Issue of Default Demand for e-TDS/TCS return 24Q4 by TRACES.

Quarterly statement of deduction of tax under sub section (3) of section 200 of the Income tax Act, 1961 in respect of Salary for the quarter ended June/September/December/March i.e. 24Q1, 24Q2, 24Q3 and 24Q4.  Every person, being a person responsible for deducting tax under Chapter XVII-B shall, in accordance with the provisions of sub-section (3) of section 200, deliver or cause to be delivered to the prescribed income-tax authority or to the person authorized by such authority, quarterly statement which is in Form No. 24Q in respect of deduction of tax at source under sub-sections (1) and (1A) of section 192.

A new Demand Notice for the Assessment Year 2012-13 issued by Income Tax Department to Taxpayees’ on the basis of incorrect TDS Return.  On inquiry, it is found that this demand has been raised mainly due to Technical errors of TRACES.   I mean to say, PAN numbers already corrected in 24Q4 return through submission of correction return.  But tdscpc.gov.in still showing wrong pan numbers (which have already been corrected through correction return and accepted by TRACES)  marking in Red Color and have charged maximum of tax between 20% or Tax Slab charged on employee.   This percentage has been calculated on taxable amount of the each employee.

Secondly, major error was that TRACES has shown wrong Category of employee.  Deductor had entered  category of employee as Women and demand notice has been issued  assuming the same employee as Male.  

Finally It has been decided that deductor should check their record deeply and should not pay any demand notice without his satisfaction.  However justification report is also not satisfactory report till date.

Things to be done on receipt of demand notice u/s 234E Late Filing

What should One do on receipt of demand notice u/s 234E Late Filing?

The default amount will have to be deposited through challan no. 281. Download conso file from TRACES for filing correction and tag the paid challan without adding any deductee records. While filing correction, fill up the fee amount in ‘Fee’ column in challan detail.

Note: There is no need to send any communication to TDSCPC separately.

Late filing correction in RPUFor example: Due date of filling of TDS statement form 26Q for Quarter 4 is 15th May , however statement 26Q has been filed with the delay of two(02) days. So deductor is required to quote late filing fee of Rs. 400.00( Rs. 200.00*2) as given below:

The “column” number for quoting of “fee” form wise is as under:

Form Type

Fee Column

24Q 305
26Q 404
27Q 706
27EQ 656

How will transactions of more than one buyer/seller be filed in Form 26QB – TDS on immovable property?

1)How many Form no: 26 QB should be filled online if Immovable Property is purchased by two buyers from two sellers i.e. one sale deed / agreement is in the name of two buyers from two sellers,

2) Should TDS be paid 25 % wise e.g., if property of Rs 60 lakhs is purchased then should TDS be 25%wise i.e. four Form no 26 QB should be filled & TDS be paid 25%wise?

Ans: Earlier there was confusion on this issue. However, this issue has now been clarified by Income Tax Department. In case of multiple sellers, Form 26QB needs to be filed for each seller separately. Similarly, in case of multiple buyers, each needs to issue Form 26QB separately.

Relevant FAQ on NSDL site is reproduced as under:

How will transactions of joint parties (more than one buyer/seller) be filed in Form 26QB?

Online statement cum Challan Form/ Form 26QB is to be filled in by each buyer for unique buyer-seller combination for respective share. E.g. in case of one buyer and two sellers, two forms have to be filled in and for two buyers and two seller, four forms have to be filled in for respective property shares.

Verification of e-TDS/TCS Return – FAQs

After I prepare my e-TDS/TCS return, is there any way I can check/verify whether it conforms to the prescribed data structure (file format)?
Ans : Yes, after you have prepared your e-TDS/TCS return you can check/verify the same by using the File Validation Utility (FVU). This utility is freely downloadable from the NSDL-TIN website.

