TDS Notices — How Do You Reconstruct the Reasoning Behind a Rate?

Yes, the issue is genuine. In many cases, TDS notice handling requires reconstructing the logic from vendor master, contracts, PAN status, thresholds, and supporting records because most systems store the result, not the full reasoning trail.

Thank you for this — really helpful to hear from someone who handles this in practice.

Two follow-up questions if you don't mind:

1. When you reconstruct the logic for a notice, roughly how long does it typically take per transaction? Is it hours or days?

2. Do your clients (or their ERPs) typically have any of this stored — or is it always a reconstruction from scratch?

The Income Tax Act 2025 renumbered all TDS sections from April 1, 2026, so Section 194J is now Section 393 and Section 194C is now Section 392 ,  if your notice references an old section number while your returns used the new ones, that often explains the mismatch rather than the rate itself being wrong. For reconstructing the rate, you need three things: the payment date, the nature of the payment (contract vs. professional vs. salary), and whether the payee had a lower-deduction certificate in force at that time. If the rate itself is disputed, the assessing officer's worksheet in the notice will show you what rate they expected so you can compare directly against the section and thresholds. The new section numbering and how TDS certificates changed this year are covered in this [Form 130 TDS certificate guide](https://taxgarden.in/blog/form-130-replaces-form-16-tds-certificate-2026).