How to resolve Inconsistencies in TDS/TCS Statements through Correction Statements

Many a times we faced the issues regarding inconsistencies in TDS or TCS returns. And at that time people got confused as to how to handle these situations or how to avoid such mistakes. Hence today I am writing this article hoping that it will solve your doubt regarding inconsistency in TDS or TCS returns.

The following explains the various possible problems in your TDS/TCS return, how to rectify them and how such inconsistencies can be avoided in future.

How are the inconsistencies identified?

When you file your TDS/TCS return, first the details regarding deposit of TDS/TCS made by you is compared with the data given by banks. The data is uploaded by banks on the basis of the TDS/TCS challans received by them.For this purpose, the Challan Identification Number (CIN), TAN and TDS amount as given in your TDS/TCS return is compared with the corresponding details given in the challan details provided by the bank that has accepted the tax. (CIN consists of the BSR code of the branch where you deposited the tax, date on which you deposited tax and the challan serial number which have been stamped on the counter foil of the challan given to you.)

Once these are matched, the PAN ledger of each deductee is credited with the TDS/TCS as provided in your return provided the PANs of the deductees have been given by you in the return.

What are the kinds of inconsistency status provided in the inconsistency letter?

• Matched : If all the CIN details in the TDS/TCS return match with the corresponding details provided by the banks, the challan is shown as matched as the payment claimed to have been made by you is also validated by the bank
• Match Failed : In this case CIN given in your TDS/ TCS return is found in the bank data. But the TAN and / or amount as given in your return against this CIN do not match with the TAN and / or amount given against this challan by the bank.
• Match Pending : In this case, the CIN as given in your statement is not available in the CIN details provided by the banks.
• Count of Missing deductee PAN : If you have not provided the PAN details of some of your deductees, the count of such cases is provided.
• Count if deductee PAN not present in ITD database : If some of the deductee PAN provided by you are not present in Income Tax Department (ITD) database, the count of such cases is provided.

What could be the possible impact of these inconsistencies?

• In case of inconsistency, there would be no posting in the PAN ledger of the deductee with the amount of tax deducted/tax collected on his behalf. He may, therefore, have difficulty in proving the TDS /TCS claimed by him in his income tax return
• If challans claimed in the TDS/TCS returns could not be matched completely with the data given by the banks, you may have difficulty in proving to your TDS assessing officer that you have actually deposited the TDS/TCS deducted by you.

How can I get more details with respect to inconsistencies in my TDS return?

You can access TRACES website. Click on the link “Statement Status” and then provide your TAN and the Provisional Receipt Number (PRN) of the return to get more details about your returns.

In case of match pending cases, compare the CIN as shown in the Quarterly Status Statement (what you have provided in the return) with the CIN as given in Challan Status Inquiry (CIN as given by the banks) to identify the mistake.

How can I rectify these inconsistencies?

• If you have made any mistakes in your TDS/TCS returns you can rectify them by filing a correction statement. Procedure for preparation and filing of return is available in TRACES website.
• If bank has made any mistake in the amount or name or major head code given by them against your CIN, they can rectify them
• If the bank has made any mistake in TAN or CIN you will have to contact your TDS Assessing Officers
• If bank has not uploaded your challan, then you may request the bank to upload the same.

You can verify the details provided by the banks by using the “Challan Status Inquiry” facility available in TIN web-site

How can I prevent these inconsistencies in my future return?

• You should use the same TAN to deposit tax in the bank and to prepare the TDS/TCS statement.
• In case you have multiple TANs, only one TAN should be used consistently, the other TAN(s) should be surrendered to ITD.
• The deductor details, i.e. TAN, name, address of deductor should be correctly stated in the statement filed.
• Challan details (BSR code- 7 digits, challan serial number – upto 5 digits, date of tender) mentioned in the statement should be same as those stamped by the bank on the challan counterfoil.
  (Verify the challan details from TIN website ( www.tin-nsdl.com ) before filing the statement to prevent errors)
• The challan amount mentioned in the statement should same as the total amount deposited in the bank.
• Valid 10-digit PAN of deductee should be provided.

Disclaimer: The contents of this article are for information purposes only and does not constitute advice or a legal opinion and are personal views of the author. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer to relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc before acting on the basis of the above write up.  The possibility of other views on the subject matter cannot be ruled out. By the use of the said information, you agree that Author / TaxGuru is not responsible or liable in any manner for the authenticity, accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof. This is not any kind of advertisement or solicitation of work by a professional.

(Republished with Amendments by Team Taxguru)