Reason for Mismatch of TDS & Correction Statement

      2 Comments on Reason for Mismatch of TDS & Correction Statement

MISMATCH OF TDS

1. A major problem noted across the country is that of mis-match of TDS payments claimed by the deductees in their returns of income vis- a -vis the TDS payments reflected by the deductors in their e-TDS returns and also the non reflection of the TDS payments in the system, in case the e-TDS returns have not been filed by the deductors.

2. As per the present procedure, all payment of Direct Taxes, either by way of TDS / TCS, Advance-tax, Self-Assessment Tax and Regular Tax are uploaded to the credit of the concerned assessee in the computer systems. The Assessing Officers give credit to the taxes, when they are uploaded to the account of the concerned assessee through the national network of the Income-tax Department. In case of TDS / TCS, unless the deductors correctly upload the details of the deductions including the PAN and the amount, the taxes cannot be given credit in the account of the concerned deductee.

3. In all cases where there is a mis-match, the tax credits cannot be given, resulting in withholding of refunds and also creation of infructuous demand.

Main reasons for TDS mismatch

Deductor related reasons :

  •  Non filing of quarterly TDS statements – Omission to include details of challan in TDS statement
  • Quoting wrong CIN in challan details in the TDS statement
  •  Entering wrong amount in challan details
  • Quoting of wrong TAN in the challan while remitting the TDS in the bank
  •  Quoting of wrong minor head in the challan while remitting the TDS
  • Omission to include details of a deductee in the challan wise annexure in the TDS statement
  •  Non quoting of PAN of the deductee
  •  Quoting of structurally invalid PAN of the deductee
  •  Quoting of valid but non existent PAN of deductee
  • Quoting of valid but incorrect PAN of deductee
  • Entering incorrect amount in deductee details

Deductee related reasons :

  •  Error in the TDS amount claimed in the return
  •  Claim of inflated TDS credit in the return
  •  Bogus claim of TDS credit in the return
  •  Amount paid / credited shown in the TDS certificate erroneously claimed as TDS credit in the return
  •  Erroneous claim of TDS credit pertaining to two years in the return of income for one year
  •  Quoting of incorrect TAN of the deductor in the return
  •  Quoting of the TAN of the last DDO only in case of salary drawn from different DDOs during the year
  •  Credit for TDS claimed in a different PAN and status
  •  Credit for TDS claimed for an assessment Year other than the assessment year relevant to the year of deduction

Bank related reasons :

  • Entering wrong TAN while uploading challan data
  •  Entering wrong minor head code while uploading challan data

 

Correction statements for correcting the mistakes in TDS statements:

Type of correction statement

Nature of corrections that can be made

C-1

Updation of deductor details – Name, address etc.

C-2

Updation of challan details

C-3

Updation of deductee details including addition of new records and deletion of existing records

C-4

Updation of salary detail records, deletion of existing records and addition of new records

C-5

Updation of PAN of deductees

C-9

Addition of challan records and underlying deductee records

Y

Cancellation of TDS statement filed with incorrect TAN

 

Action to be taken by deductors for various types of errors:

Nature of error

Type of correction statement to be filed or other action to be taken
Omission to include details of a challan

C-9

Entering of wrong CIN in challan details

C-2

Entering of incorrect amount in challan details

C-2

Quoting of wrong TAN in challan Approach TDS A.O for correction in the system
Quoting of wrong minor head code in challan Approach TDS A.O for correction in the system
Omission to include details of a deductee in the challan wise break-up

C-3

Non quoting of PAN of a deductee

C-5

Quoting of invalid PAN or non existent PAN or incorrect PAN of a deductee

C-5

Entering incorrect TDS amount in deductee details

C-3

Entry of wrong TAN by the bank while uploading challan data Approach TDS A.O for correction
Entry of wrong minor head code by the bank while uploading challan data Approach TDS A.O for correction


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IT department enables Pre-Fill option for ITR

      No Comments on IT department enables Pre-Fill option for ITR

The pre-fill option of personal and tax information for ITR 1, ITR 2, ITR 3, ITR 4 and ITR 4S for assessment year 2012-13 is available. Please download the applicable ITR Form from the portal. To know more on how to download, pre-fill and upload.

Download Income Tax Return and Upload XML

To file an Income Tax Return electronically, you should download the Income Tax Return (ITR) Utility applicable, fill and generate an XML. This XML should be uploaded in the application post LOGIN.

You can also pre-fill personal and tax information, a new feature in this application.

Steps to Download ITR:

1. On home page, GO TO Downloads section and select applicable Income Tax Return Form of the desired Assessment Year OR Login to e-Filing application and GO TO Downloads >Income Tax Return Forms and select applicable Income Tax Return Form of the desired Assessment Year.

