TAX DEDUCTION/ COLLECTION AT SOURCE
1
RELEVANCE OF TDS
Govt makes
welfare schemes
Forecasts revenue
for a year
(Borrowings/
taxes)
Round the year
fund flow ensures
effective funding of
schemes
Effective
implementation of
schemes
TDS deposited
every month
ensures circulation
of money
2
TDS/ TCS WORK FLOW
Obtain TAN
Deduct/ collect taxes from liable payments
(at the time of payment/ receipt or, at the
time of debiting/ crediting the books) at
prescribed rates
Deposit TDS/ TCS (Challan 281) within the
prescribed time limit
File quarterly statements (24Q, 26Q,
27EQ) withinn the prescribed time limit in
the prescribed manner
Issue TDS/ TCS certificates within the
prescribed time limit
3
WORK FLOW OF e-FILING OF STATEMENTS (prior
to CPC TDS)
Deductor
deducts/ collects
tax
Deductor pays
tax
Preparation of estatement and
submitting it at
TIN-FC in eformat
Processing of
statement by
NSDL
Uploading of
statements to
NSDL
Uploading of
statement to
agency of NSDL
Intimation
generated by
I.T.Department
Correction
statement filed at
TIN FC, followed
by processing at
NSDL
26AS generated
followed by
processing
4
WORK FLOW OF e-FILING OF STATEMENTS (post
CPC TDS)
Deductor
deducts/ collects
tax
Deductor pays tax
Preparation of estatement and
submitting it at
TIN-FC in eformat
Intimation
generated by I. T.
Department
Processing of
statement by CPC
TDS
Transfer of
statement to CPC
TDC
Correction
statement filed at
TIN FC, followed
by transfer of
statement to CPC
TDS
Processing of
correction
statement by CPC
TDS
26AS generated
followed by
processing
Uploading of
statement to
agency of NSDL
Uploading of
statements to
NSDL
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Taxpayer
Deductor
Advance Tax,SA Tax
TDS Deposit
Banks
e-TDS statement
e-filed Income
tax Returns
OLTAS
AST/CPC-Bengaluru
TIN-FC
•Matching of
Tax
Challans
Credits •Generation of
PAN ledgers
CPC-TDS
DEDUTORS
PORTAL
26AS VIEW TAXPAYERS
•Identification of
defaults
•Portal,DMS,BI,
Other
AO portal
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CPC (TDS): Game Changer
- Deductors will get
benefitted by nonintrusive integrated online
services related to
Statement/ Challan
processing status,
Default information, TDS
certificates and real-time
support for clarifications.
- Taxpayers will have the
convenience of viewing
26AS on a real-time
basis and real-time
support for clarifications.
- Field AOs will be
enabled to ensure
enforcement and
compliance through
online Ticket
Management System.
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CPC (TDS) for Deductors

TRACES: https://www.tdscpc.gov.in

Dashboard
- Statement Status and Default
payable
- Deductor Compliance Profile
Downloads
-
TDS Certificates Form 16/ 16A
Form 16B
Form 27D
Transaction Based Report for
Non - Residents
- Consolidated Statement File
- Justification Reports

Online Corrections
Aggregated
Report

View Defaults Summary
Non - Resident Taxpayer
Registration

Online PAN Verification

Statement and Challan Status
TDS
Compliance
e-Tutorials and FAQs
Circular and Notifications

TAN – PAN Consolidated File
CPC (TDS) Communications
8
Deductor Functionalities in
TRACES
Online correction
Default Summary
Deductor Dashboard
Statement Status
Challan Status
View TDS/TCS Credit
PAN Verification
Justification report
Download Forms
Validation of 197 Certificate
Non Filing of Statement
Request for Resolution
Tag Replace Challan
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Deductor’s Dashboard
•
•
•
Deductor’s Dashboard displays important information at one
screen. The following information can be viewed by the deductor in
its dashboard:
Statement Status: Processing status of the Statements of last
four quarter along with Default Summary.
Communication Inbox: - To view the recent communication
made between TRACES and Deductor. This also facilitates the
downloading of Intimations sent to the deductor.
Summary of recent activity by the deductor.
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Deductor Dashboard
Statement/ Payment Status
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Back
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View Default Summary
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View Default Summary
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Aggregated TDS Compliance Report

An entity level PAN associated with more that one TANs, for example PAN of the
Central Office, Headquarter etc., having more that one TANs for its branches,
can review the "Aggregated TDS Compliance" report on a regular basis to
improve TDS compliance at Organization level.

