TDS DEDUCTED 1% INSTED OF 20%

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A company mistakenly deducted only 1% TDS for an individual with a valid but inoperative PAN, leading to a default notice from the Income Tax Department. They need guidance on paying the difference (19%) and filing a correction statement via TRACES. The process involves paying the shortfall using ITD challan code 400, then editing TDS entries on TRACES to reflect the full 20% deduction, adding the shortfall challan, and finally adding deductees with the correct 'amount paid'.

Mahenthiran

Mahenthiran (Querist)
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15 November 2023 WE HAVE DEDUCT THE TDS 1% FOR INDIVIDUALS, PAN CARD IS VALID BUT INOPERATIVE, SO THAT INCOME TAX DEPARTMENT RAISED DEFAULT NOTICE. NOW HOW TO PAY THE DIFFRENCE AMOUNT IN SARAL TDS SOFTWARE (OR) TRACES WEBSITE. HOW TO FILE CORRECTION STATEMENT THROUGH ONLINE MODE OR OFFLINE MODE. WHAT IS THE PROCEDURE, KINDLY EXPLAIN ANYONE REGARD THIS MATTER MOST URGENTS.

CA. Ankit Vijaywargiya

CA. Ankit Vijaywargiya (Expert)
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16 November 2023 Ask such individual to make his PAN operative and than file correction return.

Mahenthiran

Mahenthiran (Querist)
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16 November 2023 WE RECEIVE THE DEFAULT LETTER FROM INCOME TAX DEPARTMENTS, THEY MENTION PENALTY AND INTEREST. HOW TO MAKE THE DIFFRENCE AMOUNT THROUGH TRACES WEBSITE OR SARAL TDS

Manish

Manish (Expert)
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17 November 2023 Pay on https://eportal.incometax.gov.in/iec/foservices/#/e-pay-tax-prelogin/user-details

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Mahenthiran

Mahenthiran (Querist)
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17 November 2023 THANKS FOR VALUALE REPLAY, WHICH SECTION I HAVE SELECT HOW MUCH AMOUNT WE PAY, INCOME TAX DEPART NOTICE SHOWING ON SHORT DEDUCTION RS. 26,918/- AND INTEREST ON SHORT DEDUCTION RS. 671/- TOTAL RS. 27,590/- ( NOTE : PAN IS VALID BUT INOPERATIVE ) ALREADY WE DEDUCT 1% NOW BALANCE 19% TO BE PAID. THIS AMOUNT ONLY PAYABLE. KINDLY GUIDE STEP BY STEP SIR.

Manish

Manish (Expert)
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17 November 2023 Use code 400 and the same TDS section code for which the default appeared. In the interest field, enter 671.

Mahenthiran

Mahenthiran (Querist)
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22 November 2023 WE HAVE PAID THE DEFAULT AMOUNT THROUGH ITD CHALLAN CODE 400, AFTER THAT WE RECEIVE THE CHALLAN. NOW HOW TO FILE THE CORRECTION STATEMENT IN TRACES WEBSITE, KINDLY EXPLAIN STEP BY STEP

Manish

Manish (Expert)
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23 November 2023 File TDS correction statement. There are three steps:
1. Edit existing TDS entries of that inoperative PAN. Change 'Amount paid' to 'TDS' / 20%, so it reflects that 20% tax has been deducted.
2. Add shortfall paid TDS challan.
3. Add deductees under the above TDS challan - Enter 'Amount paid' as 'Amount paid' shown in the original return less 'Amount paid' from step 1.

That's how we have done.

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