What is File Validation Utility (FVU)?
Ans :  FVU is a program developed by NSDL, which is used to ascertain whether the e-TDS/TCS return file contains any format level error(s). When you pass e-TDS/TCS return through FVU, it generates an ‘error/response file’. If there are no errors in the e-TDS/TCS return file, error/response file will display the control totals. If there are errors, the error/response file will display the error location and error code along with the error code description. In case you find any error, you can rectify the error and pass the e-TDS/TCS return file again through the FVU till you get an error-free file.

What is the ‘Upload File’ in the new File Validation Utility?
Ans :  ‘Upload File’ that is generated by the FVU when the return is validated using the FVU has to be filed with TIN-FC. This ‘upload file’ is a file with the same filename as the ‘input file’ but with extension .fvu. Example ‘input file’ name is 27EQGov.txt, the upload file generated will be 27EQGov.fvu.

What are the platforms for execution of FVU?
Ans :  For Quarterly Returns, Java has to be installed to run FVU. Details are given in FVU section of NSDL-TIN website.

What are the Control Totals appearing in the Error/Response File generated by validating the text file through File Validation Utility (FVU) of NSDL?
Ans :  The Control Totals in Error/Response File are generated only when a valid file is generated. Otherwise, the Error/Response File shows the nature of error. The control totals are as under:

  • Number of deductee/party records : In case of Form 24Q, it is equal to the number of employees for which TDS return is being prepared. In case of Form 26Q/27Q, it is equal to the total number of records of tax deduction. 10 payments to 1 party would mean 10 deductee records.
  • Amount Paid : This is the Total Amount of all payments made on which tax was deducted. In case of Form 24Q, it is equal to the Total Taxable Income of all the employees. In case of Form 26Q/27Q, this is equal to the total of all the amounts on which tax has been deducted at source.
  • Tax Deducted : This is the Total Amount of tax actually deducted at source for all payments.
  • Tax Deposited : This is the total of all the deposit challans. This is normally the same as Tax Deducted but at times may be different due to interest or other amount.
Are the control totals appearing in Form 27A same as that of Error/Response File?
Ans :  Yes, the control totals in Form 27A and in Error/Response File are same.

What if any of the control totals mentioned in Form No. 27A do not match with that in e-TDS/TCS return?
Ans :  In such a case the e-TDS/TCS return will not be accepted by the TIN-FC. You should ensure that the control totals generated by FVU and that mentioned on Form No. 27A match. In case of any difficulties/queries, you should contact the TIN-FC or TIN Call Centre at NSDL.

PAN or TAN Register on TRACES and Free Download TDS Certificates

As per the records of Centralized Processing Cell (TDS), the TDS Statements have been filed by you for different quarters. However, you have not yet registered on TRACES (https://www.tdscpc.gov.in). In this regard, your attention is invited to the CBDT circulars 04/2013 dated 17.04.2013, No. 03/2011 dated 13.05.2011 and No. 01/2012 dated 09.04.2012 on the Issuance of certificate for Tax Deducted at Source in Form 16 / 16A as per IT Rules, 1962. It is now mandatory for all deductors to issue TDS certificates after generating and downloading the same from ‘TDS Reconciliation Analysis and Correction Enabling System’ or (https://www.tdscpc.gov.in) (hereinafter called TRACES).
  • In view of above circulars, it may kindly be noted that only the TDS Certificates downloaded from TRACES will be valid. Certificates issued in any other form or manner will not comply to the requirements referred in the Income Tax Act, 1961 read with relevant Rules and Circulars issued in this behalf from time to time
  • In addition to the facility to download TDS Certificates bearing unique TDS certificate number, the portal provides other facilities, some of which are as under:
    • View of Deductor Dashboard to know about your TDS performance
    • PAN Verification
    • View of Challan status
    • View of Statement Status
    • Download of Consolidated TAN-PAN File for submitting ‘Correction Statements’ in case of incomplete and incorrect reporting
    • Download of Justification Report to know the details of ‘TDS defaults’, if any, on processing of TDS statements
The above facilities including downloading of the TDS Certificates can be availed only by registering yourself with TRACES. You are accordingly requested to register immediately on TRACES. The procedure of registration can be accessed by clicking the link https://www.tdscpc.gov.in/en/user-manual.html.
 
