Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) are vital components of the Indian tax system. They ensure that the government collects taxes at the source, preventing tax evasion. However, discrepancies in the proper crediting of TDS/TCS in Form 26AS, also known as the Annual Tax Credit Statement, can be a cause for concern. In this article, we will explore the possible reasons behind TDS/TCS credit issues and how to rectify them.
Worried About Proper credit of The Income Tax Deducted or Collected
(A) The possible reasons for no credit or the wrong credit of TDS/TCS being displayed in the Form 26AS/Annual Tax Credit Statement:
1. Deductor/Collector has not filed the TDS/TCS statement;
2. The PAN has not been provided to the deductor/ collector;
3. An incorrect PAN has been provided to the deductor/ collector;
4. The deductor/collector has made an error in quoting the PAN in the TDS/TCS statement;
5. The deductor/collector has not quoted the PAN in his TDS/TCS statement;
6. The deductor/collector has mentioned the wrong TDS/TCS amount against the PAN in the TDS/TCS statement.
(B) To rectify these errors:
Do’s for Taxpayers
1. Provide the correct PAN details to the deductor.
2. Request the deductor to file a TDS/TCS statement, if it has not been filed.
3. Request the deductor to file a correction statement, if the PAN is not quoted or an incorrect PAN has been quoted in the already filed TDS/TCS statement.
4. If the wrong amount of TDS/TCS appears in the 26AS/Annual Tax Credit Statement, then request the deductor to file a correction statement and update the correct details.
5. If an entry appearing in Form 26AS which does not pertain to the taxpayer, a grievance for the same may be raised at the TRACES portal at the following path:
Login to the TRACES portal as a taxpayer > Request for Resolution
The e-tutorial for the same is available at the URL https://-contents.tdscpc.govin/docs/e-Tutorial°/020 °/020Taxpay-ert3/020-°/020Request°/020for%20Resolution.pdf
6. View your Annual Tax Credit Statement regularly. The taxpayer can check their tax credit from their e-filing account at incometax.gov.in, TRACES portal account at www.td-scpc.gov.in and internet banking accounts of most of the scheduled banks. Report any shortfall/wrong TDS/TCS credit appearing in Form 26AS/ Annual Tax Credit Statement to the concerned Deductor. Raise online grievances at the TRACES website in case the deductor doesn’t take any corrective action..
7. Please ensure that the true and full income is offered in the Income Tax Returns and remember to file it before the due date prescribed under the Income tax law.
8. Challan applicable for making payment of Advance Tax/Self-Assessment Tax/ Tax on Regular Assessment is ITNS 280. In the challan, the following information needs to be furnished carefully:
i) Head of payment, i.e., Corporation Tax/Income-tax (other than companies).
(0020) Corporation Tax (Companies)
(0021)(Income Tax other than companies)
ii) Type of payment (i.e. Advance tax/Self-assessment tax / Tax on regular assessment / Tax on Dividend / Tax on
distributed Income to Unit holders/Surtax).
(100) Advance Tax
(102)Surtax
(106)Tax on Distributed Profit
(107)Tax on Distributed Income
(110) Secondary Adjustment Tax
(111)Accretion Tax
(300) Self Assessment Tax
(400)Tax on Regular Assessment
(500)Other receipts
iii) Assessment Year.
iv) PAN (Permanent Account Number) allotted by the Income Tax Department.
v) For proof of payment:
a) If challan is paid through the bank:
Receive and preserve taxpayer’s bank-stamped counter- foil of the challan.
Note : Bank’s stamp contains the following details:
BSR (Banker’s Serial Number) code, Date of Deposit, Challan Serial Number.
b) If challan is paid Online:
Preserve a computer-generated copy of the challan.
vi) Online verification of the status of challan is available using functionality “Challan Status Enquiry” at TIN NSDL Website at http://www.tin-nsdl.com where the deposit date of challan is up to 31st March 2023.
vii) Online verification of challan payment status is available using “Know Tax Payment Status” at the Income Tax website at https://www.incometax.gov.in.
Do’s for Deductor
To avoid the grievances of the taxpayers, the deductor must do the following:
- Obtain a copy of the PAN card from the taxpayer rather than relying on PAN details provided in oral/written format.
- Deduct tax as per the provisions of the Income Tax Act, 1961. Deduct at a higher rate as per provisions of Section 206AA of the Income Tax Act, if PAN details are not available to avoid short deduction default.
- Deposit the tax deducted before the specified due date to avoid Interest on Late Payment. Avoid depositing the TDS at the eleventh hour on the due date if possible. Make sure essential details are filled correctly while paying the challan (ITNS 281) such as TAN of the Deductor, Major Head, Minor Head, AY/FY, Amount etc.
- File the TDS statement before the specified due date to avoid Levy of Late Filing Fees and grievances of the taxpay ers because of delayed passing on TDS credit to them.
- Furnish the requisite TDS certificate to the taxpayer before the specified due date to avoid penalties and taxpayer grievances.
- Visit the TRACES website regularly for the latest updates.
- Analyze and resolve defaults/grievances received as a result of the processing of the TDS statement by filing the requisite correction in the statement.
- Keep yourself updated by viewing the advisory mails sent by CPC-TDS on the registered email ID.
- Check the appropriate section under which the TDS has to be affected.
- Quote the TAN properly in all TDS/TCS challans, certificates, Statements, and other correspondences.
- The PAO of Government Departments shall upload Form 24G on or before 15 days from the end of the relevant month and on or before the 30th day of April where the statement relates to the month of March.
- PAO should register AIN on nsdl.com
Furthermore, following are the issues usually reported by the taxpayers. The actions that the Deductors need to take are as follows:
Issue Reported -1:
TDS/TCS Credit not received by the Taxpayer
- File the TDS/TCS statement by reporting due TDS/TCS made against the PAN of the taxpayer, if the statement has not been filed;
- File a correction in the TDS/TCS statement by updating the correct PAN of the taxpayer, if incorrect PAN details have been furnished in the earlier filed statement.
Issue Reported -2:
Less TDS/TCS Credit received by the Taxpayer
- File a correction in the TDS/TCS statement by updating the correct amount paid/credited and TDS/TCS made thereon against the PAN of the deductee.
Issue Reported -3:
Wrong TDS/TCS Credit received by the Taxpayer
- File a correction in the TDS/TCS statement by updating the correct PAN in place of the PAN of the taxpayer if furnished wrongly or by nullifying the amount paid/credited and TDS/TCS reported against the PAN of the taxpayer, as may be applicable.
Further, the deductors and taxpayers can reach out to CPC-TDS on the toll free number -1800 1030344 or mail id – contac-tus@tdscpc.gov.in. For more information on TDS/TCS related processes, please refer to e-tutorials and FAQs available at the TRACES website at the URL- www.tdscpc.gov.in.
