TDS Challan Correction Procedure and Mistakes that can be done by TDS Deductor

Introduction

When submitting TDS through challan, the deductor must supply information such as his or her PAN/TAN, the relevant assessment year, the applicable major and minor head code, the nature of the payment, and the amount of TDS to be deposited. While providing all of these details, there maybe clerical errors at anytime, resulting in the deductee receiving no tax credit. This article will be helpful in knowing about TDS Challan Correction Procedure.

Let’s take a quick look at “What is TDS (Tax Deducted at Source)?” before focusing on the TDS Challan correction procedure.

What is TDS (Tax Deducted at Source)?

TDS (Tax Deducted at Source) was created with the goal of collecting tax directly from the source of revenue. According to this notion, a person (deductor) who is required to make a payment of a specific sort to another person (deductee) must deduct tax at source and send it to the Central Government’s account.

Different Ways for TDS Challan Correction

• TDS Challan Correction Via Bank
• TDS Challan Correction in TRACES
• TDS Challan Correction by an Assessing Officer

Mistakes that can be done by TDS Deductor

Incorrect Assessment Year

A difference in the specifics of the processing and reporting of tax in the TDS challan will result from an inaccurate financial or assessment year. As a result, there are chances that a deductee will not receive any Tax Credit.

 Incorrect TAN Information

Individuals obligated to collect or deduct tax from payments under the Income Tax Act of 1961 are given a Tax Deduction and Collection Account Number (TAN). However, the TAN is sometimes mentioned or changed improperly in the system. As a result, the payment is not recorded in the tax returns, and the tax department is unable to validate them.

 Incorrect PAN Information

If a person’s Permanent Account Number (PAN) is entered incorrectly, the tax paid will not be recorded, resulting in non-payment of tax by the same person.

 Date of Deposit is Mismatched

If the deposit date differs from the TDS challan date, there will be a data mismatch, and the refund will most likely to be refused.

 Wrong or incorrect information of a Deductor

The TDS filed may be rejected if the information provided by an individual or a representative of an organisation or entity is erroneous. The same goes for the deductor information, which if entered improperly will prevent the file from being submitted to the portals.

TDS Challan Correction Procedure

 TDS Challan Correction Via Bank

1. The applicant must send the correction request form to a branch of the concerned bank.
2. A copy of the original challan counterfoil must be attached by the applicant.
3. For each challan, the petitioner must submit a separate request form.
4. If the applicant is a non-individual, the correction request form must be accompanied by the non-individual applicant’s original authorization with seal.

• Essential points for TDS (Tax Deducted at Source) Challan Correction

 When approaching a bank for TDS challan adjustment, an individual must be aware of the following points.

• The bank is unable to correct the name.
• It is not possible to correct the assessment year and the minor head at the same time.
• The name of the challan should be matched with the new PAN / TAN, then only it will be authorised otherwise it will be rejected.
• TDS Challan permitted, only if the change in amount does not differ from the amount received by the bank and credited to a government account.
• A single TDS challan can only be corrected once for a specific field.
• It is not permitted to accept part of a change correction request in the challan.

 TDS Challan Correction in TRACES 

TDS Reconciliation Analysis and Rectification Enabling System (TRACES) allows for online TDS challan correction. The deductor is needed to follow the processes outlined below:

1. Visit to TRACES Portal
2. For Login to the Portal, insert your User ID, TAN for Deductor and Password information
3. Once you successfully sign in, click on the default option and from there click on Request for Correction
4. Fill in the necessary information and submit the request

 TDS Challan Correction through Assessing Officer

1. If the deadline for submitting challan corrections to the bank has passed, the taxpayer may file a request for rectification to the appropriate Assessing Officer.
2. Under the OLTAS application, the concerned evaluating officer is entitled to make challan details adjustments.
3. The applicant must submit the correction request form (in duplicate) to the appropriate Assessing officer.
4. A copy of the original challan counterfoil must be attached by the applicant.
5. For each challan, the petitioner must submit a separate request form.
6. If the applicant is a non-individual, the non-individual applicant’s original authorization with seal must be included in the correction request form and submitted to the concerned Assessing officer.

Conclusion

While a TDS challan can be changed, it cannot be removed from a statement that has already been submitted because it has been utilized. Furthermore, a taxpayer must request TDS challan correction in the bank within seven days of the date of deposit of the document. In this case, the taxpayer should contact the appropriate bank and request a challan rectification.