The feature assists in effective TDS administration, monitoring, control and
compliance at Organization level.

While conducting Audits, the above feature can be used for the purpose of
identifying Defaults in respect of all TANs associated with the entity level PAN.

The feature will be extremely useful for the purpose of complying with the
provisions of Section 40(a)(ia) of the Income Tax Act, 1961 by the concerned
entity, to ensure that correct information is disclosed in paragraph 27 A & B of
the Tax Audit Report (Form 3CD) u/s 44AB of the Act.

Functionality available for Financial Year 2007-08 onwards.

The download of the list of defaults of various TANs associated with a PAN will
be available in Excel Format for which a request has to be placed.
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Aggregated TDS Compliance Request (Contd.)
Select ; Aggregated
TDS Compliance
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Aggregated TDS Compliance Request (Contd.)
Click on ‘View All’ to
view all download
requests
Enter Request Number
(Search Option 1) or
Request Date (Search
Option 2
Copyright © 2012 Income Tax Department
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Online Corrections Functionality
Important Facts:
•Statements for Financial Year 2012-13 onwards only will be available for
Online Corrections.
•Digital Signature is mandatory for all type of Online Corrections, except for
Challan Corrections.
•The following actions can be performed with Online Corrections:
• Tag Unmatched Challans
• Corrections for Overbooked Challan – movement of Deductee Rows
• Modify/ Add Deductee details
• PAN Correction
• Update Personal Information
• Pay 220, Interest, Levy for Late filing
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Online Corrections

This feature enables the Deductor to file Online Correction statements
through TRACES portal without downloading TDS/TCS Consolidated File.

Apart from the currently available facilities for PAN Correction and Challan
Correction. Following facilities are to be allowed
PAN Correction
Challan Correction
Add challan to statement
Modify/Add deductee row
Modify Salary details
Pay 220I, Late Payment, Late Deduction and Late Filing Interest
Update of Personal Information
Movement of Deductee Rows
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PAN AND CHALLAN CORRECTION BY
DEDUCTOR
New functionality
Utility
PAN Correction
mechanism introduced at
the deductor portal of
TRACES
Deductor will not have to
go through the tedious
process of filing correction
statement, by downloading
conso file in case only PAN
needs to be corrected.
Challan correction
mechanism introduced at
the deductor portal of
TRACES
Matched challans can be
corrected to the extent of
section, amount of interest
and others
Unmatched challans can
also be consumed now.
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Download Form 16
•
•
•
•
Data in Form 16 will be as per latest statement processed (Form 24Q ) for selected
FY & Quarter
Download request for Form 16 for a particular FY can be submitted only after Form
24Q statement for Q4 for the selected FY is filed by deductor and processed by
TDS CPC. Statement filed should not have been cancelled or NIL Statement.
Form 16 can be downloaded from FY 2007-08 onwards
For a given FY, TAN and PAN, there will be only one Form 16. In case of more than
one employer, a PAN holder can have those many Form 16s
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Justification Report
Click on Help
icon for help
text for this
screen
Select Financial Year,
Quarter and Form
Type for which
Justification Report is
required and click on
‘Go’
•
•
Validation screen will be presented on click of ‘Go'
Request for Justification Report can be submitted only if:
 Selected statement has been not filed as paper return
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Back
Back
27
Back
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
MIS report for defaults is now available for Field CsIT. Please use the same for recovery
proceedings.
 Drilldown dashboards are available for the FAO's
 AO can now Upload more than 50 Demands at once using Bulk Upload functionality
 Buyer of immovable
property can download Form 16B
after registering
RECENT
COMMUNICATION
FROM
CPCon TRACES as
Tax Payer
 TDS is now applicable on sale of immoveable property
 In case of short deduction due to PAN error, demand will be reduced after processing the
correction statement, only if the new PAN is Valid and difference between new and old
PAN is not more than two alphabates and two numerals.
 For any type of correction in challan, Jurisdictional Assessing Officer can raise a ticket.
Please do not send any assessee to CPC
 Levy u/s 234E of the Income Tax Act, 1961 is a statutory levy and cannot be waived off.
Do not send any communication in this regard

