Dos & Don’ts for TDS Returns

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Given below are some dos and don’ts for the filing of TDS returns:


  1. Ensure that TDS return is filed with the 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 the correct rate for each deductee record.
  6. File correction statement as soon as the discrepancy is noticed.
  7. Issue TDS certificate downloaded from TRACES website.


  1. Don’t file late returns as it affects deductee tax credit.
  2. Don’t quote incorrect TAN/PAN or use PAN in place of TAN or vice versa.
  3. Don’t enter incorrect challan.
  4. Don’t make mistake while mentioning Assessment Year in the challan.

197 Certificate – Rationale & Brief Analysis

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What is 197 Certificate?

The section 197 of Income Tax Act, 1961 provides the facility of non-deduction or lower deduction of tax. The assessee whose TDS is to be deducted on certain receipts can make application before Assessing Officer to get this benefit. The deductee can apply for certificate for non-deduction or lower deduction of tax on his receipt in Form 13. The deductor needs to give this certificate details while filing TDS return and needs to validate before filing.
197 Certificate should be of 10 digit & numeric number. Only registered users of TRACES can download 197 Certificate from 2018-19 onwards.

What are the Steps for Downloading 197 Certificate?

The steps for Downloading 197 Certificate are given below:

1.  Log in to TRACES site as a Deductor.
2.  Click on Inbox under Communication Tab.
3.  Select Category of Communication: Certificate u/s 197,206C.
4.  Click on Go button. Communication detail will appear under Action Required option.
5.  Select the Row of Issuance of Certificate.
6.  Click on Download Certificate tab to download it.
7.  User can view Communication Category details after clicking on View Details tab.
8.  Now log in to TRACES site by entering User ID, Password ,TAN of Deductor and Captcha.
9.  Click on Download 197/206 Certificate available under Downloads tab.
10. Mention Financial Year, Deductee PAN or Request No. List of available certificate will appear.
11. Click on hyperlink Download/View Certificate to download and view Certificate.

Some Informations about Validation of 197/195(3) Certificate

  • The Deductor can validate 197/195(3) Certificate from 2007-08 onwards from TRACES.
  • If error message showing as No data is available for specified search criteria on TRACES site, reasons can be shown as Certificate is not issued for related PAN/TAN Number.

What are the Steps for Validating 197/195(3) Certificate?

The steps for Validating 197/195(3) Certificate are given below:

1.  Log in to TRACES site as Deductor
2.  Click on Validate Lower Deduction u/s 197 & 195(3) under Statements/Payments tab to            validate 197/195(3) Certificate.
3.  Fill required details such as PAN of Deductee and Financial Year.
4.  Details of 197 & 195(3) Certificate will appear.
5.  Consumption Details will be viewed by clicking on Amount Consumed in Particular row.

Source: TRACES


Points to remember regarding TDS statement

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Given below are the points one should remember regarding TDS statement:

  • Correct Reporting: Cancellation of TDS return and deductee row is no longer permissible. Accordingly, it is very important to report correct and valid particulars (TAN of the deductor, Category (Government / Non-Government) of the deductor, PAN of the deductees and other particulars of deduction of tax) in the quarterly TDS return
  • Quote correct and valid lower rate TDS certificate in TDS return wherever the TDS has been deducted at lower / zero rate on the basis of certificate issued by the Assessing Officer
  • Last Provisional Receipt Number to be quoted in regular TDS / TCS returns: While filing new regular (original) TDS return, it is mandatory to quote the last accepted Provisional Receipt Number of the regular quarterly TDS / TCS return of any form type
  • TDS return cannot be filed without quoting any valid challan and deductee row
  • Late TDS filing fee, being statutory in nature, cannot be waived
  • Download PAN Master from TRACES and use the same to file new statement to avoid quoting of incorrect and invalid PAN
  • Validate PAN and name of fresh deductees from TRACES before quoting it in TDS statement
  • Download TDS certificate from TRACES ( bearing unique TDS certificate number and issue to the taxpayers within due date
  • File correction statements promptly in case of incomplete and incorrect reporting
  • Download the justification report to know the details of TDS defaults, if any, on processing of TDS return
  • Do view your Dashboard regularly to know about your TDS performance
  • Government deductors should obtain BIN (Book Identification Number) from their Accounts Officer (AIN holder) in time and quote the same correctly in TDS statement

Tips to avoid Defaults in TDS Returns

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  • Make sure taxes are deducted on time and at correct deduction rates /amount. The applicable section under which the deduction falls should be correctly applied.
  • Tax needs to be deducted either when payment is made or when the amount is credited, whichever is earlier. It implies that the tax needs to be deducted on the same day when advance payments are made. The late deduction is a default and will attract interest.
  • Taxes deducted during the course of the month should be deposited on time. Typically it is by 7th of the following month. The only exception is that for deductions in March, it needs to be deposited by 30th April.
  • TDS Returns needs to be filed on completion of each quarter. Returns for Salary & Non-Salary TDS is to be filed separately in Form 24Q & Form 26Q respectively.
  • Use a proper TDS Return preparing software/tool that helps in predicting possible errors/defaults. This would prevent unnecessary hassles later.
  • Make sure TDS Returns are filed on time to avoid penalty on the delayed filing. Typically, TDS Returns are to be filed by the end of the month following the quarter. Returns for 1st quarter is to be filed by 31st July.