e-TDS :- Defaults relating to Non-Salary Returns (26Q4) for the F.Y. 2009-10 or prior to F.Y. 2009-10

Friends,   It is already known by  all Deductors that Income Tax Department (TRACES) has issued different types of default notices.   Out of which one is explained here in the interest of deductor which relates to Non-Salary TDS returns quarter 4 for Financial Year 2009-10 or it's prior. 

In the Financial Year 2009-10 or upto 31.03.2010 , deductors  pass entry  interest or commission etc  as Debit Expenses or Credit Party/Depositor except salary in their books on the last day of Financial Year  and deduct TDS on it.  Due date for deposit of such TDS were 31th May of each year. 

In issued defaults , benefit of above due dates have not been shown.  It does not mean that there is lapse in system in generating Justification Report.  But also there is lapse in submission in TDS return. 

I mean to say that there is Flag in TDS/TCS return which is to be used like shown in below screen in NSDL RPU/software:-

If we  use proper flag in TDS return then Default will be generated with giving benefit of due date 31th May.

Specifically :- The above flag is useless in case of Salary TDS/TCS return

e-TDS :- e-tutorial for Aggregate TDS Compliance

Friends,   Tds deductors have received notices based on PAN for their all TAN's.  These notices have been generated since 2007 and it's onwards.  The below e-Tutorial is given for detailed information regarding how to download TAN wise default after getting aggregate TDS default notice. 

E-Tutorial - Aggregate TDS Compliance

TDS :- Online Correction for "Short Payment Default"

We are glad to inform that the Online Correction functionality provided by CPC (TDS) has been availed by a large number of deductors for the purpose of carrying out corrections and over 2 Lakh Online Corrections have been submitted. The corrections include resolution of Short Payment Defaults that relate with unmatched challans. You are informed that TRACES enables Online resolution of “Short Payment default” on account of unmatched challans. The deductor has an online view of all available unconsumed challans, which can be tagged with unmatched challans, to close the above defaults.

Further, as you are aware that at the time of filing TDS statements, it is mandatory to quote the challan particulars through which TDS payments have been made. However, it is observed that:

At times, data entry mistakes are committed, while reporting tax payments in the respective TDS statements.

Though CPC (TDS) makes best efforts to match such challans, however, they may remain unmatched leading to “Short Payment” demand.

The above results into issuance of notices by the CPC (TDS) and field TDS officers.

To make the resolution process non-intrusive, CPC (TDS) proposes a new change at the time of submitting request for download of TDS Certificates (Forms 16/ 16A) for relevant period.

Actions to be taken: Following are key information to be noted in this regard:

• a. You are requested to take appropriate action at the earliest for closure of the Short Payment defaults, to avoid any inconvenience in downloading of TDS Certificates.
  
• b. The Online Correction facility of TRACES needs to be used for closure of the Short Payment default, available even without digital signature.
  
• c. CPC(TDS) recommends to close the above default by tagging unconsumed challans, if available in CPC(TDS) system, through Online Correction.
  
• d. Details of defaults will be provided during Online Correction process after logging into the web portal “TRACES”.
  
• e. In case there is no available challan for consumption, the deductor is required to first deposit the due tax in the bank and then the same challan will be available for tagging in CPC(TDS) system after around 3-4 days of deposit.
  
• f. Once the challan is suitably tagged and Online Correction is submitted to CPC(TDS), it shall process the statement, thereby rectifying the Short Payment default
  
• g. The user will not be able to download TDS Certificates for the relevant TDS statement until closure of the above default. Source- CPC (TDS)

e-TDS :- Default Notice

Friends,  Today I have checked a new Demand Notice for the financial year 2011-12 or Assessment Year 2012-13 worth Rs. 2.75 Lakh.   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. 

e-TDS :- Solution of Default Notice issued by Income Tax Department regarding 24Q4

I have recently received a TDS Demand Notice from Income Tax Department for a amount on account of Short Payment.  I checked my record or TDS return data and found that all payments/deposits of TDS have been made in time.  There was no such amount which was shown in notice as short payment.  In the first attempt, I made a request at www.tdscpc.gov.in for download justification report.  Before getting justification report, I checked my TDS data again and found that Tax on Taxable Income is not correct.  Tax has been entered on the basic of "Others" instead of  "Senior Citizen".   Now I got relaxed and feel that there is no need of justification report.   Finally I have again made request to download NSDL Consolidated File and submit correction return.   

Permanent Solution of demand notice regarding 24Q4

                In my view,  this demand has been raised due to lake of NSDL software i.e. RPU or FVU.  Neither FVU support it Nor RPU.   I mean to say Income Tax in 24Q4 should be calculated system based or should be checked through File Validation Utility(FVU).  Man is made for errors but system can avoid errors done by Man.

e-TDS :- View Default Summary at TRACES

Friends,

                    As the defaults has been generated by Income Tax Department for the Financial Year 2012-13 regarding late submission of TDS returns or  late payments of TDS/TCS etc.  There is no detail of defaults in Notice issued by department.   It has also mentioned in notice that detail of defaults are available at www.tdscpc.gov.in.   Complete path of detailed default along with screen shoot of the "view default summary " is given below :-

Path  at tdscpc.gov.in = Login > Defaults > View Default Summary > F.Y. > Quarter  and press go button. 

Now, on pressing  quarter next screen will require detail of one challan and three unique  Pan Numbers along with TDS amount.  After that default file will be available under download link. 

e-TDS Defaults

TDS defaults

Failure to deduct the whole or part of the Tax at source (non-deduction, short deduction or delay in deduction)

1. Failure to deposit whole or part of the TDS (non-deposit, short deposit or late deposit)

2. Failure to apply for TAN within the prescribed time limit or failure to quote TAN on allotment as required under section 203A.

3. Failure to furnish, in due time, TDS returns or TDS certificates or to deliver or cause to be delivered a copy of declaration in form no. 15H/15G/27C/copy of quarterly statement.

4. Failure to mention the PAN of the deductee in all quarterly statements as well as in all certificates furnished.

Consequences of Defaults

e-tds Defaults- Intimation u/s 200A of I.T. Act, 1961 for financial year 2009-10 or another

Income Tax Department has issued Default Letters to the e-tds/e-tcs Deductors/Collectors.  Summary of defaults are given in the following formats. 

• S.No.
• RRR Number
• Short Deduction -Amount
• Short Deduction -Interest
• Short Payment -Amount
• Short Payment -Interest
• Late Payment Interest -till dt of deposit of tax
• Late Payment Interest -till dt of gen of intimation
• Total

Maximum of defaults are correct but some defaults have been raised due to system error etc like  due date when payment made at the end day of the Financial Year.   System generates due date on the basis of  7 working days of the next following month which is not correct.    

Secondly I have just checked that in a case Interest was charged on "Late Payment of Interest".  Initially, deductor was agree to deposit the interest amount of approx. Rs. 250/-, but after enquiry  Default Status under Tan Registration link, It was found that too many demands have been raised by income tax department due to wrong Category of Tan.  By mistake  category of his TAN was uploaded Central/State.  Due to this his Due Date of each deduction was same day on which he had made payment.   

Therefore, in case you have deposit TDS in time and submit etds/tcs return in time, don't deposit any default amount before its checking in Default Status available in TAN Registration .