In order to close the demand, please advise deductors to file correction statement after
paying the demand through challan
 Challans for FY 2011-12 available for force matching with statements of FY 2011-12.
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COMMON ISSUES PERTAINING TO TRACES FACED BY
DEDUCTORS
Rejection of correction statements
 Refund
 197 certificate verification
 Demand pertaining to interest
 Correction statements pertaining to paper statements
of F.Y. 07-08
 Cancellation of statement facility
 Cancellation of TAN facility
 Problems relating to 16B
 Problem in downloading conso file
 Intimation u/s 200A issues

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REJECTION OF CORRECTION STATEMENTS
Probable Reasons for
rejection
Solution
Sequence of challan / salary/
deductee detail record being
added
in
a
correction
statement
is
not
in
continuation of the last
sequence number for the said
record
in
the
original
statement.
Add
deductee
row
in
sequence to the preceding
row in the conso file followed
by filing of the corrected
statement
Deductor may have changed Deductor should not make
the field which are not any changes in non updatable
updatable fields by Mistake
fields
Deductor has not used latest Use the latest conso file
conso file for filling correction
statement
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Probable Reasons for rejection
Solution
Valid to Valid PAN correction can
be done only Once. The statement
is rejected, since Deductor has
already filed one Valid to Valid PAN
correction before the present
correction statement.
Check the PAN from PAN
verification at TRACES
portal before making the
PAN correction
If deductor submit a correction
statement to update existing
matched / partially matched challan
with updates on one or more of
fields other than the following.
a) Interest,
b)Others and
c)Section Code.
Change in any other field will lead
to rejection of the correction
statement.
Deductor should not make
any changes in any field of
BOOKED Challan except
Interest,Others & Section
Code
32
REJECTION OF CORRECTION STATEMENTS
Probable Reasons for
rejection
Solution
Total Challan Amount is Deductor should not quote
less than the sum of TDS + the amount more than the
Interest + Others Amount available balance in the
correction statement.
33
OLTAS CHALLAN CORRECTION VIA BANK/ AO
Problems faced by
the deductors
Challan not getting
corrected in a
reasonable period of
time
Reasons and Solution
Issue taken up with CPC
34
REFUND THROUGH DEDUCTOR PORTAL
New functionality
Claim of refund in case
of excess payments
through the deductor
portal of TRACES
(Digital signature
required)
Utility
Deductor can apply for
refund online
No direct interface with
field AO
The refund will be issued
by TDS CPC only fter
making certain
verifications from field
AO
Field AO- CPC TDS
interface yet to be
established in this regard
35
197 CERTIFICATE VERIFICATION
New functionality
Utility
Deductor can verify the
details/ validity of the
low deduction certificate
u/s 197 of the Act before
filing the statement by
the deductor portal of
the TRACES
Short deduction demand
pertaining to low
deduction certificate can
be resolved by using this
functionality
36
DEMAND PERTAINING TO INTEREST
Problem
Solution
• Deductor gets short
deduction notices for
default in interest
payment. Payment made,
correction statement
filed, but still get a short
deduction notice.
The amount of interest
mentioned in the notice/
intimation is provisional
(as on the date of
processsing).The
deductor needs to
recompute interest at
the time of making
payment/ filing statement
for correct compliance.
37
DEMAND PERTAINING TO INTEREST
Problem
Solution
• Deductor gets short
deduction notices for
default in interest
payment. Deductor
complaints that though
interest has been
computed correctly, he/
she is getting notice/
intimation.
The period for
computing interest
should be calculated
from the date of tax
dedution till payment
made (and not from the
due date of payment).
E.g., if TDS is deducted
on 30th Nov and paid on
9th Dec, interest has to
be paid for two months.
38
DEMAND PERTAINING TO PAN STATUS
Problem
Reason/ Solution
• Deductor gets short
The deductee is not an
deduction notice with
Individual or HUF.
justification that the
deduction u/s 194C has
been done @1%, instead
of @2%.
39
CORRECTION STATEMENTS PERTAINING TO
PAPER STATEMENTS OF F.Y. 2007-08
Problem
Reason/ Solution
• Deductor is not able to
file correction
statements pertaining to
paper statements
pertaining to F.Y. 2007-08
The correction
statement can be filed in
paper format only as
new statement after
cancelling the original
statement.
40
CANCELLATION OF STATEMENTS FACILITY
Problem
Reason/ Solution
• A deductor while filing a
