TRACES: new website to replace TIN-NSDL for TDS return Filing, Matching, correction, Form 16/16A, FVU files

TRACES stands for TDS Reconciliation Analysis and Correction Enabling System and has been set up by TDS Centralised Processing Cell of the income-tax department.

TRACES will integrate the following components:

  1. Tax information Network
  2. Automated TDS Challan Matching
  3. TDS Defaults Processing
  4. IVR/ Call Centre
  5. Web Portal

New Web Portal:

The new portal has been created using latest technology to enhance swift interaction between the deductor, deductee, income-tax department and CPC.

The following features are/will be available to deductors and deductees:

  • Dashboard giving summary of Deductors account
  • Online registration of TAN
  • Online filing of TDS Statements
  • Online corrections of TDS statements
  • Default Resolution
  • View Form 26AS
  • Download Form 16/16A/Consolidated TDS File
  • Grievance registration and resolution

Not all of the above features have been activated so far.

NSDL web site V/s TRACES website: Current Status

Currently several online services are provided to deductors and deductees on TIN site by NSDL.

The following table presents various services at both the sites:



Registration at TRACES:

Users who have already registered at NSDL TIN site, need not register again on TRACES. Their registration details are migrated and they can login at TRACES with their NSDL-TIN login details. However Tin Login details will work at TRACES only single time and you will be asked to create new id immediaely. Fresh registrations on NSDL site have been stopped

New registrations can be done at TRACES site and online help is available under the FAQ link. Click here


No deduction in certain cases – specified payment under section 197A(1F)


NOTIFICATION NO. 56/2012 [F. NO. 275/53/2012-IT(B)], DATED 31-12-2012

In exercise of the powers conferred by sub-section (1F) of section 197A of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies that no deduction of tax under Chapter XVII of the said Act shall be made on the payments of the nature specified below, in case such payment is made by a person to a bank listed in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934), excluding a foreign bank, namely:-

 (i) bank guarantee commission;

(ii) cash management service charges;

(iii) depository charges on maintenance of DEMAT accounts;

 (iv) charges for warehousing services for commodities;

(v) underwriting service charges;

(vi) clearing charges (MICR charges);

(vii) credit card or debit card commission for transaction between the merchant establishment and acquirer bank.

  • This notification shall come into force from the Ist day of January, 2013.




Grossing up in absence of PAN should be at rates in force and not at 20%

As regards the grossing up u/s 195A of the Income-tax Act is concerned, we find that the provision reads as under:

[In a case other than that referred to in subsection (1A) of sec. 192, where under an agreement] or other arrangement, the tax chargeable on any income referred to in the foregoing provisions of this Chapter is to be borne by the person by whom the income is payable, then, for the purposes of deduction of tax under those provisions such income shall be increased to such amount as would, after deduction of tax thereon at the rates in force for the financial year in which such income is payable, be equal to the net amount payable under such agreement or arrangement.

Thus, it can be seen that the income shall be increased to such amount as would after deduction of tax thereto at the rate in force for the financial year in which such income is payable, be equal to the net amount payable under such agreement or arrangement. A literal reading of sec. implies that the income should be increased at the rates in force for the financial years and not the rates at which the tax is to be withheld by the assessee. The Hon’ble Apex Court in the case of GE India Technology (cited Supra) has held that the meaning and effect has to be given to the expression used in the section and while interpreting a section, one has to give weightage to every word used in that section. In view of the same, we are of the opinion that the grossing up of the amount is to be done at the rates in force for the financial year in which such income is payable and not at 20% as specified u/s 206AA of the Act.


TDS not applicable on service rendered by Tenants Association to members even if the same is for remuneration

On the facts of the present case, we have noted that there is no finding by any of the authorities below that services are rendered to non-members. There is a reference to the services rendered to the outsiders in the orders of the authorities below, but it is in the context of analysis of judicial precedents, and, therefore, nothing turns on that. As long as services are rendered to the members, even for a remuneration, the same will be covered by the principles of mutuality. As far the allegation that members have deducted at source from payments to the assessee and for this reason, the receipt is to be taken as taxable receipt, it is only elementary that conduct on the part of the person making payment cannot determine character of receipt in the hand of recipient. That apart, it is also a fact of life that sometimes taxpayers err on the side of excessive caution and deduct taxes as a measure of abundant caution. The mere deduction of tax at source by person making the payment in our humble understanding, cannot lead to the conclusion that receipt was taxable in nature. It is too native to the accepted or to be even given a serious consideration. The factors relied upon by the authorities below, in rejecting assessee plea, are not germane to the context and devoid of legally sustainable merits. The plea of the assessee for tax exemption on the ground of mutuality, therefore, must succeed.