For any assistance, you can write to   or call our toll-free number 1800 103 0344

Procedure for filing e-TDS/TCS Returns with Insufficient Deductee PAN.

Finance Act, 2003 amended section 206 of Income Tax Act, 1961 to make it mandatory for corporate deductors to furnish their TDS returns in electronic form (e-TDS returns). The scheme for furnishing TDS return in electronic form was notified by the Central Board of Direct Taxes (CBDT) vide Notification No. 205/2003 dated August 26, 2003.

Finance Act, 2004, further amended section 206 of the Income Tax Act, 1961, making it mandatory for government deductors also to furnish e-TDS returns from F.Y. 2004-05. E-TDS returns are to be prepared in accordance with the data structure (file format) specified by Income Tax Department (ITD).

Income Tax Department vide its notification no. 238/2007 dated August, 2007 amended Rules 31A of the Income Tax Rules, 1962 to provide mandatory electronic filing of TDS return in respect of following cases :

  • Deductors required to get accounts audited u.s. 44AB in the immediately preceding financial year.
  • Deductors having number of deductee records in a quarterly return for any quarter of the immediately preceding financial year more than or equal to 50.
How do I file my quarterly e-TDS/TCS return, if I don’t have PANs of all deductees?
Ans.:  You can file your e-TDS/TCS return for the deductees who have valid PANs and subsequently file correction return for remaining deductees whose PANs were not available with you while furnishing regular return.

How do I include deductees whose details were not provided earlier due to unavailability of PAN?
Ans.:  You are required to file a correction return in a prescribed file format available at http://www.tin-nsdl.com

What amount should be mentioned in the challan details in case a regular return is filed only for those deductees whose PAN is present and subsequently a correction is filed with the remaining deductees?
The amount deposited vide that particular challan should be mentioned in the original as well as correction return. Refer below example:

  • Suppose a challan payment of Rs.1,00,000/- has been made for non-salary TDS against 100 deductees each with TDS of Rs.1,000/-. Under the existing procedure the deductor will have to quote at least 85 PAN failing which his return will be rejected.
  • If there are only 50 deductees whose PAN is available and the deductor attempts to file a return with details of 100 deductees with PAN of only 50 deductees, the return will automatically be rejected at present.
  • However, if he files a return with challan amount of Rs. 1,00,000/- and with details of 50 deductees with PAN, with deductee total of Rs.50,000/-, the return will be accepted. It means the deductor can furnish the details relating to such deductees whose PANs are available.
  • The deductor can later file correction returns with other details of remaining deductees with the same challan details, i.e., the challan amount should be the amount deposited (in this case Rs. 1,00,000/-).
  • The return will be accepted so long as the TDS total of incremental deductees is less than or equal to the balance of Rs.50,000/-.
Permanent Account Number of Deductee
In case valid PAN of a deductee is not available, the deductor should mention the details as under :
PANAPPLIED – in case deductee does not have a PAN but has applied and provided proof of application of PAN.
PANNOTAVBL – where deductee has not given any PAN or proof of PAN application. This means PAN is not available.
PANINVALID – where deductee has provided PAN but it is structurally invalid. 
The Deductee PAN field should contain a structurally valid PAN or PANAPPLIED or PANNOTAVBL or PANINVALID only. If any other value is mentioned in this field then the FVU will give an error during validation of the TDS return.

How to check e-TDS Challan Status Query ?

 
TDSCPC.GOV.IN has also provided a facility to check the Challan Status Query  vide which it can be checked that has there any challan not claimed by deductor in the particular Financial Year or not.  This function is helpful to resolve the default notice issued by Income Tax Department.   

