The non-government deductors majorly comprise of non-corporate sector which is not very organized. Approximately less than 6000 assessees are listed companies who take the help of professionals to file statements of TDS/TCS in time. Approximately, 6,60,000 assessees are private limited Companies, but majority of them are family organizations or organizations among the friends registered as Private Limited companies under Companies Act. Further, last year there were approximately 18,00,000 tax audit assessees.

This clearly reflects that more than 66% of the assessees who are liable to deduct TDS are non-corporate entities comprising of Individuals, HUFs, firms etc. In addition to above, certain non corporate and NGOs are also mandatorily liable to deduct TDS.

The data entry in the non-corporate sector is majorly done by persons who are not even graduates. This has infact lead to the problem of huge mismatch of data of the deductees. There are clerical errors like wrong punching of name details, PAN details, Section under which data is punched and the like.


In continuation of the above suggestion, the following is suggested :

To avoid such data mismatch, it is necessary to have a PAN/TAN master file for each and every deductor. CPC(TDS) may prepare a software freely downloadable for all deductors wherein deductor may fill in the details like name, PAN and the applicable section/s for deduction (it may be one section or more than one).This temporary master file may then be uploaded back. The CPC(TDS) may verify the details so submitted and provide the deductor with error details, if any. The deductor may then rectify the errors and resubmit it. The process goes on unless the Department agrees with the data provided by the deductor. The final data so generated may be stored as a master file for that deductor in the database of the Department. The deductor while making payment every month through e-challan will click on the section for which payment is to be made. Once a particular section is clicked, all the parties registered under that section will appear.

The deductor may accordingly, fill the details of amount and submit the same along with the payment of taxes. The deductees for which no tax has been deducted may be reflected/prefilled as “0”. This will on one hand enable the deductor to save time on rechecking his details at the time of quarterly filing of TDS returns and on the other hand provide monthly credit details in the Form 26AS of the deductee. Since the data will be downloaded from TAN/PAN master verified by the Department, there will be “0” mismatch situation, which is the need of the hour.


Source-  ICAI Pre-Budget Memorandum–2018 (Direct Taxes and International Tax)

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June 2021