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CPC (TDS) mandates closure of Short Payment Defaults in the quarterly TDS statements

The Centralized Processing Cell (TDS), in its endeavour to enforce TDS Compliance, is shortly mandating closure of “Short Payment defaults” in the quarterly TDS statements due to Unmatched Challans, before the Conso files can be downloaded from TRACES for the relevant statements.

Following are key information to be noted in this regard:

  • CPC(TDS) mandates to close the above default by tagging unconsumed challans, if available in CPC(TDS) system, through online correction (without digital signature).
  • In case there is no available challan for consumption, the deductor is required to first deposit the due tax in the bank and then the same challan will be available for tagging in CPC(TDS) system after around 3-4 days of deposit.
  • CPC(TDS) mandates to close the above default by Matching or Payment of challans.
  • The user will not be able to download Conso file for the relevant TDS statement until the above default is closed.
  • The Online Correction facility of TRACES needs to be used for closure of the Short Payment default.
  • User will subsequently be able to download the Conso file for relevant period only after the default is closed.

Why the Short Payment needs to be paid:

  1. CPC (TDS) intends to enforce compliance towards payment of taxes to the Government.
  2. In accordance with provisions of section 201(1) of the Act, where any person, including the principal officer of a company, who is required to deduct any sum in accordance with the provisions of the Act; does not pay, or after so deducting fails to pay, the whole or any part of the tax, as required by or under this Act, then, such person, shall be deemed to be an assessee in default in respect of such tax.
  3. As per the provisions of section 220 of the Act,
    1. Any amount, specified as payable in a notice of demand shall be paid within thirty days of the service of the notice.
    2. If the amount specified in any notice of demand is not paid within the period limited under sub-section (1), the assessee shall be liable to pay simple interest at one per cent for every month or part of a month comprised in the period commencing from the day immediately following the end of the period mentioned in sub-section (1) and ending with the day on which the amount is paid.
  4. If any person fails to deduct or pay the whole or any part of the tax, then, such person shall be liable to pay, by way of penalty, a sum equal to the amount of tax which such person failed to deduct or pay under Section 271C of the Act.
  5. Failure to pay tax to the credit of Central Government is punishable with fine as per the provisions of section 276B/ 276BB.
  6. Section 278A of the Act prescribes for punishment for second and subsequent offences, if any person has been convicted of an offence under section 276B.

What Actions to be taken:

  1. During submission of request for Conso File, a message will be displayed, if there are Short Payment defaults in the TDS statement and instructions will be provided to submit Online Correction.
  2. Details of defaults will be provided during Online Correction process.
  3. In case of insufficient challans, please use Challan ITNS 281 to pay the demand or use any other Challan, which has adequate balance available.
  4. Submit an Online Correction using the functionality on TRACES to tag the challans with deductee rows. Login to TRACES and navigate to “Defaults” tab to locate “Request for Correction” from the drop-down list. 

Online Challan Corrections:

  1. A list of all Matched and Unmatched challans can be viewed by clicking the appropriate tab.
  2. Unmatched challans can be corrected and tagged to Deductee rows in the statement.
  3. The corrections in TDS statements can be raised even without Digital Signature.
  4. Correct KYC information needs to be submitted for the purpose of validation.
  5. All previous corrections pertaining to the statement should have been processed and the processing status can be verified from the Dashboard.

You are requested to take appropriate actions to avoid any inconvenience in absence of Conso files for carrying out any other corrections to your TDS statements.

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Invalid / Not Available PANs reported consistently while submitting TDS Statements – CPC(TDS)

CPC(TDS) has issued a reminder communication to all deductors regarding invalid/non available PANs. The issued communication has been given below:

Dear Deductor,

CPC(TDS) has observed from its records that you have consistently reported Invalid / Not Available PANs in the Quarterly TDS Statements submitted during the period from Q4, 2012-13 to Q3,2013-14. Please note that you are amongst deductors, who have reported highest number of above mentioned incorrect PAN records in their TDS Statements.

Please refer to the following details with respect to Invalid PANs reported in your TDS Statements:

Deductor’s 
TAN

Count of PAN Errors 
Q4,2012-13

Count of PAN Errors 
Q1,2013-14

Count of PAN Errors 
Q2,2013-14

Count of PAN Errors 
Q3,2013-14

         

Implications of reporting Invalid/ Not Available PANs in TDS Statements :

  • The Deductor will not be able to provide TDS certificate to the deductee, if valid PANs are not reported.
  • The correct deductee will not be able to avail the credit of TDS deducted for taxes deducted.
  • Under section 277 of the Income Tax Act, 1961, if a person makes a statement in any verification under this Act or under any rule made there under, or delivers an account or statement which is false, and which he either knows or believes to be false, or does not believe to be true, is punishable.

