Late Payment Intimation – reasons & how to resolve?

In the TDS Return filed, the intimation for Late Payment can be received for the following reasons: 

Case #1: There was a delay in payment of TDS dues for which interest was not paid before filing TDS Return 

Case #2: The interest component was present in the Challan, but the ‘interest was not allocated’

Case #3: Challan was paid on time, but owing to some error in the ‘date of deduction / payment’ in the corresponding deductee record(s) 

Procedure to handle the Late Payment intimation: 

Case#1: Interest not paid

  • Make the payment of the interest using ITNS 281 Challan for the amount as per the intimation
  • This Challan needs to be added online through TRACES
  • While adding this Challan through TRACES, make sure that apart from the amount of the Challan, the interest amount is also to be entered under ‘Interest Allocation’ – this is very important
  • Once successfully done, it will take 24-48 hours for the Challan to be visible in TRACES 

Case #2: ‘Interest not Allocated’

  • The interest now needs to be allocated against the Challan(s) through TRACES
  • In TRACES, identify the Challan, and place the interest amount under ‘Interest Allocation’ – needless to say, there should be enough balance in the Challan for this allocation
  • Once successfully done, it will take 24-48 hours for the modified Challan(s) to be visible in TRACES

Case #3: Error in ‘Date(s)’ in Deductee Records

  • The incorrect ‘Date(s)’ in the Deductee Records needs to be rectified by preparing a Correction Statement
  • This Correction Statement needs to be filed
  • Once successfully done, it will take around 24-48 hours for acceptance

Steps for preparing Correction Returns

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