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Smart & Easy TDS Software for Preparing TDS Returns

TDSMAN Blog - Smart & Easy TDS Software for Preparing TDS Returns

Avail the Benefit of CPC(TDS) Analytics for Correction of PANs in your TDS Statements

Date of Communication: 19/11/2016

Dear Deductor, TAN (XXXXXXXXXX)

Centralized Processing Cell (TDS) has observed from its records that you have reported “Structurally Correct, however Invalid PANs” in your TDS Statement filed for Quarter 1 and 2 of Financial Year 2016-17. To correct such errors, CPC (TDS) Analytics provides facility of correct PAN suggestions for the Deductees, while submitting Online PAN Corrections based on your statement filing history.

Action to be taken:

  • “Online Correction” facility of TRACES can be used with Digital Signatures for correction of PANs. To avail the facility, you are requested to “Login to TRACES” and navigate to “Defaults” tab to locate “Request for Correction” from the drop-down menu. For assistance, please refer to the e-tutorial available on TRACES.
  • While submitting PAN Corrections, CPC (TDS) Analytics identifies the above referred errors for you and provides suggestions for Valid PANs. This will reflect as follows while submitting corrections:

Implications, if Errors are not corrected:

Deductor would not have been able to generate TDS Certificates for deductees with such incorrect PANs. In case, you have issued TDS Certificates outside TRACES, they will not be valid. In view of CBDT circulars 04/2013 dated 17.04.2013, No. 03/2011 dated 13.05.2011 and No. 01/2012 dated 09.04.2012, TDS Certificates downloaded only from TRACES Portal will be valid. Certificates issued in any other form or manner will not comply to the requirements referred in the Income-tax Act 1961 read with relevant Rules and Circulars issued in this behalf from time to time.

  • Correct TDS Credits in 26AS statements to such taxpayers will not be available and they will not be able to avail the same, while filing their Income Tax Returns.
  • As per section 206AA of the Income Tax Act, tax is to be deducted at a higher rate, in case of “Not Available/ Invalid PANs”. Therefore, default of Short Deduction, including Interest is charged on the deductor, if the tax has not been deducted at higher rate, as per the provisions of section 206AA.

Therefore, to avoid generation of defaults against you and to avoid any inconvenience to your deductees, please make full use of the above referred facility.

For any further assistance, you can also write to 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

Source: TRACES

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Tips to avoid defaults in TDS Returns

One can avoid defaults in the TDS returns, by way of adherence to the following basic principles:   

• Timely Payment of total taxes deducted/ collected

• Correct Reporting with regard to PANs, Tax Rate and Challans

• Complete Reporting for all Deductees

• Timely filing of TDS return   

Following are some important facts to be adhered to, while submitting TDS return, to avoid each type of Default:   

• Late Payment Defaults:

• Short Payment Defaults:

  • All the taxes deducted must be deposited with challan 281 quoting correct TAN, Assessment Year, Minor Head etc.
  • Challan details/BIN details quoted in the statement should be correct. Challans can be validated by using Challan Status Inquiry(CSI) file. Correct details can also be verified at TRACES in “Challan Status” menu under “Statement Status” after login.
  • There should not be any difference in the amounts quoted in “Deducted” and “Deposited” columns of the deductee rows.
  • Challans quoted in the statement must have balance available for consumption against specified deductee rows. Available balance can be verified at TRACES in “View Consumption Details” under “Statements/ Payments” menu after login.
  • Government Deductors need to report Book entry flag as “Y” in challan details.   

• Short Deduction Defaults:

  • Taxes must be deducted at correct rates specified in the Act. The Rate table can be accessed at TRACES for correct tax rates.
  • Correct flags (A, B, C, T and Y) must be raised for no deduction/ lower deduction/ higher deduction, as appropriate.
  • The PAN for deductees must be valid and correct. TAN-PAN Master can be downloaded from TRACES and be used to file statement to avoid quoting of incorrect and invalid PANs.
  • Correct and valid 197 Certificates must be specified. E-tutorial can be referred to for the purpose of validation.
  • For 24Q statements, correct flags should be raised for Woman/ Man/ Senior Citizen/ Super Senior Citizen deductees, as may be appropriate.
  • DTAA flag “B” must be raised under section 195 of the Act, at the time of filing 27Q  statements.

• Late Deduction Defaults:

  • Taxes must be deducted at the time of Payment or Credit, whichever is earlier.   

• Late Filing Defaults:   

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Healthy Practices for Error-Free TDS Returns

Healthy practices for error – free TDS returns has been given below:
  1. Deduction/ Collection of Tax at Correct Rates.
  2. Timely Deposit of Tax Deducted at Source.
  3. Accurate Reporting of data related to tax deductions/ collections made.
  4. Submission of TDS Statements within the due dates.
  5. Verification and Issuance of TDS Certificates within time.
  6. CPC (TDS) is now sending “Intermediate Default Communication” for PAN Errors and Short Payments, which can be corrected during the interim period of a week of filing TDS Statements, before CPC (TDS) proceeds with computing Defaults for the relevant statement.
  7. User-friendly Online Correction facility can be used for Correction of Deductees, Tagging Unmatched Challans and Payment of Fees/ Interest. (Please navigate to Defaults tab to locate Request for Correction from the drop-down menu. For any assistance, please refer to the e-tutorial available on TRACES).
  8. Aggregated TDS Compliance Report assists the PAN of the Deductor to administer TDS Defaults for associated TANs and to take appropriate action.
  9. The Deductor’s Dashboard provides you all necessary information to assist you in “Compliance Self-Assessment” and to take appropriate action.
  10. Non-filing Self-declaration can be made by navigating to Statements / Payments menu and submit details under Declaration for Non-Filing of Statements.
  11. PAN Verification and Consolidated TAN – PAN File facility on TRACES can be used for verifying the deductees.
  12. The Conso Files and Justification Reports downloaded from TRACES help you to identify errors in submission of revised Quarterly TDS Statements.
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Do’s & Don’t’s for TDS Returns

Given below are some dos and don’t for filing of TDS returns:

Dos

  1. Ensure that TDS return is filed with same TAN against which TDS payment has been made.
  2. Ensure that correct challan particulars including CIN and amount is mentioned.
  3. Correct PAN of the deductee is mentioned.
  4. Correct section is quoted against each deductee record.
  5. Tax is deducted at correct rate for each deductee record.
  6. File correction statement as soon as discrepancy is noticed.
  7. Issue TDS certificate downloaded from TRACES website.

Dont’s

  1. Don’t file late returns as it affects deductee tax credit.
  2. Don’t quote incorrect TAN vis-à-vis TDS payments.
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