28 November 2013
a company deducted tds @ 1 Percent on payment for which it has to deduct @ 2 percent. for ex comp A Deducted 1000 For 100000 Payment @ 1percent in f.y 2011-12 and filed return. as per advice it made payment for remainig 1 percent in f.y 2012-13 and filed corrected return by adding payment details in addition to original return. now we recd a notice stating short deduction it cosidered the payments double and levied tax payable. what to do now. please help.
28 July 2025
Here’s how to handle the situation where TDS was under-deducted, partly paid later, but the department is treating it as double payment:
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### Scenario Recap:
* FY 2011-12: TDS deducted @1% instead of 2% on ₹1,00,000 payment → ₹1,000 deducted and paid. * Later, in FY 2012-13: Additional 1% TDS (₹1,000) paid and return revised with payment details. * Notice received for short deduction and double payment levy.
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### What you can do:
#### Step 1: Verify Interest Payment
* Confirm that **interest on short deduction** under Section 201(1A) has been paid for the FY 2011-12. * If not paid, pay the interest immediately as it is mandatory.
#### Step 2: File Rectification under Section 154
* You can file an **application for rectification** under Section 154 of the Income Tax Act with the Assessing Officer (AO). * Mention clearly:
* The under-deduction at 1% was rectified by payment of remaining 1% later. * Interest has been paid on short deduction. * The department is mistakenly treating the payments as double. * Attach relevant proof: Challans, original TDS return, revised return, interest payment proof.
#### Step 3: Filing Revised Return (if not done properly)
* If revised return was not filed correctly with the payment of remaining TDS, follow these:
1. Download the **Consolidated (conso) file** from TRACES or NSDL. 2. Make payment of the balance TDS along with applicable interest and late fees (if any). 3. Include the new challan details in the revised return. 4. Upload the revised return on TRACES / NSDL portal.
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### Important Notes:
* Simply paying the balance TDS separately without filing a proper revised return and including challan details causes mismatch and notice. * The interest on short deduction should always be paid; otherwise penalty can be levied. * Rectification application under Section 154 is your remedy against any wrongly levied demand or double payment notice.
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If you want, I can guide you through the **step-by-step process of filing the rectification** or the **revised TDS return filing** process. Would you like that?
CAclubindia
