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Deductees reported in TDS Statements with structurally Valid, but actually Invalid PANs

CPC(TDS) has observed from its records that many deductors have reported deductees with invalid PANs in the quarterly TDS statements. These PANs appear structurally valid but they are invalid.

CPC(TDS) has issued a letter to all deductors in this regard. The letter produced is as follows:

Dear Deductor ( TAN XXXXXXXXXX ),

Centralized Processing Cell (TDS) has observed from its records that you have reported deductees with invalid PANs in your quarterly TDS statements. These PANs appear structurally valid, however, they are actually invalid, as they are not available in the PAN Master records.

For example, ARUPS4625S appears to be a valid PAN according to the alphabets and numerals in its structure, however, this is an invalid PAN, as this is not available in PAN Master.

What is the impact:

  • The impact of such errors is significant in nature, in view of following:
    • As per section 206AA, the tax is to be deducted at a higher rate, in case of reporting of invalid PANs. Therefore, Short Deduction is charged even if the tax has been deducted at the Section Rate, due to the applicability of section 206AA.
    • The deductor will not be able to generate TDS Certificates for their deductees with invalid PANs.
    • The taxpayer will not be able to avail correct TDS Credits

What actions to be taken:

  • The impact of such errors is significant in nature, in view of following:
    • PAN Verification facility on TRACES can be used for verifying the deductees. You are requested to Login to TRACES and navigate to “Dashboard” to locate “PAN Verification” in the Quick Links menu.
    • You can also use “Consolidated TAN – PAN File” that includes all the valid PANs attached with the respective TANs. To avail the facility, Login to TRACES and navigate to “Dashboard” to locate “Consolidated TAN – PAN File”.
    • To correct an invalid PAN reported earlier, a C5 Correction Statement is required to be filed.
    • The PANs can also be corrected using our Online Correction facility with Digital Signatures. To avail the facility, you are requested to Login to TRACES and 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.

You can reach out to us on ContactUs@tdscpc.gov.in or call our toll-free number 1800 103 0344.

CPC (TDS) is committed to provide best possible services to you.

CPC (TDS) TEAM

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Downloading of Form16/ Form 16A from TRACES

Due date to download Form 16 for FY: 2013-14 is 31st May, 2014.

Due date to download Form 16A for Q4 FY: 2013-14 is 30th May, 2014.

Delay in requesting certificates may involve a fine of Rs. 100 per day u/s 272(A)(g) subject to an upper limit of the tax deducted. Click here for more details

Sl. No. Form Periodicity Due Date
1 16 Annual By 31st day of May of the financial year immediately following the financial year in which the income was paid and tax deducted
2 16A Quarterly Within fifteen days from the due date for furnishing the statement of tax deducted at source under rule 31A
  • To download the Form 16/Form 16A, registration is required at TRACES website
  • To view the tutorial on how to download Form 16 from TRACES, click here
  • To view the tutorial on how to download Form 16A from TRACES, click here
  • Password for form 16/16A file is your TAN number

After downloading the zip file from TRACES website, you have to convert the zip file into PDF Form 16/form 16A files. For this, you need PDF Generation Utility, which can be downloaded from TRACES website.

 

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Facility to download TCS Certificates in Form 27D from TRACES website

CPC(TDS) has provided a feature of downloading Form 27D, the Tax Collection Certificate for Deductees forming part of TCS Statements, filed in the form of 27EQ.

Refer to the following details for the above functionalities:

  • Form 27D is Tax Collection Certificate in respect of deductees, reported in Form 27EQ Statements.
  • Please refer to the provisions of Section 206C(5) of the Income Tax Act, 1962 :
    • Every person collecting tax in accordance with the provisions of this section shall within [such period as may be prescribed from the time of debit] or receipt of the amount furnish to the buyer [or licensee or lessee] to whose account such amount is debited or from whom such payment is received, a certificate to the effect that tax has been collected, and specifying the sum so collected, the rate at which the tax has been collected and such other particulars as may be prescribed.
  • Please note the following provisions of Rule 37D of Income Tax Rules, 1962:
    • The certificate of collection of tax at source under sub-section (5) of section 206C to be furnished by the collector shall be in Form 27D.
    • The certificate referred to in sub-rule (1) shall specify:-
      • valid permanent account number (PAN) of the collectee;
      • valid tax deduction and collection account number (TAN) of the collector;
      • (1) book identification number or numbers where deposit of tax collected is without   production of challan in case of an office of the Government;
      • (2) challan identification number or numbers in case of payment through bank;
      • receipt number of the relevant quarterly statement of tax collected at source which is furnished in accordance with the provisions of rule 31AA.
  • The certificate in the Form No. 27D referred to in sub-rule (1) shall be furnished to the collectee within fifteen days from the due date for furnishing the statement of tax collected at source specified under sub-rule (2) of rule 31AA.
  • To download the certificates, you are requested to navigate to the “Downloads” menu.
  • After completing details for FY and Quarter, KYC needs to be completed for submitting request for downloads.
  • The report will be made available under “Requested Downloads” menu. Please note that the report will be made available in Zipped file format, which needs to be extracted using the PDF Generation utility for Form 27D.
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Transaction Based Report for NRI deductees at TRACES

CPC(TDS) has introduced a new feature on TRACES for generating Transaction Based Report (TBR) in respect of deductees reported in 27Q TDS Statements. The report provides with a summary of transactions in respect of NRI Deductees who have not reported their PANs (PAN Not Available)

Details about Transaction Based Report:

  • The feature is available only in respect of NRI deductees, who have been reported in Form 27Q of TDS Statements
  • The deductee with whom the transaction has been entered into, has reported PAN Not being Available
  • The report is available for FY 2013-14 onwards
  • The summary of transactions includes the following key information, besides others:
    • Nature of Remittance,
    • Amount Credited / Paid,
    • Country of Remittance,
    • Amount of Tax deducted
    • Reason for higher Rate of deduction of Tax (PAN Not Available) 

Process for downloading of Transaction Based Report:

To download the report, you are requested to navigate to “Transaction Based Report” under “Downloads” menu.

After completing details for FY and Quarter, KYC needs to be completed for submitting request for   downloads.

 The report will be made available under “Requested Downloads” menu.

Please note:

  • The report will be made available in Zipped file format, which needs to be extracted using the PDF Generation utility for TBR.
  • TBR zipped file is password protected, which is the TAN of the deductor.
  • The reports can also be digitally signed while downloading or you may choose to continue without Digital Signature.
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