TDSMAN Blog

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Guidelines to avoid common mistakes while submitting TDS Statements

Following are some useful guidelines to avoid common mistakes, while submitting TDS Statements:

Incorrect reporting of 197 Certificates:

Please refer to the following guidelines for correct reporting of 197 Certificates:

  • The Certificate Number should be of 10 digits with Alpha-numeric structure. Please refer to the following examples:
    • Correct Format 1111AA111A
    • Incorrect Format: 1111AA111A/194C
  • Certificate Number should be valid during the period for which it is quoted.
  • The Certificate Number should be for the same PAN, Section Code and Section Rate for which it has been mentioned in the statement
  • Threshold limit Amount of the Certificate should not be exceeded.
  • Please ensure that the Certificate is not expired. Please refer to the following illustration:
    • Lower deduction Certificate under section 197, issued in April 2013 (e.g. Certificate Number – 1) stands cancelled by Assessing Officer on 10/11/2013.
    • A fresh certificate Under Section 197 (e.g. Certificate Number – 2) is issued with effect from 11/11/2013.
    • Deductor quotes Certificate Number – 2 against the transactions recorded during the period from 01/11/2013 to 10/11/2013 in Q3 TDS statement.
    • Deductor should have quoted Certificate Number – 1 for the transactions conducted till 10/11/2013.

Common errors resulting into Short Payment Defaults:

  • Typographical errors committed by deductor, in reporting the date ’20032014′    in the “Tax Deducted” column.
  • Total of “Amount Paid / Credited” reported in the “Tax Deducted” column of the statement. This results into short payment and Deductors need to ensure that the TDS/TCS Deducted/Collected amount should be equal to TDS/TCS Deposited Amount.

The above mistakes are illustrated below:

Amount Paid/ Credited

TDS Deducted

TDS Deposited

Remarks

1,55,000.00 1,55,000.00 15,500.00 Wrong TDS Deducted Amount
2,20,420.00 20032014.00 22042.00 Date mentioned in the TDS Deducted Column

 Actions to be taken:

  • CIN Particulars (BSR Code, Date of Deposit and Challan Serial Number) mentioned in the TDS statement should exactly match with the CIN Particulars as available on ‘Challan Status’ at www.tdscpc.gov. in or ‘Challan Status Enquiry’ at www.tin-nsdl.com
  • For BIN (Book Identification Number), the particulars (24G receipt number, Date of transfer voucher and DDO Serial Number) mentioned in the TDS statement by the Govt. Deductors should exactly match with the BIN Particulars as available on ‘Challan Status’ at www.tdscpc.gov. in or ‘BIN View’ at www.tin-nsdl.com
  • Amount of Tax deposited pertaining to different BIN’s/ CIN’s should not be clubbed together while reporting in the TDS statements.
  • Few other common mistakes in reporting dates are as follows:

Actual Date of Deposit 
(As per Challan)

Date of Deposit mentioned in TDS Statement

Observations

07/01/2014 (7th Jan, 2014) 07/01/2013 (7th Jan, 2013) Wrong Year (2013 instead of 2014)
07/01/2014 (7th Jan, 2014) 01/07/2014 (1st July, 2014) Wrong Date Format (MM/DD/YYYY)

 

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Top queries related to registration in TRACES

When I provide my TAN and Token Number, I get the message ‘Invalid details’. Why?

Token Number (Provisional Receipt Number) provided must be of any accepted Regular statement filed by you on or after April 1, 2010 or of any accepted Correction statement filed by you from April 1, 2010 to October 15, 2012.

What are the details that I need to enter in the registration form?

For Deductors

  • Step–1
    • TAN of Deductor
  • Step–2
    • Token Number of the regular statement corresponding to the Financial Year, Quarter and Form Type displayed on screen
    • Challan details of one particular CIN which has been mapped to at least three deductee rows. If there is no such challan, please enter details of challan having maximum number of deductee rows
  • Step–3
    • PAN of Deductor
    • PAN of Authorised Person (person responsible for deduction of tax at source)
    • Date of Birth of Responsible Person as in PAN database
    • Designation of Responsible Person
    • Communication Address
    • Mobile Number
    • Email Id

For Tax Payers

  • Step–1
    • PAN of Tax Payer
    • Date of Birth as on PAN Card
    • Name as in PAN database
    • Option 1 – Details from Form 26AS or salary slip (in case of salaried persons). Provide TAN of deductor who has deducted TDS / TCS, month & year of deduction and amount of tax deducted
    • Option 2 – Details of any tax paid by you. Provide Assessment Year for which payment was made by you, Challan Serial Number of the challan using which payment was made and amount as per the challan
  • Step–2
    • Communication Address
    • Mobile Number
    • Email Id

How can I ensure that I have entered incorrect communication details (Email Id or Mobile Number) during registration? Can I edit this information before submitting my registration form?