Actions to be taken :

  • Please note that Correct reporting at the first instance will help in avoiding submitting Correction Statements.
  • In case of any errors observed in reporting, the Corrections must be reported at the earliest to avoid unwarranted delays.
  • The Deductor must ensure that the PANs for deductees reported in TDS Statements are valid and correct. TAN-PAN Master can be downloaded from TRACES and should be used to file statements to avoid quoting of incorrect PANs.Please Login to TRACES and navigate to “Dashboard”to locate “PAN Verification” in the Quick Links menu. The functionality to download Consolidated TAN – PAN File has also been provided that includes all the PANs attached with the respective TANs.
  • You can use the facility of Online Corrections at TRACES with Digital Signature. Please refer to e-tutorials for assistance.

It is advised to avoid submitting TDS Statements with Invalid PANs and take corrective actions at the earliest.

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

CPC (TDS) TEAM

 

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CPC(TDS) – Solutions to common enquiries

TRACES has several easy-to-use, online e-Tutorials and FAQs that can be effectively used to get ready answers to your questions.

Following are some of the most common reasons deductors enquire or call TRACES:

What is the status of processing of statements?

  • CPC(TDS) is glad to inform that the peak load of statement processing has already been taken care of.
  • The status of processing of statements can be checked in your Dashboard after you login to TRACES.
  • Please wait for 4 days after the statements have been filed before reaching CPC(TDS) with an enquiry on the above.

Having issues with downloading of TDS Certificates/ Consolidated Files?

  • If you are unable to submit request for downloading of TDS Certificates or Conso Files, please first check the status of processing of relevant statements. You will be able to submit requests only after the statement has been processed.
  • Please check the correctness of KYC information for submitting download requests to ensure successful submission of the request.
  • TRACES is currently experiencing huge volume of requests for download of TDS Certificates. However, they are being made available within a day of submission of request. Please wait for 24 hours before reaching out to CPC(TDS) with an enquiry.
  • Please refer to our e-Tutorials for detailed assistance on downloading TDS Certificates.
  • To convert form 16/Form 16A in pdf format, PDF generation utility is required 
  • For downloading Consolidated files, the e-Tutorial can be referred.

Have a problem in password required for various process at TDSCPC?

  • Click here to Check password for consolidated file, form 26AS, Form 16, Form 16A, Justification report

Have a query related to Intimations sent by CPC(TDS)?

  • Please download the Justification Report to view the details of Defaults in the TDS Statements.
  • Please refer to the e-Tutorial for detailed assistance.

Have a query related to Registration/Login?

  • Please submit correct KYC information for Registration/ Login. Please refer to our e-Tutorial for assistance.
  • You are requested to wait for an hour, if the Account is locked due to incorrect password. Please retrieve a fresh password and the detailed procedure is specified in the e-Tutorial.
  • If you need assistance for User ID, the e-Tutorial can be referred for detailed steps.
  • Please use both the Activation Codes sent on the Registered Mobile Number and e-mail address for the purpose of successful activity.
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Flag raised for 15G/H despite Income exceeding the amount of exemption

CPC(TDS)  has observed from its records that Flag “B” (for 15G/H Forms) has been wrongly raised in the quarterly TDS Statements. CPC(TDS) has issued a letter to all deductors in this regard.

The letter produced is given as under:

Dear Deductor ( TAN XXXXXXXXXX ),

CPC(TDS) feels glad to provide you with the new feature of downloading Form 27D, the Tax Collection Certificate for Deductees forming part of TCS Statements, filed in the form of 27EQ.

Centralized Processing Cell (TDS) has observed from its records that Flag “B” (for 15G/H Forms) has been wrongly raised in the quarterly TDS Statements as per the provisions of section 197A(1B) of the Income Tax Act, 1961. Following are the provisions of section 197A(1B) for your ready reference:

“The provisions of this section shall not apply where the amount of any income of the nature referred to in sub-section (1) or sub-section (1A), as the case may be, or the aggregate of the amounts of such incomes credited or paid or likely to be credited or paid during the previous year in which such income is to be included exceeds the maximum amount which is not chargeable to income-tax“.

What is Form 15G/ H and its relevance:

  • Under section 197A of the Income Tax Act 1961, Form 15G / H is a self-declaration, which is provided by a person resident in India (not being a Company or Firm) to their deductor that the tax on his estimated total income of the previous year, in which such income is to be included in computing his total income, will be NIL.
  • The Declaration is made in the following Forms:
    • Form 15H – For Senior Citizens
    • Form 15G – For other than Senior Citizens

Consequences, if deductor wrongly raises Flag “B” for Forms 15G/H:

If the deductor raises Flag “B” for non-deduction of tax, despite the total payments made by him exceeding the taxable amount, this results into incorrect reporting in the TDS Statements.

Your attention is invited to provisions of section 201 of the Act, which reads as follows:

Where any person who is required to deduct any sum, does not deduct or does not Pay or after deduction, fails to pay,

the whole or any part of the tax, then such person shall be deemed to be an assessee in default in respect of such tax.

Under section 277 of the Act, if a person makes a statement in any verification under this Act or under any rule made thereunder, or delivers an account or statement which is false, and which he either knows or believes to be false, or does not believe to be true is punishable.

This may be noted that obligation to report each transaction correctly in the TDS statements, falls on the deductor and non-compliance amounts to incorrect verification of correctness of TDS statement.

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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