Types of Corrections in TDS Returns

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There are 7 types of corrections namely C1, C2, C3, C4, C5, C9, Y. The following table briefly talks about each correction type:

Type Corrections in:
C1 Deductor details: All details of deductor except the TAN No. can be modified.
C2 Challan details: All details of the challan can be modified. C2 can include C1 type correction
C3 Deductee details: All details except the PAN number of the  Deductee can be modified. One may add/delete/modify a deductee in the existing challan.
C4 Salary Details: This type of correction is only applicable to correction of 4th Quarter statement of Form 24Q. All the details of the salary can be modified here except the PAN number of the employee. Here there is no provision of updating the record, a record has to be deleted and a new record has to be added with updated details.
C5 PAN: In this type of correction deductee PAN is updated. When Pan is updated for Salary record the same will also get updated in the deduction record. PAN has to be updated quarterwise i.e a separate correction return needs to be filed for each quarter where the PAN number is mentioned incorrectly.
C9 Addition of new Challans and/or Deductions: Any new addition of Challan and/or deductions forms Correction type C9. When a deduction is added with Tax amount zero then automatically a NIL challan is generated
Y TAN Number: This correction type is to modify the TAN number or when a challan is added or split by mistake
It may be noted the C1,C2, C3,C4,C5 and C9 type of correction may be made in the same single correction return whereas for Type Y a separate return needs to be filed.

Steps for Preparing Correction Returns

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Structure of PAN

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PAN stands for Permanent Account Number. This is a 10 character alpha- numeric number used for the identification of the tax paying Indian Nationals. Example: AAECP6176D, AGUPG4076H.

The first five characters are alphabets, next four are numerals and the last character is alphabet. Following is important to understand.

The fourth character indicates the type of holder of the card as under:

A — Association of Persons (AOP)

B — Body of Individuals (BOI)

C — Company

F — Firm

G — Government

H — HUF (Hindu Undivided Family)

L — Local Authority

J — Artificial Juridical Person

P — Individual

T — Trust(AOP)

K — Krish (Trust Krish)

The fifth character is the first character of either the last name or surname of an individual or first character of the name of holder which could be Entity, Trust, Society or Organisation.

The last character is an alphabetic check digit.

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Advantages of preparing TDS Returns In-house

Filing accurate TDS Returns on-time is the prime objective – whether done in-house or outsourced. Some of the key advantages do it in-house is summarized as under:

  • All relevant data i.e. tax deductions and its payments is readily available
  • It is simple to record this data and prepare the TDS Return for filing
  • Convenient to double check for any data entry / careless errors
  • Use software features like PAN Verification and Default Prediction to avoid potential Notices
  • Complete grip on what is being filed – no external dependence
  • Chances of delayed filing reduces
  • Default Notices, if at all received, can be rectified swiftly
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