Solutions to the top queries about Short Payment and Short Deduction

How much amount do I pay for intimation received on Short Payment with Provisional Interest?

Provisional interest is calculated till the date of processing of statement. Deposit principal amount of short payment along with interest @ 1.5% per month from date of deduction till date of deposit and file the correction for the same.

I have received an intimation u/s 200A with the demand raised due to short payment. I have made the payment within the prescribed time-limit. Now what should I do?

Short Payment defaults may be raised due to challan mismatch. You are requested to check the details filed in statement corresponding to the challan.

Is the rounding off under section 288B allowed at the transaction level?

The system will not allow rounding off under section 288B at the transaction level but at the statement level.

How much amount do I pay for intimation received on Short Deduction with provisional interest?

Deposit principal amount of short payment along with interest @ 1 % per month from date of deduction till date of deposit and file the correction for the same.

I have received an intimation of Short Deduction but payment amount is not eligible for TDS as the amount is below the threshold limit. What should I do?

You can file correction statement and raise threshold flag (‘Y’) in column no. 326 (24Q), column no. 424 (26Q), column no. 729 (27Q) and column no. 680 (27EQ) for ‘Reason for no / lower deduction’.

I have received an intimation of Short Deduction u/s 194C however deductee is a transporter what should I do?

You can file correction statement and raise transporter flag (‘T’) for the particular deductee, who is a transporter, in column no. 424 (26Q) for ‘Reason for no / lower deduction’.

I have received an intimation of Short Deduction however reported deductee has a lower rate certificate what should I do?

You can file a correction statement and raise ‘A’ flag for respective deductees, in column no. 326 (24Q) & column no. 424 (26Q) for ‘Reason for no / lower deduction’.

What should I do in case of Short Payment / Short Deduction intimation received?

The default amount (along with the interest applicable till the date of payment of short payment default) will have to be deposited through challan no. 281 by ticking minor head 400. Download conso file from TRACES for filing correction and update the challan details. While filing correction fill up principal amount in column no. 402 in Form 26Q, column no. 302 in Form 24Q, column no. 702 in Form 27Q and column no. 652 in Form 27EQ and interest amount in column no. 403 in Form 26Q, column no. 304 in Form 24Q, column no. 705 in Form 27Q and column no. 655 in Form 27EQ. After adding the new challan, you will have to add new deductee rows for which short payment / short deduction has been raised and map to the corresponding challan.

 

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13 thoughts on “Solutions to the top queries about Short Payment and Short Deduction

  1. vipul

    if i have deducted tds of Rs 400 instead of Rs 500,then interest will be charged on which amount ie rs 500 or rs 100.

    Reply
    1. TDSMAN Post author

      Dear Vipul,

      Interest will be charged on that part of tds which was submitted late. In case payment for both the deductions were submitted on time then no interest will be charged. However, if the payment of Rs. 100 was made late then interest will be charged only on that part.

      Reply
  2. Rana Prashant

    i hve recieved the notice under section 200A saying short deduction..then i went through the Justification report and i found that the gross salary it showing there is too much high than actual. now plz tell how to rectify this thing ?

    Reply
  3. Abraham

    As per the notice u/s 200A for short deduction, by mistake i paid the
    challan under minor head 200 instead of 400. Can I file the revised return
    with this challan. Please reply as early as possible.

    Regards,
    Abraham

    Reply
    1. TDSMAN Post author

      Dear Abraham,

      If the challan status comes as Unmatched¢ then only you can revise. If department ignores the Minor head then the status will come as Matched¢ and there will be no need for revised return.

      Reply
  4. Bala

    The short deduction is caused by rounding off the TDS calculated to the nearest Rs.10. TDS certificates were issued and assessement would have been over for those years. Now we were issued notice for those few rupees per transaction. We realised rounding should not be done at transaction level and remitted the difference along with interest from our pocket since tracing back and deducting form vendors is not possible now. However, remittance of money isnt enough it seems. We were asked to do the e filing : to include a new challan that we paid and also to correct the amounts at transaction levels.

    It is incorrect to include the additional amounts paid by the deductor because, it is not taken from the dedctee. Further, increasing the TDS amounts in certificates for amounts not deducted is also incorrect.

    My question : Is it not enough to remitt the short deducted amount and include the challan details in the return. should we also revise the corresponding transaction row? even if that amount was not deducted. In that case, failure to deduct would entail the deductee to enjoy the TDS credit for amount not deducted. Ps inform.

    Reply
  5. SHARADA

    Respected sir,

    actually for companies we have to deduct Tds at 2%.but i deduct only 1% for the financial year 2011-12 q3,q4. i received short payments letters from tax department.i make payment other 1% with intrest .please let me know how to make correction in taxman.

    Regads
    sharada

    Reply
  6. ANIMESH CHOWDHURY

    I have submitted correction statement of 26Q for a short deduction of PAN error.it is proccessed successfully. But still short deduction showing.But still showing short deduction. Please reply as soon as possible.

    Reply
  7. kaustubh k

    I have received an intimation U/S 200 A for short deduction / collection. All details in the challan are correct and all PAN no s are valid for deductees. The total TDS amount was 220000/- and now i have recd the intimation stating that I have short deducted 14.47 Lacs . And it also says that the default amount is 17.58 Lacs including interest etc. I am an individual and am at my wits END . Can some body help me ?

    Reply
  8. Ramdarash Prajapati

    I am already using your package. One challan amount correct is 86812/- but while filing return by mistake it was put 77786/- now please inform what is correct procedure to make challan correct amount 86812/- . In Traces showing 77786/- as matched challan. While speaking to Traces or your office getting different different replies.

    Please reply.
    Regards

    Reply
  9. narayanan

    I come under the 20% bracket. but the bank had collected only 10% tax
    can I remit the balance tax now before filing my return? what. Is the proceedure?

    Reply
  10. PRATHIMA

    We have paid TDS amount @ the rate of 1% & filed the tds return within due date. Afterwards we have received an Intimation as short deduction @ the rate of 1%. The same has been paid i.e. further TDS amount @ the rate of 1% as per Intimation. The new challan is added through online Correction Statement under “Add new challan to the Statement”. Now how to alter the existing deductee detail in respect of newly added challan in RPU software. If not possible in RPU software, since two rows for the same deductee for entering two challan details is not possible, what is the other means to update the existing deductee details for newly added challan. Please clarify

    Reply
  11. PRAGNESH

    As per Intimation u/s 200A, for short deduction of Income Tax under salary, I have deposited Income Tax along with its interest mentioned therein. Now the question is how I need to file correction statement?
    Short deduction of Income Tax was due to wrong calculation of Tax only.

    Reply

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