TDS :- Different Section Codes in a Single Challan & Excess Challan Amount can be adjusted in Next Year.

Friends,  CPC (TDS) team had communicated to their deductors through email on 10-09-2014 that there is no effect of Section Code mentioned in Challan and Deductor can deposit a single challan for payment of TDS deducted in a month.   There is no issue of Section Codes 94C, 94A , 94 J, 92A , 92B , 94H etc.  

Secondly excess amount of TDS can be used in the next Financial Year or adjustment of Defaults for previous years issued by Income Tax Department  etc. 

Now, there is no use to update Section Code through bank or assessing authority if  it is wrongly mentioned in challan.   The same can be corrected while submitting TDS Statement.  

Keeping in view of these important changes, every deductors should devote some time in reading the following communication of CPC (TDS) Team. 

Dear Deductor,

As per the records of the Centralized Processing Cell (TDS), it has been observed that you have used multiple challans in a month, for payment of Tax Deducted.

For Deductor's convenience, CPC(TDS) has established processing logic in the system that can accept a Single Challan for reporting of Tax Deposited in following circumstances :

• Payment of Tax Deducted under different sections of the Income Tax Act, 1961:
  
  
   • The CPC(TDS) system gives credit of TDS against different sections of the Act, even though a specific section has been quoted in the challan.
   • Example: The challan used for payment of TDS relevant to Section 192 of the Act can also be used for the purpose of reporting tax deposited under Section 194 of the Act also. 

Situation prior to Financial Year 2012-13	Consumption of Challan in TDS Statement on the basis of Section quoted in the Challan details
Situation after Financial Year 2012-13	Section quoted in Challan, at the time of depositing Tax deducted/ collected is irrelevant for the purpose of consumption in TDS Statement.

• Payment of Tax Deducted for different Assessment Years:
  
  
   • In case tax has been deposited more than the required tax deducted at source for a particular Assessment Year, the excess amount of tax can be claimed in the following quarters of the relevant year. The balance amount if any, can be carried forward to the next year for claim in the TDS statement.
   • Example: If excess payment of Tax has been made in Quarter 1 of financial year 2013-14, the same can be used for Quarter 2,3&4 of F.Y. 2013-14 as well as for Q1 to Q4 of F.Y.2014-15. The excess amount of tax paid in Q1 of F.Y.2013-14 can also be used for payment of tax default of Q1 to Q4 of F.Y.2012-13.

• Different challans used for the purpose of reporting multiple Deductees associated with different branches with same TAN:
  
  
   • The deductor may have used multiple challans for reporting multiple deductees associated with different branches, in the TDS Statement.
   • A single challan can be used for the purpose of reporting Tax Deducted for such deductees.
   • Example: If a Bank has multiple branches with same TAN, payment of Tax Deducted can be made by a single challan and all the deductees can be tagged using the same.

Based on the above information, you may use a single challan in a month towards payment of Tax Deposited. For any assistance, you can also write to ContactUs@tdscpc.gov.in or call our toll-free number 1800 103 0344.

CPC (TDS) is committed to provide best possible services to you.

CPC (TDS) TEAM

Archives (Old Procedure Click Here)

e-TDS :- Online Request for Refund of TDS deposited in Excess

Friends,   TRACES (www.tdscpc.gov.in) has provided a link to apply online Request for refund of TDS.  Earlier this facility was only available offline through Form 26B. 

Form 26B to be filed by the deductor, if he claims refund of sum paid under Chapter XVII-B of the Income-tax Act, 1961.

Download Form 26B (Click Here)

To apply online Login at www.tdscpc.gov.in  and Request for Refund is available under "Statements / Payments " as shown in below picture.

Basic Requirements for using this facility. 

             Registration of Digital Signature is required to online Request for refund of TDS deposited in Excess. 

Digital Signature:

            Registration of Digital Signature has already been enabled on TRACES for deductors. Deductors can register their Digital Signature in PROFILE after registration

Refund of Excess TDS Deposited or Adjustment of TDS

In case of excess deduction of tax at source, claim of refund of such excess TDS can be made by the deductor. The excess amount is refundable as per procedure laid down for refund of TDS vide Circular No.285 dt.21-10-1980.

The difference between the actual payment made by the deductor and the tax deducted at source or  deductible, whichever is more will be treated as the excess payment made. This amount is to be first adjusted against any existing tax liability under any of the Direct Tax Acts.  After meeting such liability, the balance amount is to be refunded.

    Circular: No. 285 [F. No. 275/77/79-IT(B)], dated 21-10-1980.

951. Procedure for regulating refund of amounts paid in excess of tax deducted and/or deductible

1. The Board have been considering the manner of refunding the amount paid in excess of the tax deducted and/or deductible (whichever is more) under sections 192 to 194D of the Income-tax Act. The Board are advised that such excess payment can be re­funded, independently of the Income-tax Act, to the person re­sponsible for making such payment subject to necessary adminis­trative safeguards.

2. In supersession of the earlier instruction on the subject, the following procedure is laid down to regulate the refund of such excess payments.

3. The excess payment would be the difference between the actual payment made by the deductor and the tax deducted at source or that deductible, whichever is more. This amount should be adjust­ed against the existing tax liability under any of the Direct Tax Acts. After meeting such liability the balance amount, if any, should be refunded to the assessee.

4. Where the tax is deducted at source and paid by the branch office of the assessee and the quarterly statement/annual return (in case of salaries) of tax deduction at source is filed by the branch, such branch office would be treated as a separate unit independent of the head office. After meeting any existing tax liability of such a branch, which would normally be in relation to the deduction of tax at source, the balance amount may be refunded to the said branch office. The Income-tax Officer, who will refund the amount, would be the one who receives the quarterly statement/annual return (in case of salaries) of tax deduction at source from that branch office and keeps record of the payments of tax deduction at source made by that branch.

5. The adjustment of refund against the existing tax liability should be made in accordance with the present procedure on the subject. A separate refund voucher to the extent of such liability under each of the direct taxes should be prepared by the Income-tax Officer in favour of the “income-tax department” and sent to the bank along with the challan of the appropriate type. The amount adjusted and the balance, if any, refunded would be debitable under the sub-head “Other refunds” below the minor head “Income-tax on companies”—major head “020—Corporation Tax” or below the minor head “Income-tax other than Union Emoluments”—major head “021—Taxes on incomes other than corporation tax” according as the payment has originally credited to the major head “020—Corporation tax” or the major head “021—Taxes on incomes other than corporation tax”.

6. Since the adjustment/refund of the amount paid in excess would arise in relation to the deduction of tax at source, the record­ing of the particulars of adjustment/refund should be done in the quarterly statement of TDS/Annual return (in case of salaries) under the signatures of the Income-tax Officer at the end of the statement, i.e., below the signatures of the person furnishing the statement.

Circular: No. 285 [F. No. 275/77/79-IT(B)], dated 21-10-1980.

     Total result regarding refund of excess TDS deposit is that adjustment of excess amount of TDS deposited can be done with in Financial Year or in quarters of same financial year.    Excess amount of TDS of a particular Financial Year can not be adjusted in next Financial Year. 

        FVU (File Validity Utility)  shows below error code in cash challans do not match with concerned Financial Year.

TDS/TCS - ERROR FILE

Line No	Record Type	Statement Type	Field Name	Challan Details Record Number	Deductee/ Salary Detail No.	Error Code & Description
7	Challan	Regular	Date of 'Bank Challan No / Transfer Voucher No'	3	-	T-FV-3076 Invalid Date Of Bank Challan No, Date prior to Financial Year

FVU Version : 3.4    Input File Name : 26QRQ3.txt