2. Download the excel utility of the Income Tax Return (ITR).

3. Fill the excel utility and Validate. (Please refer the “Steps to pre-fill in Income Tax Return” as mentioned below)

4. Generate an XML file and save in desired path/destination in your desktop/system.

5. LOGIN to e-Filing application and GO TO > e-File > Upload Return.

6. Select the Income Tax Return Form and the Assessment Year.

7. Browse and Select the XML file

8. Upload Digital Signature Certificate, if available and applicable.

9. Click SUBMIT.

10. On successful upload, Acknowledgement details would be displayed. Click the link to view or generate a printout of Acknowledgement/ITR-V Form.

Steps to pre-fill in Income Tax Return:

1. LOGIN to e-Filing application and GO TO Downloads> Income Tax Return Forms

2. Download the excel utility of the selected Income Tax Return.

3. GO TO Downloads> Download Pre-fill XML and download.

4. Open the excel utility.

5. Click the button PRE-FILL. An option to BROWSE a file is displayed.

6. Click on BROWSE and select the path where the downloaded Pre-Fill XML file is stored.

7. Click the SUBMIT button

8. The Personal and Tax information is pre-filled in the respective fields of the excel utility (ITR). You can edit the Tax information, if needed.

NOTE: The pre-fill option is available only for Assessment Year 2012-13


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Procedure for refund of excess TDS deducted/ paid

      4 Comments on Procedure for refund of excess TDS deducted/ paid

Analysis of CIRCULAR NO. 2/2011 [F.NO. 385/25/2010-IT(B)], DATED 27-4-2011

If a deductor has deposited excess amount of TDS , the procedure for getting refund was given in Board Circular 285 dated 21-1-1980.

Now CBDT has issued new circular in this respect.

  • This Circular 2/2011 is issued in  suppression of  Circular No 285 / 21-10-1980
  • It covers TDS sections 192 to 194LA
  • It does not cover TDS on non-resident payments i.e. section 192, 194E and 195 ( which are  separately covered by circular No. 7/2007)
  • It covers refunds for the period upto 31-03-2010 .
  • Refunds for period thereafter will be covered under provision of section 200A which prescribes processing of TDS Statements

Excess to be refunded :

The excess payment to be refunded would be the difference between:

  • the actual payment made by the deductor to the credit of the Central Government; and
  • the tax deductible at source

Excess payment discovered during financial year

In case such excess payment is discovered by the deductor during the financial year concerned, the present system permits credit of the excess payment in the quarterly statement of TDS of the next quarter during the financial year.

Excess payment discovered after financial year

  • In case, the detection of such excess amount is made beyond the financial year concerned, such claim can be made to the Assessing Officer (TDS) concerned.
  • However no claim of refund can be made after two years from the end of financial year in which tax was deductible at source.

Safeguards to avoid double claims

To avoid double claim of TDS by the deductor as well as by the deductee, the following safeguards must be exercised by the Assessing Officer concerned:

The applicant deductor shall establish before the Assessing Officer that:

(i) it is a case of genuine error and that the error had occurred inadvertently;

(ii) that the TDS certificate for the refund amount requested has not been issued to the deductee(s); and

(iii) that the credit for the excess amount has not been claimed by the deductee(s) in the return of income or the deductee(s) undertakes not to claim such credit.

Prior  approval of the Additional Commissioner  is required for refund in excess of Rs. 1 Lakh

Prior  approval of the  Commissioner  is required for refund inexcess of Rs. 10 Lakhs

After meeting any existing tax liability of the deductor, the balance amount may be refunded to the deductor.

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Govt urges Tax Payers to disclose true income & pay tax

 

Government Once again urges all Tax Payers to Disclose their true income and pay Appropriate Taxes within the Current Financial Year.

Nodal Cell set up to Capture the Response and take Follow-up Action; an Online Monitoring System to Ensure Follow-up Action and Track Return Filing and Tax Payment of the Target Segment.

The Union Finance Minister Shri P. Chidambaram has repeatedly emphasized that there is need for a non – intrusive tax administration to enable the tax payer to file his return and pay appropriate taxes.

In the statement made by the Revenue Secretary to the media on 10th December 2012, he had stated that there is no advantage in suppressing the true income or avoiding paying income tax that is due because, sooner or later, the information available with the Income Tax Department will lead the department to the doors of such persons.

The Directorate of Systems of the Income Tax Department has undertaken a business intelligence project to identify PAN holders who have not filed Income Tax Return and about whom specific information is available in 148 information codes of Annual Information Return (AIR), Central Information Branch (CIB) data and TDS/TCS Returns. Information in the Cash Transaction Reports (CTRs) of FIU-IND has also been included as part of this data matching exercise. This data analysis has identified target segment of 12,19,832 non-filers linked to more than 4.7 crore information records. Rule based algorithms have been used to identify high priority cases for follow-up and monitoring.

In the first batch, letters are being sent to 35,170 PAN holders by the Directorate of Intelligence and Criminal Investigation. The letter contains the summary of the information of financial transaction(s) along with a customized response sheet and seeks to know whether the person had filed his Income Tax return or not. A Nodal cell has been set up to capture the response and take follow-up action. There will be an online monitoring system to ensure follow-up action and track return filing and tax payment of the target segment.

The Government would once again urge all tax payers to disclose their true income and pay appropriate taxes within the current financial year.


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