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

TDSCPC warns against raising incorrect Flags in TCS Returns

CPC(TDS) Communication : Flag raised for 15G/H despite Income exceeding the amount of exemption 

 

Dear Deductor ( TAN XXXXXXXXXX ),

CPC(TDS) feels glad to provide you with the new feature of downloading Form 27D, the Tax Collection Certificate for Deductees forming part of TCS Statements, filed in the form of 27EQ.

Centralized Processing Cell (TDS) has observed from its records that Flag "B" (for 15G/H Forms) has been wrongly raised in the quarterly TDS Statements as per the provisions of section 197A(1B) of the Income Tax Act, 1961. Following are the provisions of section 197A(1B) for your ready reference:

"The provisions of this section shall not apply where the amount of any income of the nature referred to in sub-section (1) or sub-section (1A), as the case may be, or the aggregate of the amounts of such incomes credited or paid or likely to be credited or paid during the previous year in which such income is to be included exceeds the maximum amount which is not chargeable to income-tax".

What is Form 15G/ H and its relevance :

• Under section 197A of the Income Tax Act 1961, Form 15G / H is a self-declaration, which is provided by a person resident in India (not being a Company or Firm) to their deductor that the tax on his estimated total income of the previous year, in which such income is to be included in computing his total income, will be NIL.
• The Declaration is made in the following Forms :
  • Form 15H - For Senior Citizens
  • Form 15G - For other than Senior Citizens

Consequences, if deductor wrongly raises Flag "B" for Forms 15G/H :

• If the deductor raises Flag "B" for non-deduction of tax, despite the total payments made by him exceeding the taxable amount, this results into incorrect reporting in the TDS Statements.
• Your attention is invited to provisions of section 201 of the Act, which reads as follows :
  • Where any person who is required to deduct any sum, does not deduct or does not Pay or after deduction, fails to pay,
    the whole or any part of the tax, then such person shall be deemed to be an assessee in default in respect of such
    tax.
• Under section 277 of the Act, if a person makes a statement in any verification under this Act or under any rule made thereunder, or delivers an account or statement which is false, and which he either knows or believes to be false, or does not believe to be true is punishable.

This may be noted that obligation to report each transaction correctly in the TDS statements, falls on the deductor and non-compliance amounts to incorrect verification of correctness of TDS statement.

 

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
 

Non-FIling of TDS Returns for NIL TDS Cases

Declaration for Non Filing:

• Declaration for Non-Filing of a statement has been enabled on TRACES
• Deductors can declare a statement for Non-Filing by selecting Declaration for Non-Filing of a statement from Defaults menu

Traces website has started a new facility to update declaration for Non filing of TDS statement for deductor. Deductors can update status of TDS/TCS statement to non-filing online after login at TDSCPC website.The benefit of this facility is that you need not file NIL tds/tcs return for a particular quarter/period.Just update your status to non filing of return and stay relax.After updating of status ,TDS CPC website server will not sent you notice for non filing of tds return.