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Online TDS Statement Correction without Digital Signature at TRACES

CPC (TDS) has provided new enhanced features, to further add to the convenience of online facility of filing corrections to the TDS Statements. With this feature, you will be able to submit Online Corrections at TRACES without even having a Digital Signature. Currently over 20,000 deductors are already using the online facility for corrections.

To avail the facility, it is requested to Login to TRACES and navigate to “Defaults” tab to locate “Request for Correction” from the drop-down list. Click to “Proceed” in absence of Digital Signature.

Pre-requisites for filing online Corrections:

  • Digital Signature is not mandatory to be registered on TRACES for raising online corrections.
  • Only Challan Correction is permissible in absence of Digital Signature. Digital Signature enables you to carry out PAN Corrections as well.
  • Correct KYC information needs to be submitted for the purpose of validation.
  • Online request can be submitted, only if there is a regular statement already filed and processed.
  • All previous corrections pertaining to the statement should have been processed and the processing status can be verified from the Dashboard.

Functionalities available without Digital Signature:

Challan/BIN Correction

  • A list of all Matched and Unmatched challans can be viewed by clicking the appropriate tab.
  • Matched challans can be corrected for “Amount Claimed as Interest and Others”. Please note that Matched challans cannot be tagged.
  • Unmatched challans can be corrected and tagged to Deductee rows in the statement.
  • In addition, NO CHALLAN, which has been used for other purposes outside the system, should be tagged.
  • The corrections to above challans can be reset by clicking the Reset tab, if this requires to be further corrected.

Additional Functionalities available with Digital Signature:

 PAN Correction

  • Invalid to Valid PAN: The correct name of the Valid PAN will be displayed in “Name as per changed PAN”.
  • Valid to Valid PAN: If the new PAN entered is Invalid, a message is displayed in the “Action Status”. Please note that there is only one opportunity for a Valid to Valid PAN correction.
  • All the corrected rows can be viewed by clicking on “Show Edited Rows” on the screen.

Action Summary:

  • After carrying out all the corrections, Action Summary can be referred for all changes carried out.
  • Please click “Confirm” for all intended changes and the statement is ready for submission.

Actions to complete Submission:

  • Please navigate to “Defaults” tab to locate “Corrections Ready for Submission”.
  • Click on “Submit for Processing”, which will prompt to digitally sign the submission.
  • Once the correction is submitted successfully, a Token Number for the same will be available.

FAQ on Section 194H – TDS from Commission and Brokerage

Q1. Who is responsible to deduct tax u/s 194H?

Ans. Any person, (other than individual or a Hindu undivided family) who is responsible for paying, to a resident, any income by way of commission (not being insurance commission referred to in section 194D) or brokerage, shall, deduct income-tax thereon.

However, individuals and HUF who were covered under section 44AB(a) and (b) in the preceding previous year i.e. whose gross turnover/receipts of the business/profession in the immediately preceding financial year exceeded business/profession in the immediately preceding financial year exceed Rs.  1,00,00,000 / 25,00,000, as the case may be, are also required to deduct tax at source.

Q2. What is the point of deduction of TDS u/s 194H?

Ans. It will be deducted at the time of credit of such income to the account of the payee or to any account, whether called suspense account or by any other name or at the time of payment, of such income in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier.

Q3. At what rate TDS has to be deducted u/s 194H?

Ans. The rate of TDS shall be 10%.

Notes: No surcharge, education cess or SHEC shall be added to the above rates. Hence, tax will be deducted at source at the basic rate.

The rate of TDS will be 20% in all cases, if PAN is not quoted by the deductee on or after 1-4-2010.

Q4. Under what circumstances TDS u/s 194H is not deductible?

Ans. (1) No deduction shall be made under this section in a case where the amount of such income or, as the case may be, the aggregate of the amounts of such income credited or paid or likely to be credited or paid during the financial year to the account of, or to the payee, does not exceed ` 5,000 (` 2,500 upto 30.06.2010)

(2) No tax shall be deducted on any commission or brokerage payable by Bharat Sanchar Nigam Ltd. or Mahanagar Telephone Nigam Ltd. to their public call office franchises (Third proviso to section 194H inserted w.e.f. 1-6-2007)

Q5. What is the meaning of words “Commission or brokerage” for the purpose of section 194H?

Ans. Commission or brokerage includes any payment received or receivable, directly or indirectly, by a person acting on behalf of another person:

(a)    for services rendered (not being professional services), or

(b)    for any services in the course of buying or selling of goods, or

(c) in relation to any transaction relating to any asset, valuable article or thing, not being securities.

Q6. Whether Provisions of section 194H applicable on discounts offered  by laboratories rendering testing facility to collection centers/  franchisees?

Ans. Where assessee laboratory was rendering services of testing samples to collection centres/franchisees, TDS under section 194H not required in respect of discount offered by assessee to said collection centres/ franchisees. 

Q7. Whether Provisions of section 194H applicable to trade incentive to  dealers?

Ans. Where assessee, a manufacturer of bicycles, was giving trade incentive to dealers, Tribunal was justified in holding that if dealers were selling goods at price for which they were purchasing from company, such trade incentive would amount to commission for purpose of section 1 94H. 

Q8. Whether Provisions of section 1 94H applicable on Discount granted  to licensed stamp vendors on sale of stamp paper?

