Smart & Easy TDS Software for Preparing TDS Returns

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Budget 2017 – Changes in TCS Provisions

1.Restriction on cash transactions

It is also proposed to consequentially amend the provisions of section 206C to omit the provision relating to tax collection at source at the rate of one per cent. of sale consideration on cash sale of jewellery exceeding five lakh rupees.

This amendment will take effect from 1st April, 2017.

2.Exemption from tax collection at source under sub-section (1F) of section 206C in case of certain specified buyers.

The existing provision of sub-section (1F) of section 206C of the Act, inter-alia provides that the seller who receives consideration for sale of a motor vehicle exceeding ten lakh rupees, shall collect one per cent of the sale consideration as tax from the buyer.

In order to reduce compliance burden in certain cases, it is proposed to amend section 206C, to exempt the following class of buyers such as the Central Government, a State Government, an embassy, a High Commission, legation, commission, consulate and the trade representation of a foreign State; local authority as defined in explanation to clause (20) of Section 10; a public sector company which is engaged in the business of carrying passengers, from the applicability of the provision of subsection (1F) of section 206C of the Act.

This amendment will take effect from 1st April, 2017.

3.Strengthening of PAN quoting mechanism in the TCS regime

Statuary provisions for deduction of tax at source (TDS) at higher rate of 20% or the applicable rate whichever is higher) in case of non-quoting of Permanent Account Number (PAN) is provided under section 206AA of the Act and it exist since April, 2010.

PAN acts as a common thread for linking the information in the departmental data base. It may also be noted that the process of allotment of PAN is made simple and robust. PAN application can be made online and PAN gets allotted in less than a week.

In order to strengthen the PAN mechanism, it is proposed to insert new section 206CC to provide the following:

i. any person paying any sum or amount, on which tax is collectable at source under Chapter XVII BB (hereafter referred to as collectee) shall furnish his Permanent Account Number to the person responsible for collecting such tax (hereafter referred to as collector), failing which tax shall be collected at the twice the rate mentioned in the relevant section under Chapter XVII BB or at the rate of five per cent. whichever is higher.

ii. that the declaration filed under sub section (1A) of section 206C shall not be valid unless the person filing the declaration furnishes his Permanent Account Number in such declaration.

iii. that in case any declaration becomes invalid under sub-section (2), the collector shall collect the tax at source in accordance with the provisions of sub-section (1).

iv. no certificate under sub section (9) of section 206C shall be granted unless it contains the Permanent Account Number of the applicant.

v. the collector knows about the correct PAN of the collectee it is also proposed to provide for mandatory quoting of PAN of the collectee by both the collector and the collectee in all correspondence, bills and vouchers exchanged between them.

vi. that the collectee shall furnish his Permanent Account Number to the collector who shall indicate the same in all its correspondence, bills, vouchers and other documents which are sent to collectee.

vii. where the Permanent Account Number provided by the collectee is invalid or it does not belong to the collectee, then it shall be deemed that Permanent Account Number has not been furnished to the collector.

viii. to exempt the non-resident who does not have permanent establishment in India from the provisions of this proposed section 206CC of the Act.

This amendment will take effect from 1st April, 2017.


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:   


Useful guidelines to avoid common mistakes while submitting TDS Statements

Following are some useful guidelines to avoid common mistakes, while submitting TDS Statements and you are requested to go through the following in detail.

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


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 in or ‘Challan Status Enquiry’ at
  • 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 in or ‘BIN View’ at
  • 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


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

Intimation about the Quarterly TDS/TCS due dates

NSDL has sent an intimation to all the deductor/collector regarding due dates and filing of quarterly TDS  return and TCS return

The intimation sent by NSDL has been given below:

Dear Deductor/Collector,

It’s time to file the quarterly TDS/TCS statement. The quick steps are as follows:

Due Date:

Periodicity Due date for TDS statements (all Deductors) Due date for TCS statements
Quarter II (July to September) 31st October of the Financial Year 15th October of the Financial Year

To submit the statement:

  You need to know about Quick links
  TIN Facilitation Centers (TIN-FCs) nearest to your location
  New versions of e-TDS/TCS Return Preparation Utility (RPU) and File Validation Utilities (FVUs)

These RPU and FVUs are freely downloadable utilities and can be used for preparation of   e-TDS/TCS statement(s) pertains to Financial Year 2007-08 onwards.

Different software When and why to use it
RPU Version 1.7 (Java based) This is used for preparing and validating e-TDS/TCS Statement(s) as it contains inbuilt FVUs
FVU Version 5.2 Used for validating TDS/TCS Statement(s). Applicable for quarterly e-TDS/TCS Statement(s) pertaining to FY 2010-11 onwards.
FVU Version 2.148 Used for validating TDS/TCS Statement(s). Applicable for quarterly e-TDS/TCS Statement(s) from FY 2007-08 upto FY 2009-10.

Please refer attached pdf, to know about the Key features of new version of RPU and FVUs. 

In case of any query with regards to the feature or to submit the statement please call us at 020-27218080.

For and on behalf of Tax Information Network

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