Tds extra deposited and tds deducted and not deposited

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NEHA AGARWAL (Querist)
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08 July 2013 One of my deductee's of TDS u/s 194J had deducted TDS and not deposited. I came to know from the 26AS form. what happens now? Can/should I show that income and what about the TDS?

Second question is One of my deductee's of TDS u/s 194J has shown an additional income of 20k and deposited 2k as TDS. Now my taxable income has increased without any actual income. The return for 12-13 has to be filed by july end. Can anything being done in the FY 12-13 and FY 13-14

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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08 July 2013 1. You have to show the income at full amount.
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You have to advise your client to file the TDS return as the earliest possible. Also tell him to remain ready to pay a late fee of RS. 200/day for late filing of TDS return
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2. The amount is still receivable so advise him to make payment of the balance amount after TDS i.e. Rs 18000.

NEHA AGARWAL

NEHA AGARWAL (Querist)
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08 July 2013 Sir,
1)He has filed the TDS return but has not deposited the TDS for two months.

2)the amount is not receivable, that is not my income/earning. He by mistake has shown an income of 20000 and deposited TDS of 2000.The amount is not received/receivable as its not an income.
He has deposited TDS of 2000 and increased by income by 20000 on which being in the 20% bracket, I will have to pay tax of 4000. Is there a solution to deal with this?

Asha Kanta Sharma online

Asha Kanta Sharma online

(Expert)
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27 July 2025 Got it, here’s a clear breakdown and some practical steps for your situation:

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### 1) **TDS deducted but not deposited by deductor**

* Since the deductor deducted TDS but **did not deposit it with the government**, the **tax credit reflected in your Form 26AS is incorrect**.
* You **cannot claim TDS credit** for that amount since it wasn’t deposited.
* You **must show the full income (gross amount) while filing your return**.
* You can **report this to the Income Tax Department** if you want to push the deductor to deposit the TDS.
* If the deductor delays deposit, the deductor is liable to pay **interest and penalty**.
* You can also file a grievance through the TIN-NSDL or CPC portal regarding non-deposit of TDS.

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### 2) **Deductor mistakenly reported higher income & deposited TDS on non-existent income**

* Your gross income has increased by Rs 20,000 (which is incorrect), and TDS of Rs 2,000 was deposited by the deductor.
* This has resulted in higher taxable income and higher tax liability for you.
* Since the income is **not actual or receivable**, you should **dispute this mismatch**.

#### What you can do:

* **File your return showing the correct income (excluding the Rs 20,000) and claim that TDS of Rs 2,000 is not your credit.**
* Attach an **explanation / letter of clarification** that this Rs 20,000 is erroneously reported by deductor.
* You can also request the deductor to file a **correction statement (TDS correction statement)** to revise the reported income and TDS.
* If the deductor revises, Form 26AS will get corrected in the next update cycle.
* If return is filed without correcting, the tax department might issue a notice due to mismatch; you can respond with proof.

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### Summary:

| Issue | What you should do | What deductor should do |
| ---------------------------------------- | ----------------------------------------- | -------------------------------------- |
| TDS deducted but not deposited | Show full income, no TDS credit claimed | Deposit TDS ASAP, pay interest/penalty |
| Deductor inflated income & deposited TDS | File return with correct income + explain | File correction statement to rectify |

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If you want, I can help draft the letter/explanation for your return or suggest the exact steps to request the deductor for correction.

Would you like that?

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