Deductees reported in TDS Statements with structurally Valid, but actually Invalid PANs, impact and action required

Centralized Processing Cell (TDS) has observed from its records that you have reported deductees with invalid PANs in your quarterly TDS statements.  

 

These PANs appear structurally valid, however, they are actually invalid, as they are not available in the PAN Master records.

For example, ARUPS4625S appears to be a valid PAN according to the alphabets and numerals in its structure, however, this is an invalid PAN, as this is not available in PAN Master.

What is the impact :

• The impact of such errors is significant in nature, in view of following :
  • As per section 206AA, the tax is to be deducted at a higher rate, in case of reporting of invalid PANs. Therefore, Short Deduction is charged even if the tax has been deducted at the Section Rate, due to the applicability of section 206AA.
  • The deductor will not be able to generate TDS Certificates for their deductees with invalid PANs.
  • The taxpayer will not be able to avail correct TDS Credits

What actions to be taken :

• The impact of such errors is significant in nature, in view of following :
  • PAN Verification facility on TRACES can be used for verifying the deductees. You are requested to Login to TRACES and
    navigate to "Dashboard" to locate "PAN Verification" in the Quick Links menu.
  • You can also use "Consolidated TAN - PAN File" that includes all the valid PANs attached with the respective TANs. To
    avail the facility, Login to TRACES and navigate to "Dashboard" to locate "Consolidated TAN - PAN File".
  • To correct an invalid PAN reported earlier, a C5 Correction Statement is required to be filed.
  • The PANs can also be corrected using our Online Correction facility
    with Digital Signatures. To avail the facility, you are requested to Login to TRACES and navigate to "Defaults" tab to locate "Request for Correction" from the drop-down menu. For any assistance, please refer to the e-tutorial available on TRACES.

You can reach out to us on ContactUs@tdscpc.gov.in or call our toll-free number 1800 103 0344.

CPC (TDS) is committed to provide best possible services to you.

CPC (TDS) TEAM

Quick updates

1. ICAI Members are required to submit a Self-Declaration form for the year 2013, before 31st May 2014, to avail the CPE Hours Credit for the unstructured learning activities undergone by them.

2. Download Form 16(Part A), 16A & 27D  of Q4  from TRACES & issue by 30 May(Form 16 & 12BA by 31 May). Dept can track it & levy penalty of Rs. 100 per day.

Delay in Download of TDS Certificate attracts Penalty

Delay in Download of TDS Certificate attracts Penalty

If as per the records of Centralized Processing Cell (TDS), if the TDS Statements have been filed by you for different quarters and if you have not yet downloaded TDS Certificates (Forms 16/ 16A) from the portal; please refer to the following provisions of the Income Tax Act, 1961 which are related to download of TDS certificate in time and consequence of late download of Certificate from the website http://www.tdscpc.gov.in (hereinafter called TRACES Portal).

 

Downloading of TDS Certificates from TRACES made mandatory: 

 

In this regard, your attention is invited to the CBDT circulars 04/2013 dated 17.04.2013, CBDT Circular No. 03/2011 dated 13-5-2011 and CBDT Circular No. 01/2012 dated 9-4-2012 on the Issuance of certificate for Tax Deducted at Source in Form 16/16A as per IT Rules 1962. It is now mandatory for all deductors to issue TDS certificates after generating and downloading the same from “TDS Reconciliation Analysis and Correction Enabling System” or TRACES Portal.

 

TDS Certificates downloaded only from TRACES hold valid: 

 

In view of above circulars, it may kindly be noted that the TDS Certificates downloaded only from TRACES Portal will be valid. Certificates issued in any other form or manner will not comply to the requirements referred in the Income-tax Act 1961 read with relevant Rules and Circulars issued in this behalf from time to time.

 

Due Date for downloading and Penalty for non-compliance: 

 

Please be advised that under the provisions of section 203 of the Income Tax Act, 1961 read with rule 31A, Certificate of tax deducted at source is to be furnished within fifteen (15) days from the due date for furnishing the statement of tax deducted at source. Failure to comply with the provisions of the Act will attract penalty under the provisions of section 272A of the Act, a sum of one hundred rupees for every day during which the failure continues.

 

Assistance for downloading TDS Certificates from TRACES: You can logon to portal http://www.tdscpc.gov.in and refer to our e-Tutorial https://www.tdscpc.gov.in/en/download-form16a-etutorial.html to download TDS Certificates. For any further assistance, you can also write to ContactUs@tdscpc.gov.in or call toll-free number 1800 103 0344.