I have received TDS intimation u/s 200A for short deduction due to wrong PAN. For that i failed Revised return with correct PAN.
However, after the revised return again i received intimation for short deduction. though in Justification report shows correct PAN.
I communicate with CPC and they mail me 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.
Regards, Team TDS CPC
Is there any specification in Act or any notification or circular are there for the same??
09 August 2024
It appears that you are dealing with a situation where the PAN used in the TDS return was incorrect, leading to demands for short deduction due to mismatched PAN details. You've made efforts to rectify this by filing a revised TDS return, but you're still facing issues due to the mismatch.
### **Understanding PAN Mismatch in TDS Returns**
1. **Provisions of Section 206AA:** - **Section 206AA** of the Income Tax Act mandates that TDS deductions should be at the higher rate if the PAN provided is invalid or not provided. The section applies at the time of deduction, not just during the filing of the TDS return. - **Validity of PAN**: The PAN must be valid at the time of deduction. If the PAN is incorrect or invalid, the deduction may be treated as short.
2. **Typographical Errors and Valid PAN:** - The Income Tax Department acknowledges typographical errors but expects corrections to be made promptly. Generally, if the mismatch in PAN details is minor (e.g., a few characters are wrong), it may be corrected during the rectification process.
### **Actionable Steps to Resolve the Issue**
1. **Verify PAN Details:** - **Check All Data:** Ensure that the PAN details in the revised TDS return match exactly with the PAN details provided in your records (i.e., the correct PAN).
2. **Justification Report:** - **Recheck Justification Report:** If the justification report shows the correct PAN, make sure that it’s properly reflected in the revised return. Discrepancies should be carefully reviewed.
3. **Rectification of Demand:** - **Criteria for Rectification:** As per the CPC’s response, rectification of demand may be limited to minor typographical errors. If the mismatch exceeds two characters, correction might not be accepted. - **Documentation:** Provide a detailed explanation and documentation to support the correction request. This might include evidence of the actual PAN details, proof of correct deduction, and any relevant communication.
4. **File a Rectification Request:** - **Online Rectification:** File a rectification request online through the [TRACES portal](https://www.tdscpc.gov.in/app/login.xhtml). Ensure that the correction request addresses the exact nature of the PAN mismatch and provides sufficient justification.
5. **Consult Tax Professional:** - **Seek Expert Advice:** If the issue persists and you are unable to resolve it through the usual channels, consult a tax professional or advisor. They can provide guidance based on your specific situation and assist in handling the communication with the authorities.
### **Regulations and Notifications**
1. **Circulars and Notifications:** - **Income Tax Circulars:** The Income Tax Department periodically issues circulars and notifications regarding TDS and PAN issues. Check recent circulars for any specific guidelines related to PAN mismatches and rectification procedures. - **Income Tax Act:** The legal provisions are outlined in the Income Tax Act, and specific rules related to PAN and TDS can be found in the Act and associated rules.
2. **Refer to Latest Guidelines:** - **Income Tax Website:** Review the latest guidelines and FAQs on the [Income Tax Department’s website](https://incometaxindia.gov.in) for any updates or changes in the procedures related to PAN and TDS rectification.
### **Summary**
1. **Ensure Accuracy:** Double-check the PAN details in the TDS return and justification report. 2. **File Rectification:** Use the TRACES portal for rectification if the mismatch is minor. 3. **Seek Professional Help:** Consult a tax advisor for complex issues or if the problem persists.
By following these steps, you should be able to address the PAN mismatch issue and resolve the TDS demand efficiently.
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