Many times after filing of TDS return, Assessee received intimation from TDS CPC for short payment of TDS or in other case, when we try to put conso file request on TRACES, system is showing us the pop up message for short payment of TDS. In such case, many of us got confused as how to solved this problem. Hence, todays article is mainly focus on how to resolved issue of Short Payment of TDS.

Route Cause Analysis of Short Payment of TDS:

Route of the Issue:

  • Data entry mistakes are committed, while reporting tax payments in the respective TDS statements.
  • Mistake in Challan such as interest Is not considered
  • Actually, paid less due to some miscalculations of TDS on transactions

Cause due to above mistakes:

  • Received Intimation from TDS CPC for short Payment
  • Non processing of Conso file request

Solutions for Short Payment of TDS:

There are two options to solve this issue:

1. Through Conso file Request on TRACES:

To make the resolution process non-intrusive, CPC (TDS) proposes a new change while submitting request for download of the Consolidated (Conso) file for a particular quarter. If there is a “Short Payment defaults” on account of unmatched challans for the relevant quarter, the deductor would be provided with online view of all available unconsumed challans, which can be tagged with deductees, to close the above default.

Following are key information to be noted in this regard:

  • CPC(TDS) mandates to close the above default by tagging unconsumed challans, if available in CPC(TDS) system, through online correction (without digital signature).
  • 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.
  • The Online Correction facility of TRACES needs to be used for closure of the Short Payment default.
  • The user will not be able to download Conso file for the relevant TDS statement on closure of the above default.
  • Once the challan is suitably tagged, CPC(TDS) shall suo moto reprocess the cases thereby reducing the Short Payment default by equivalent amount.

What Actions to be taken:

  • During submission of request for Conso File, a message will be displayed, if there are Short Payment defaults in the TDS statement and instructions will be provided to submit Online Correction.
  • Details of defaults will be provided during Online Correction process.
  • In case of insufficient challans, please use Challan ITNS 281 to pay the demand or use any other Challan, which has adequate balance available.
  • Submit an Online Correction using the functionality on TRACES to tag the challans with deductee rows. Login to TRACES and navigate to “Defaults” tab to locate “Request for Correction” from the drop-down list.

Online Challan Corrections:

  • A list of all Matched and Unmatched challans can be viewed by clicking the appropriate tab.
  • Unmatched challans can be corrected and tagged to Deductee rows in the statement.
  • The corrections in TDS statements can be raised even without Digital Signature.
  • Correct KYC information needs to be submitted for the purpose of validation.
  • All previous corrections pertaining to the statement should have been processed and the processing status can be verified from the Dashboard.

2. Direct Request for Correction:

1. Use Challan ITNS 281 to pay the demand with your relevant Banker, if there are no challans available for consumption. Please wait for 2/3 days for the challan to be updated with TRACES.

2. Please download the Justification Report from our portal TRACES to view your latest outstanding demand.

3. Please use the Online Corrections facility on TRACES to submit corrections, to payoff/ close the demand.

4. To avail the facility, please Login to TRACES and navigate to Defaults tab to locate Request for Correction from the drop-down list. You can refer to our e-tutorials for necessary help.

5. In case of Short Payment Defaults due to Unmatched Challans, please use Tag Unmatched Challan facility using Online Corrections.

6. In case of Short Payment Defaults due to Insufficient Challans, please use Move Deductee facility using Online Corrections. With use of this feature, a portion of the Deductee Rows can now be moved to any other Unconsumed OLTAS challan with adequate balance.

(Republished with Amendments by Team Taxguru)

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  1. K Ramegowda says:

    I received a short deduction Notice from Traces after three years I e, for the financial year 2014-15, Now I received short deduction notice for deducting Less TDS on salary. But my employees have already filed their Income Tax Returns by paying difference amount by Self Assessment Tax challans. Is it I need to deduct TDS again in this year and submit the revised TDS returns for the financial year 14-15. If so is it Individual Assessee will get credit of the TDS amount ? Than how to replay for this Notice ?

  2. Sachin Zade says:

    Sir, short deduction is by employer. Employee paid through chalan as self assessment tax. How it can be corrected in DDO/ deductor/ employer’s account? How to settle this?

  3. Gurappa kamble says:

    Pls close my tax saving fixed deposit account kindly help me sr i am using your apa in tax saving fixed deposit 28500 pls close my fixed deposit account sr

  4. ganesh chandra says:

    short payment have been occured due to wrong calculation of tax, can it be rectified online by adding challan or downloading conso file for revision of TDS return ,pl suggest

  5. PRAVIN SACHLA says:

    Dear Sir

    Please note that TDSCPC should give option on payment portal to pay tds default for perticular quarter and paid by this form it should directly tag and close default.

    Thanking you

  6. P Aravindhan says:

    TRACES was established during 2012 but pressure is now being put on deductors for rectification of short payment defaults from FY2007-2008.

    Rectification procedure has now only become efficient, effective and user friendly. Even TDS assessing Officers have gained knowledge about rectification only during last six months. Only after TRACES was formed default notices are served properly, assistance by way of Help Desk is given. Hence it is unfair on the part of the Govt to insist that all short payment defaults from FY2007-08 should be rectified by deductors otherwise they can not issue Form 16A to the deductees for FY2014-15.

    Traces /CBDT may kindly consider enforcing this restriction on issue of Form 16A, only from FY2013-14 i.e if there are short deduction defaults in FYs 2014-14 and 2014-15 deductee should not be allowed to issue Form 16A.

    If this is not done, many deductees in particular Public Sector Bank depositors, may not be able to get Form 16A for FY2014-15.

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May 2022