Tds provisions

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CA Himani (Querist)
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27 December 2014 Whether there is any remedy from 20% short deduction of tds in case of pan error for more than 2 digits in case of salaried employee.

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Guest (Expert)

27 December 2014 Hope this would be helpful

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. Regards, Team TDS CPC - See more at: http://taxguru.in/income-tax/rectification-tds-statement-pan-error-2-characters.html#sthash.Taw3rYsu.dpuf

CA Himani

CA Himani (Querist)
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27 December 2014 But such demand for 20% tds is arise after correction of tds return for the f.y. 2011-12 on 25th dec 2014. Before correction wrong 10 characteres of PAN was entered in tds return but no such demand arise.
why only after correction demand arised, is there any remedy against levy of such penalty.