In case any deductor receive demand notice from income tax department, first of all he may check this function for unclaimed challan.  If unclaimed challan is available it means that either complete challans have  not been  entered in etds return or wrong data of challans have been  entered  in TDS return. 

There are three types of inquiries available which can be seen in below picture :

1. All.
2. Claimed. 
3. Unclaimed.
 
Period can be entered in specified format i.e. 01-Apr-2013 etc. or dates can be entered only with in financial year. 

Provide TDS Certificate (Form 16A) to customers in Time – RBI

Resurve Bank of India asked to banks vide issued a notification No. RBI/2013-14/361 DBOD.No.Leg.BC.65/09.07.005/2013-14 dated 6th November, 2013 regarding issuing of TDS Certificate (Form No. 16A) to their customers from whose Income Tax has been Deducted at Source in due time.  The detailed notification is as under:

 

RBI/2013-14/361
DBOD.No.Leg.BC.65/09.07.005/2013-14

 

November 6, 2013

All Scheduled Commercial Banks
(excluding RRBs)

Dear Sir/Madam,

Timely Issue of TDS Certificate to Customers

It has been brought to our notice that, some banks are not providing TDS Certificate in Form 16A to their customers in time, causing inconvenience to customers in filing income-tax returns timely.

2. The matter has been examined and with a view to protect interest of the depositors and for rendering better customer service, banks are advised to provide to their customers from whose income tax has been deducted at source, TDS Certificate in Form 16A. Banks are advised to put in place systems that will enable them to provide Form 16A to the customers within the time-frame prescribed under the Income Tax Rules. Banks should avoid waiting till the last moment.

3. This advice is issued under Section 36 (1) (a) of the Banking Regulation Act, 1949 (10 of 1949).

 

Yours faithfully,

(Rajesh Verma)
Chief General Manager

How to Correct e-TDS, Paper or Online statements or returns ?

Deductor/DDO can file a correction e-TDS statement/return for any modification in e-TDS statement/return accepted at TIN central system. Correction statement/return can be prepared by using the TDS consolidated file only, available at the CPC-TDS portal http://www.tdscpc.gov.in through TAN registration. Validation of correction statement/return is in line with regular e-TDS statement/return. The validated e-TDS correction statement/return (.fvu file) copied on a CD/DVD/pen drive is to be submitted along with the copy of provisional receipt of regular e-TDS statement/return, physical Form 27A duly signed and SSR at TIN-FC. On successful acceptance of correction e-TDS statement/return at the TIN-FC, an acknowledgement containing a unique 15 digit token no. is provided to the Deductor/DDO. Deductor/DDO can view the status of e-TDS statement/return on TIN website. The physical TDS statement/return is to be filed again in case of any correction to a physical TDS statement/return accepted at TIN. The deductor will submit the duly filled and signed physical TDS statement/return along with a copy of provisional receipt of regular paper statement/return at TIN-FC. On successful acceptance of correction paper statement/return at the TIN-FC, an acknowledgement containing a unique 15 digit token number is provided to the Deductor/DDO. Deductor/DDO can view the status of paper statement/return on TIN website. Deductor/DDO can file a correction e-TDS statement/return for any modification in e-TDS statement/return accepted at TIN central system. Correction statement/return can be prepared by using the TDS consolidated file only, available at the CPC-TDS portal http://www.tdscpc.gov.in through TAN registration. Preparation and validation of e-TDS statement is in line with regular e-TDS statement/return (submitted at TIN-FC) Deductor/DDO can login with its user ID and DSC and upload the validated e-TDS file (.fvu file) generated by the FVU to the TIN website. On successful acceptance of correction e-TDS statement/return at TIN, an acknowledgement containing a unique 15 digit token number is generated and displayed. There is no need to submit copy of provisional receipt of regular e-TDS statement/return, physical Form 27A and SSR in online upload. Deductor/DDO can view the status of e-TDS statement/return on TIN website.