Tds / tcs

This query is : Resolved

shankar banerjee (Querist)
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11 January 2013
A company has sold certain scrap items to a scrap hawker and deducted tcs. How it will file tcs return without PAN of the scrap hawker.

anurag

anurag (Expert)
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11 January 2013 To submit return without having 100% PAN, you have to select higher rate as coded "C" in column named "Reason for non-deduction / lower deduction"

shankar banerjee

shankar banerjee (Querist)
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12 January 2013
The field reason for higher / lower deduction has only two option A or B

What is the case for a person who is not required to have tds deducted as his income does not require a PAN for filing the same

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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28 July 2025 Here’s how it works with **TCS return filing when PAN of buyer (scrap hawker) is not available**:

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### Background:

* A company sells scrap and collects **TCS (Tax Collected at Source)**.
* Buyer (scrap hawker) **does not have PAN**.
* The company needs to file the TCS return but PAN is missing.

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### Key points:

1. **TCS Return & PAN:**

* While filing TCS return (Form 27EQ), PAN of the buyer is generally required.
* If PAN is **not available**, you must report the transaction with reason codes for non-availability of PAN.

2. **Reason Codes for Non-Deduction or Lower Deduction (Column):**

* The codes are used to explain why PAN is missing or TDS/TCS deducted at higher or lower rates.
* Typically, reason codes "A" or "B" are used, but for **non-availability of PAN**, usually **code "C"** or the applicable code should be selected.
* Sometimes the utility or version of the return file validator (FVU) may show limited options.

3. **If the Utility Shows Only "A" or "B":**

* The software or FVU version might be outdated.
* You should update the FVU utility to the latest version which supports **all reason codes including "C"** for non-availability of PAN.
* Alternatively, some systems expect code "B" (Higher deduction) to be selected in case PAN is not available, to reflect TCS at higher rate (without PAN, higher TCS rate applies).

4. **If Buyer’s Income Does Not Require PAN:**

* Even if the buyer is exempted from PAN for income tax return filing, **TCS rules are separate**.
* For TCS, PAN or Form 60/61 must be collected; otherwise higher TCS rate applies.
* You must record the reason code accordingly and deduct TCS at higher rate (without PAN).

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### What should you do?

* Check if your TCS return filing utility (FVU) is the **latest version**; update it if not.
* Use the reason code for **non-availability of PAN** (usually "C").
* Deduct TCS at the **higher rate** applicable when PAN is not provided.
* Maintain proper documentary evidence like Form 60 from the buyer.
* If software constraints remain, select the code that corresponds to **higher deduction without PAN**.

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If you want, I can help you find the latest FVU version or guide you on the exact codes to use. Would that help?

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