CA Sandeep Kanoi
Nowadays CPC (TDS) sent notices to deductors for every return filed by the Assessee for one or other reason. One of the reason for the same is Short Payment of TDS. 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 Act read with Rule 119A, apart from intimation of other recovery proceedings as per Income Tax Act, 1961.
In respect of short deduction deductors are governed by the provisions of Section 200(1) of the Income tax Act,1961.
Duty of Person deducting Tax (Section 200(1) of Income Tax Act)
- Any person deducting any sum in accordance with [the foregoing provisions of this Chapter] shall pay within the prescribed time, the sum so deducted to the credit of the Central Government or as the Board directs.
- Any person being an employer, referred to in sub-section (1A) of section 192 shall pay, within the prescribed time, the tax to the credit of the Central Government or as the Board directs.
- Any person deducting any sum on or after the 1st day of April, 2005 in accordance with the foregoing provisions of this Chapter or, as the case may be, any person being an employer referred to in sub-section (1A) of section 192 shall, after paying the tax deducted to the credit of the Central Government within the prescribed time,[prepare such statements for such period as may be prescribed] and deliver or cause to be delivered to the prescribed income-tax authority or the person authorized by such authority such statement in such form and verified in such manner and setting forth such particulars and within such time as may be prescribed.]
You should pay the outstanding demand at an early date to avoid Penal Interest u/s 220(2) of the Act apart from initiation of other recovery proceedings as per Income Tax Act, 1961. If the demand has already been paid, you should 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:
- Download the Justification Report from TRACES portal 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
(Compiled by CA Sandeep Kanoi)