Wednesday, 14 May 2014

BE aware @ 20% TDS Deduct even PAN No. is Correct in Statement.

Friends,


Approx one or more months back, I was in view that there is any lapse in the software of Income Tax department that they have charged 20% TDS on having correct Pan Numbers. No doubt that the correct PAN's were updated through correction statements by deductor. In the first attempt there was error in PAN's. I had contacted customer care of TRACES but no satisfactory reply was received. Generally, they told that send screen shoots of the error images along with active pan images etc. Now again as I had asked them/TRACES for the reason of charging of 20% on correct PAN , they have given below reply which is very serious for deductors :-

Reply received from TRACES is given as under :-

Dear Sir/Ma'am,

Thank you for contacting us, it is our pleasure to assist you.

Your query related to PAN error default is acknowledged.

It is to inform you that the provisions of section 206AA apply at the time of tax deduction, which happens prior to the filing of statement. Thus, the deductor is expected to have a Valid PAN at the time of deduction. Only a typographical error is expected at the time of filing the TDS statement.

The demand in the hands of the deductors is being rectified in cases where the difference between the Invalid PAN and the Valid PAN is not more than 2 characters. This is being done in order to take care of the genuine typographical errors in data entry.

The rectification of demand in other cases is not done if the mismatch is more than two alpha characters & two numerics. Therefore, out of 10 characters in case of structurally valid PAN, 4 characters are being considered for rectification of demand.

Note : Please note that online Facility for PAN and Challan correction in TDS statements is now available at TRACES (www.tdscpc.gov.in). Please refer to the e-tutorials for necessary details.

Regards,
Team TDS CPC


Keeping in view of the above details , deductors are required to take care in submission of PAN in TDS return. There are too many limitations for correction in PAN through correction statements by Income Tax Department.

No comments:

Can GST Under RCM Not Charged and Paid from FY 2017-18 to October 2024 be Settled in FY 2024-25?

 In a recent and significant update to GST regulations, registered persons in India can now clear unpaid Reverse Charge Mechanism (RCM) liab...