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Short Deduction Notice

15 August 2023

I deducted 1% TDS of seller Deposited dt 02-07-2023, however I was not aware of government's deadline to link PAN with Aadhaar. I received short deduction notice and as I enquired last month on Income Tax Site ,The PAN of Seller was linked with her Aadhaar (may be seller linked Pan with Aadhaar after 2nd of July 2023) , We had also made submission for a correction request dt 01-08-2023, but the issue is not resolved yet. Can someone please guide?

Thank You in advance,

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72 Replies

sumanth rao (19 Points)
Replied 17 August 2023

Even I am facing the same challenge.

Post loan disbursement and settlement with the seller I got the notice from IT saying that short deduct, after checking the justification report found that the seller PAN is inoperative.

I have made it operative and linked with aadhar and submitted the correction form. Still facing same problem.

Can anyone let me know the solution for such issue.

Gaurav Semwal (15 Points)
Replied 18 August 2023

Please let me know if the issue gets resolved

sumanth rao (19 Points)
Replied 18 August 2023

Not yet resolved. If you find any solution please let me know.

Gaurav Semwal (15 Points)
Replied 04 September 2023

Brother, Did you get any solution?

sumanth rao (19 Points)
Replied 04 September 2023

Not Yet, Do you got any solution and what are the options to have a solution for such issue.

Anil Goyal (43 Points)
Replied 20 September 2023

Same with me. I deducted 1% TDS for property transaction and received notice next day for short deduction. Found that buyer's PAN is not linked.

Any solution for this issue? It is a huge amount. Deducted Rs. 70,000 (1%), demand is for 14 lakhs (20%).

Gaurav Semwal (15 Points)
Replied 24 September 2023

The reply I received,

Based on comments received from the verticals of Systems and duly endorsed by the DG (Systems) that
The complainant in his grievance has stated that in the instant case demand is determined at TRACES even after making corrections in the 26QB statement.
In this regard, it is submitted that as per latest data available at TRACES demand of Rs.xxxxxxx- and interest thereon is generated in respect of Form 26QB against the ack no- AK11111111. The said demand has been generated at TRACES as PAN of the seller “AAAAA1111A” was inoperative on 1-July-2023 i.e., on the date of transaction, hence, the demand generated at TRACES is correct. As the demand is correct, therefore, buyer of the property needs to pay the demand to close the outstanding demand.
In view of the above, the grievance may be treated as settled.
In view of above the instant CPGRAM is closed.

Gaurav Semwal (15 Points)
Replied 24 September 2023

Please somebody help?

Anil Goyal (43 Points)
Replied 27 September 2023

This is not fair. When I was filling the form on TRACES site, it auto calculated the TDS at 1%. The system should have warned about in-operative PAN and should have calculated at 20%. I checked today and it is still calculating at 1% (the PAN is still in-operative) and there is no option of changing the TDS amount or percentage. This is a system limitation / fault.

Can someone please also confirm that the seller will be able to claim this higher TDS amount after he makes the PAN operative again? I read somewhere that the TDS deducted during the period when PAN is inoperative will not be credited and thus not refunded.

Can someone please confirm if this is true?

sumanth rao (19 Points)
Replied 28 September 2023

Even we are struggling for the same. Ideally if the PAN is in-operative system should either restrict us to not pay the tax or it should by default calculate 20%, Basis the alert atleast we would have taken decision and pay the TDS accordingly.

1% and 20% of the property value(50L) is too high and as I chosen Home loan now how can I pay the 19% TDS, If that amount was there with me then I would have choose less home loan.

Can someone help us how to get out from this issue.

Anil Goyal (43 Points)
Replied 06 October 2023

@ Bobby, wanted to write something on this issue?

Anil Goyal (43 Points)
Replied 06 October 2023

@ Bobby, wanted to write something on this issue?

@ Gaurav, so what you have done so far? Filed the return with the short deduction amount? Or, you have not yet filed the TDS return? TDS return should be files within 1 months (or, by the end of next month of TDS). I am wondering what to do.