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.

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