During registration, please ensure to verify your details in the Confirmation Screen (Step–5). In case of any incorrect details, click on ‘Edit’ to change your details.

Source: TRACES

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Steps to be taken in case of TDS mismatch

Even if the credit for TDS as claimed in the return matches with the balance as appearing in the Form 26AS, Assessing Officer may still raise a demand for payment of differential amount due to TDS mismatch. The reason for such differences could be as under:

(1) TAN of deductor was wrongly mentioned

(2) Name of deductor was not spelt correctly

(3) Tax deducted by one deductor wrongly included in the amount of tax deducted by another deductor

In case of such TDS mismatch, an assessee can file a rectification request.

Steps to file the rectification request:

(a) Login to your account in https://incometaxindiaefiling.gov.in

(b) Go to My Account > Rectification request

(c) You need the following to fill in the required details:

(i) PAN

(ii) Assessment Year

(iii) Latest Communication Reference Number (it starts with CPC/Assessment Year/)

(iv) Latest CPC Order date

(d) Click on Validate to go to next step

(e) On the next screen, choose ‘Taxpayer is correcting data for Tax Credit Mismatch Only’ from the drop-down box of ‘Rectification Request Type’

(f) Check from the following relevant boxes for which taxpayer is seeking rectification:

(i) TDS on salary details

(ii) TDS on other than salary details

(g) Fill in all the relevant details including details of tax deducted and reported in the return of income filed earlier

(h) Click on the button of ‘Submit’ to submit the rectification request.

The TDS mismatch may also be due to error in TDS return filed by deductor. In such a situation, you should intimate the deductor about such error and require him to rectify the TDS return. 

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Frequently asked question (FAQ) on TDS

What is TDS?

TDS means ‘Tax Deducted at Source’. TDS is one of the modes of collection of taxes, by which a certain percentage of amount is deducted by a person at the time of making / crediting certain specific nature of payment to the other person and deducted amount is remitted to the Government Account.

Is TDS relevant for me as a businessman?

Yes. Payments may be made to you after TDS. You can adjust this against your final tax liability. You are also required to effect TDS while making business payments. Failure to do so will result in the entire of expenditure being disallowed as your business expenditure and taxed as income.

I have made some deposits with a bank on which annual interest is around 15000. My income is below taxable limit. The banker wants to deduct tax. What do I do?

You can file a self-declaration to the banker in Form 15H stating that your income is below taxable limit. The form is available with your banker, the local Income Tax office and can be downloaded from the website www.incometaxindia.gov.in This form should be filed before the interest begins to accrue in the fixed deposit account, since the declaration has no retrospective effect.

I have let out a property for 20,000 per month. The tenant is deducting tax that is more than my tax liability. What can I do under this circumstance?

If you compute your tax liability and find it to be lower than the tax being deducted, you may approach your Assessing Officer by filing Form 13. He will issue a certificate directing the tenant to make TDS at a lesser rate. This form is available with the local Income Tax office or can be downloaded from the website www.incometaxindia.gov.in

I have deducted tax from payments disbursed but used the same for some urgent financial needs. What are the consequences?

It is an offence to misuse Tax Deducted at Source. It should have been remitted to government account within the specified time limit. Failure to deposit TDS attracts levy, interest, penalty and also rigorous imprisonment up to seven years.

If the employer does not deduct tax and employee also does not pay his due tax, who will be held responsible for tax payment?

The ultimate responsibility to pay tax rests on the person who has earned income. If the employee deposits such tax then the employer will be liable for interest and penalty for failure to deduct tax.

I am buying a property from a person residing in USA. Should I deduct tax while making payment?

Yes, u/s 195. In case you have any doubt regarding the amount on which TDS is to be made, you may file an application with the officer handling non-resident taxation who will pass an order determining the TDS to be made. Alternatively, if the recipient feels that the TDS is more he may file an application with his Assessing Officer for non-deduction.

Can I use PAN to pay the TDS deducted into government account?

No. You are required to have a separate Tax Deduction Account Number (TAN) by making an application in Form 49B with the TIN facilitation center of NSDL.

Is Income Tax Act applicable only to residents?

No, Income Tax Act applies to all persons who earn income in India, whether they are resident or non-resident.

Who is a resident?

If an individual stays in India for 182 days or more in a year, he / she is treated as resident in that year regardless of his citizenship. If the stay is less than 182 days, he /she is a non-resident.

How can I know whether a company is resident or non-resident?

A company is considered as resident if it is incorporated under the Indian Companies Act. A foreign company can also become a ‘resident’ if the control and management of its affairs is done entirely in India during the previous year.

How is resident / non-resident status relevant for levy of income tax?

In case of resident individuals and companies, their global income is taxable in India. However, non-residents have to pay tax only on the income earned in India or from a source / activity in India.

Source: TRACES

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