If the traces is showing default on TDS, how do I pay it? Will there be an outstanding demand in the income tax portal?
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Quick Summary
Discussion explains how to pay TDS defaults shown on TRACES. Users suggested checking default summaries, raising correction requests, contacting TRACES helpdesk, and paying outstanding demand through the income tax portal with correct AY details.
If TRACES (TDS Reconciliation Analysis and Correction Enabling System) shows a default on TDS, you'll need to pay the due amount to avoid further action.
Here's a step-by-step guide:
1. Log in to the TRACES portal (www.tdscpc.gov.in) with your credentials.
2. Navigate to the "Default" or "Outstanding Demand" section.
3. Select the relevant assessment year and default type (TDS).
4. Verify the details and amount payable.
5. Click on "Pay Online" and select the payment option (e.g., Net Banking, Debit/Credit Card).
6. Make the payment and note the challan number.
7. Confirm the payment on the TRACES portal.
Regarding the income tax portal, an outstanding demand may appear under the "TDS Defaults" or "Outstanding Demands" section.
At the income tax portal you can find out all the default notices & demands. You can pay it as the other tds challan paid , financial year & the Assessment year is the most important, one should take more precaution on that .
To pay a TDS default, use Challan 281. Here is the step-by-step.
1. Log in to incometax.gov.in and go to e-Pay Tax. 2. Select Challan 281: TDS/TCS payable by Non-company Deductors (or Company Deductors). 3. Choose the correct nature of payment: 92A for salary TDS, 92B for TDS on other payments. 4. Pay the principal TDS plus interest under Section 201(1A).
Interest under Section 201(1A):
- 1% per month from the date TDS was required to be deducted to the date of actual deduction (if deduction itself was late) - 1.5% per month from the date of deduction to the date of actual deposit
Example: TDS deducted on June 1 and deposited on August 10 means 1.5% per month for June, July, and part of August. Part months count as full months.
After paying:
- File a correction TDS return through TRACES to link the challan to the correct deductee entries. - The deductee Form 26AS updates once the correction return is processed. - If you also missed the quarterly return filing deadline, Section 234E applies at Rs 200 per day. Pay that as part of the same challan.
This [Section 201(1A) guide on late TDS deposit](https://taxgarden.in/blog/section-201-1a-interest-late-tds-deposit-deduction-india) has worked-out examples with the interest calculation so you can verify your numbers before paying.
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