Many deductor submit Invalid / Not Available PANs in the Quarterly TDS Statements filed by them. We have listed below the Implications of reporting Invalid/ Not Available PANs in TDS Statements and actions to be taken by deductors to avoid such mistakes in TDS returns/ Correct statement to be filed by them.
Implications of reporting Invalid/ Not Available PANs in TDS Statements :
- The Deductor will not be able to provide TDS certificate to the deductee, if valid PANs are not reported.
- The correct deductee will not be able to avail the credit of TDS deducted for taxes deducted.
- Under section 277 of the Income Tax Act, 1961, if a person makes a statement in any verification under this Act or under any rule made there under, or delivers an account or statement which is false, and which he either knows or believes to be false, or does not believe to be true, is punishable.
Actions to be taken :
- Please note that Correct reporting at the first instance will help in avoiding submitting Correction Statements.
- In case of any errors observed in reporting, the Corrections must be reported at the earliest to avoid unwarranted delays.
- The Deductor must ensure that the PANs for deductees reported in TDS Statements are valid and correct. TAN-PAN Master can be downloaded from TRACES and should be used to file statements to avoid quoting of incorrect PANs.
- Please Login to TRACES and navigate to “Dashboard”to locate “PAN Verification” in the Quick Links menu. The functionality to download Consolidated TAN – PAN File has also been provided that includes all the PANs attached with the respective TANs.
They have to take care to see that interest income is less than 10k in each bank, so that there is no need to give PAN or to pay 20% tax. To claim the refund, one has to have PAN.
What if 20% has been deducted,party has no PAN(States his income is below
taxable limits) and the work done is only a one time affair?