The Centralized Processing Cell (TDS) automated for the first time, the Default identification process in respect of TDS statements submitted. CPC (TDS) has  highlighted the need for correct and complete reporting of data in the TDS statements and has therefore, implemented processes to enforce compliance.

With the above functionality made available by TRACES, intimations have been sent to the deductors, wherever applicable, through SMS and e-mail services and through Registered/ Speed Post. Further, TRACES has also provisioned for easy access to this information by way of display in Deductor’s Dashboard and by availability of electronic copies of Justification Reports for the defaults generated with respect to relevant TDS statements.

In view of the close of the month approaching fast, you are advised to pay the outstanding demand at an early date to avoid Penal Interest u/s 220(2)of the Actread with Rule 119A, apart from intimation of other recovery proceedings as per Income Tax Act, 1961. If the demand has already been paid, you are requested to file a Correction Statement by tagging the challan and the Justification report can be verified for closure of demand, if the revision has already been submitted and processed.

How to pay the demand?

The following steps shall help you analyze and pay the demand:

· Download the Justification Report from our portal TRACES to view your latest outstanding demand.
·   Use Challan ITNS 281 to pay the above with your relevant Banker or use any other Challan, which has adequate balance available
·   Download the Conso File from TRACES  portal.
·  Prepare a Correction Statement using version 3.8 of the Return Preparation Utility (RPU) and version 4.1 & 2.137 of the File Validation Utility (FVU)
·  Submit the Correction Statement at TIN Facilitation Centre.
· If the demand is due to mismatch of challan(s), the Online Correction facility on TRACES can be used for tagging the same.


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  1. Siva says:

    Dear Sir,

    We have paid excess TDS, whether the excess TDS paid can be used for payemnt of Penalty instead of claiming for refund? If so, pls give me the relevant procedure to be followed.


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December 2023