Ans. Discount granted to licensed stamp vendors on sale of stamp paper, by treasury cannot be termed as `commission or brokerage’ to attract TDS under section 194H. 

Q9. Whether provisions of S. 194H shall apply to free issue of goods under trade scheme?

Ans. Free issue of goods under trade scheme and free gift on sponsorship and promotions and early payment discount given to distributors do not constitute commission as the distributor works on principal to principal basis and not on principal agent relation.

Q10. Whether TDS u/s 194H deductible on turnover commission payable by RBI to Agency Banks?

Ans. Tax deduction at source under section 194H should not be applicable in respect of Turnover Commission payable by the Reserve Bank of India to the Agency Banks (Banks authorized for conducting Government business) for performing the general banking business of the Central and State Governments on behalf of RBI. Circular: No. 6/2003, dated 3-9-2003.


Points to remember while filing TDS statements for 4th Quarter of FY: 2013-14

One should take care of the following information before submitting TDS statements for 4th Quarter of Financial Year 2013-14

Payment of Taxes deducted/ collected:

  • In accordance with Central Government Account (Receipts and Payments) Rules, 1983, Government dues are deemed to have been paid on the date on which the cheque or draft tendered to the bank, was cleared and entered in the receipt scroll.
  • Rule 125 of Income Tax Rules, 1962 provisions for Electronic Payment of Tax by way of internet banking facility, for a Company and a Person to whom provisions of section 44AB of the Act are applicable.

Timely Filing:

  • The due date to file TDS statements for Q4, FY 2013-14 is 15th May, 2014.
  • Please submit the statement within due date to avoid Late filing fee, which, being statutory in nature, cannot be waived

Correct Reporting:

  • Please use your correct contact details, including Contact Number and email IDs in TDS Statements.
  • It is very important to report correct and valid particulars in respect to deductor and deductees. Please report the TAN of the deductor, Category (Government / Non-Government) of the deductor, PAN of the deductees and other particulars of deduction of tax correctly in the quarterly TDS statement.
  • Please make use of TAN-PAN Master from TRACES to Validate PAN and name of deductees before quoting it in TDS statement. Please note that there are restrictions for correction of PAN.
  • Quote correct and valid lower rate TDS certificate in TDS statement wherever the TDS has been deducted at Lower/Nil rate on the basis of certificate issued by the Assessing Officer. Please raise Flag “A”/ “B”, as appropriate, and quote valid and correct Certificate Numbers.
  • TDS statement must be filed by quoting challan(s) using correct Challan Identification Number (CIN), validated by CSI (Challan Status Inquiry) File and correct Book Identification Number (BIN), as appropriate.
  • Please maintain your correct Contact details in your Registration profile at TRACES.

Complete Reporting:

  • Please ensure completeness of your TDS statement by including all your deductees. Please note that the obligation to report each transaction correctly in the relevant quarter is on the deductor and non-compliance amounts to incorrect verification of completeness of TDS statement.
  • Completeness of statement will ensure that a C5, C3 or C9 correction can be avoided. It may be noted that CPC (TDS) does not encourage C9 corrections by addition of a new challan and underlying deductees.
  • Please also complete Annexure II (in case of 24Q) for all deductees employed for any period of time during the current financial year, including Annexure I for TDS details.

Downloading TDS Certificates from TRACES:

  • On the basis of information submitted by the deductor, CPC(TDS) will issue TDS Certificates that can be correct depending on correct and complete reporting by deductors.
  • Your attention is invited to CBDT circulars 04/2013 dated 17.04.2013, No. 03/2011 dated 13.05.2011 and No. 01/2012 dated 09.04.2012 on the Issuance of certificate for Tax Deducted at Source in Form 16/16A as per IT Rules 1962. It is now mandatory for all deductors to issue TDS certificates after generating and downloading the same from TRACES.
  • Please note that under the provisions of section 203 of the Income Tax Act, 1961 read with rule 31A, Certificate of tax deducted at source is to be furnished within fifteen (15) days from the due date for furnishing the statement of tax deducted at source.



Correction of TDS challan without digital signature

Deductors can correct two type of errors online after registration of digital signature.

1. Online correction of challan.

2. Online correction of PAN.

Now TDSCPC website have given facility to correct challan without registering digital signature. First deductor have to register a request for correction of particular return and then they have to check its status after one day .

 Status of request can be:

• Requested – When user submits request for correction.

• Initiated – Request is being processed by TDSCPC.

• Available – Request for correction is accepted and statement is made available for correction. User can start correction on the statement. Clicking on the hyperlink will take user to validation screen. Once user clicks on request with ‘Available’ status, status of request / statement will change to ‘In Progress’.

• Failed – Request cannot be made available due to technical error. User can re-submit request for same details.

• In Progress – User is working on a statement. Clicking on the hyperlink will take user to validation screen.

• Submitted to Admin User – Sub-user / Admin User has submitted correction statement to Admin User.

• Submitted to ITD – Admin User has submitted correction statement to ITD for processing.

• Processed – Statement has been processed by TDS CPC (either for Form 26AS or for defaults).

• Rejected – Statement has been rejected by TDS CPC after processing. Rejection reasons will be displayed in ‘Remarks’ column.

Click here to view the etutorial on Online Correction (without digital signature)



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