TIN website www.tin-nsdl.com under the link “Challan Status Inquiry”

b) In case the details are not available then you may contact the bank branch where the tax has been deposited. 

7. In case the counterfoil issued by the bank has been misplaced, kindly contact the respective bank/branch for details regarding the same.

8. Rectification/Correction in the Challan:- For rectifying errors in a physical challan, taxpayer may approach the Bank. Prescribed timelines for the same are as per table below

Sr. No. Type of correction on challan Period for correction request (in days)
1 PAN/TAN Within 7 days from challan deposit day
2 Assessment Year Within 7 days from challan deposit day
3 Total Amount Within 7 days from challan deposit day
4 Major Head Within 3 months from challan deposit day
5 Minor Head Within 3 months from challan deposit day
6 Nature of payment Within 3 months from challan deposit day

 Click here for more details.

9. Please visit TIN website www.tin-nsdl.com for details on preparation and furnishing TDS/TCS statements.

Don’t

1. Do not use incorrect type of challan for payment of taxes.

2. Do not make mistake in quoting PAN / TAN.

3. Do not give PAN in place of TAN or vice versa.

4. Do not use a single challan to deposit tax deducted for corporate and non corporate deductees.

5. Do not use same challan for depositing various types of tax like advance tax, self-assessment tax etc.

6. Do not make mistake in the F.Y. and A.Y. to be indicated in the challan.

7. If you have multiple TANs for the same division filing TDS statements, do not use different TANs in different challans. Use one TAN consistently and surrender the others.

Source: TIN-NSDL

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Statutory provisions attracted on failure to deposit tax in government account after deduction

Where the employee has deducted the tax at source but failed to deposit wholly or partly, the tax so deducted in government account, the following statutory provisions are attracted:-

  • Interest u/s 201(1A)- The deductor is treated as an assessee in default and interest u/s 201(1A) is leviable @1.5% for every month or part of the month on the amount of such tax from the date on which such tax was deducted to the date on which such tax is actually paid. Further, the tax along with the simple interest u/s 201(1A) becomes a charge upon all the assets of the deductor.
  • Penalty u/s 221- Penalty to the extent of tax not deposited is leviable by the A.O. as discussed earlier.
  • Prosecution proceedings u/s 276 B- Where the deductor has failed to deposit tax deducted at source, in govt. a/c without a reasonable cause then he is punishable with rigorous imprisonment for a term which shall not be less than 3 months but which may extend to 7 years and with fine.
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FAQ on Online Correction

What is Online Correction?

TRACES has provided the functionality of “Online Correction” where deductor can perform correction of TDS return /TCS return online. Following are the various facilities available through online correction:

  • View default summary
  • Rectifying challan mismatch cases
  • Addition of new challan to the statement
  • Pay 220/interest/levy
  • Add or Delete Salary Detail
  • Rectifying statement challan information
  • PAN Correction
  • Correction in Personal Information
  • Add/Modify deductee detail
  • Movement of deductee rows 

How to apply for Online Correction?

Login into TRACES as a deductor and raise the request for online correction under ‘Default’ Menu. For more information please refer E-tutorials.

Is it mandatory to have registration of Digital Signature on TRACES for all type of online correction ?

Digital Signature Matrix for functionalities through online correction:

Online-correction

I have filed a paper return, and want to make online correction through TRACES. How should I proceed?

Online correction functionality on TRACES will not be available in case of paper return .

What will the deductor do if the request for correction is rejected by TDSCPC?

Deductor has to check the rejection reason by selecting ‘Track Correction Request under ‘Default’ from main menu. Then select the request number and click on hyperlink ‘Rejected’ under the heading ‘Status’. Once the user takes the necessary action on resolution of rejection reason, he can resubmit the online correction request through TRACES.

Is it necessary for a sub-user to submit online Correction?

Yes, after making the online correction, sub- user will submit the corrections to admin user for final submission to TDSCPC. Sub-user will not be able to proceed further without the intervention of Admin User.

I have received the demand for late fee and paid the same, now how can I file online correction for the same through TRACES?

Login into TRACES, under ‘Defaults’ raised the request for online correction. Once request number is generated and request status is in available status, user can make the online correction by choosing the option ‘Pay late fee/ 220/ interest’. For more detail refer e-tutorial.

My Digital Signature Certificate (DSC) is already registered on TRACES. However, when I am trying to submit online correction, system does not allow me to proceed. What is the reason?

You need to clear the cookies and reload the website. If issue still persists check the browser being used. Internet Explorer 7,8 or 9, Google Chrome and Mozilla Firefox 17 & above are compatible browser for TRACES.

What all information can be changed in Personal Online Correction option?

By choosing ‘personal information’ option from ‘Type of correction’ drop down online correction option, you can edit communication detail of TAN as per statement and name & communication detail of authorised person as per statement.

Can I cancel the online correction request?

Yes, before submitting the correction for processing, you can cancel the request under ‘correction ready for submission’ where you will get an option to ‘cancel statement’. By clicking on this, correction will not be submitted to TDSCPC and will be cancelled.

Can I submit multiple corrections with one request number?

Yes, you can do multiple corrections with one request number for the statement pertaining to same financial year, quarter and form type.

Can Deductor do online correction for TCS?

Yes, deductor can file online correction for both TDS and TCS.

Can salary details in annexure 2 be edited through online correction?

User can update only PAN of the employee in annexure 2. For correction in other fields, user can delete the existing deductee row and/or add new deductee row.

Can Deductor change the category of Deductor through Online Correction?

No, deductor cannot change the “category of deductor” through online correction.

Source: TRACES

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Basic principles of TDS Compliance

The following are the basic principles of TDS compliance:

  1. Deduction/ Collection of Tax at Correct Rates
  2. Timely Deposit of Tax Deducted at Source
  3. Accurate Reporting of data related to tax deductions/ collections made
  4. Submission of TDS return within the due dates
  5. Verification and Issuance of TDS Certificates within time
  6. CPC (TDS) is now sending “Intermediate Default Communication” for PAN Errors and Short Payments, which can be corrected during the interim period of a week of etds filing, before CPC (TDS) proceeds with computing Defaults for the relevant statement.
  7. User-friendly Online Correction facility can be used for Correction of Deductees, Tagging Unmatched Challans and Payment of Fees/ Interest. (Please navigate to Defaults tab to locate Request for Correction from the drop-down menu. For any assistance, please refer to the e-tutorial available on TRACES).
  8. Aggregated TDS Compliance Report assists the PAN of the Deductor to administer TDS Defaults for associated TANs and to take appropriate action
  9. The Deductor’s Dashboard provides you all necessary information to assist you in “Compliance Self-Assessment” and to take appropriate action.
  10. Non-filing Self-declaration can be made by navigating to Statements / Payments menu and submit details under Declaration for Non-Filing of Statements.
  11. PAN Verification and Consolidated TAN – PAN File facility on TRACES can be used for verifying the deductees.
  12. The Conso Files and Justification Reports downloaded from TRACES help you to identify errors in submission of revised Quarterly TDS Statements.
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