statement quotes wrong
TAN. The deductor whose
TAN was quoted is not
able to file the statement as
the system reads “original
statement already filed”.
The deductor cannot even
file the correction
statement in absence of
data. Hence, justification for
“cancellation of statement”
facility.
The cancellation of
statement functionality was
withdrawn few years back
because of its misuse. The
issue is being taken up with
CPC TDS.
41
CANCELLATION OF TAN FACILITY
Problem
Reason/ Solution
• A deductor stops using a
TAN and wants to cancel it
as it keeps on getting “non
filer notices” from the
department.
The TAN can be made
inactive through ITD
system.
The TAN cannot be
cancelled because the
deductor’s statements can
be scrutinised till six years.
Any default detected later
may create complications.
42
PROBLEMS RELATING TO 16B
Problem
Reason/ Solution
• Seller not getting the
credit (zero credit) in form
16B.
The Deductor (Buyer) should
fill the amount of tax in 'TDS
Amount to be Paid' field and
not in 'Interest' or 'Fee' field.
Else, the seller will not get the
credit of such tax
43
PROBLEM IN DOWNLOADING CONSO FILE
Problem
Reason/ Solution
No alternative remedy as per
• Deductor is not having
the mandatory detail of at law as of now.
least one Challan and three
PANs, in order to
download conso file
44
Intimations u/s 200A-Issues
Issue
Advisory
Paid the demand raised for late payment
fee u/s 234E
File a correction statement after adding
the payment challan w/o any deductee
rows.
Requested for the waiver of Fee levied u/s Cannot be waived off as it is a statutory
234E
levy
Wrong TAN in OLTAS challan leading to
Short Payment.
Jurisdictional AO to raise request for
challan correction through AO Portal
Paid the demand raised in the intimation
u/s 200A
File correction statement for closing
defaults.
Details of the defaults not appearing in
the intimation u/s 200A
Download a Justification Report from the
TRACES website.
Short deduction default in a 197
certificate case or transporter case
Verify relevant flags in the statement
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How to avoid Defaults in TDS Statements?
46
Late Payment:
DO’S
1. Tax should be deposited within seven days from the end of the month in which the deduction is
made or income-tax is due, where tax is paid accompanied by an income- tax challan .
2. Date of Deduction and Date of payment should be correctly filled.
3. Book Entry Flag should be raised according to type of Deductor.
DONT’S
1. Date of deduction should not be Null
2. Date of Payment/credit should not be Null.
3. Date of Deduction should not be before the date of payment /credit.
4. No Book Entry allowed for Non-Govt. Deductor.
47
Late Filing:
DO’S
1. Quarterly Statement should be filed within due date prescribed by
Income Tax under rule 31 A.
2. Select correct deductor type category while filing statement.
DONT’S
1. Don’t delay in filing regular statement.
2. Don’t select wrong deductor type category while filing statement.
48
Short Deduction:
DO’S
1. Deducts TDS according to section rate prescribed in Income Tax Act.
2. Quote valid PAN while filing statement.
3. Appropriate flag should be raised as given below:
A-Lower/No Deduction for Certificate
B-Higher Deduction where PAN is not available.
C-Higher Deduction where PAN is not available
T-No Deduction for Transporters having PAN
Y- No deduction due to payment below threshold limit.
4. Quote Certificate No. issued by ITD for relevant TAN –PAN Combination,
F.Y, Quarter and periodicity.
5. Proper slab rate should be use according to deductee type for calculation of
income tax in case of salary.
6. Certificate no. should be of 10 digits with alpha numeric structure.
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Short Deduction:
DONT’S
1. Don’t deduct with wrong section rate.
2. Don’t quote invalid PAN in statement..
3. Don’t Raise Flag A for PAN which do not have 197 certificate.
4. Don’t mentioned incomplete certificate number.
5. Don’t use expired certificate.
6. Don’t use wrong Income Tax Slab.
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Short Payment:
DO’S
1. Deducted/Collected amount should be equal to deposited amount.
2. Oltas Available Balance should be equal or more than deducted /collected
amount.
3. Oltas challan should be matched with statement Challan after applying
matching rules.
4. Govt. Deductor needs to raise Book Entry Flag “Y” in case of BIN.
DONT’S
2. Available Oltas Balance should not be less than deducted/collected
amount.
3. Challan details as per statement should not mismatch with Oltas Challan
Details after applying matching rules.
4. Don’t raise wrong book entry flag in statement .
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