Taxtortion: No TDS certificate unless short payment defaults are paid
Moneylife Digital Team 23 April 2015

The TRACES portal of Income-tax department is preventing deductors from issuing TDS certificate unless past demands, irrespective of whether it is valid or not, are paid  

 

The Tax Deducted at Source (TDS) reconciliation analysis and correction enabling system (TRACES) portal of the Income Tax (I-T) department is preventing deductors to obtain TDS certificate unless past demands are paid and online correction submitted. This is turning out to be a nightmare for those, who have disputed the demand or are wrongly shown as defaulters or who do not even know about the demand. In addition, it takes too much of a time to rectify the errors in tax demands from the I-T department. 
 
"(The) Centralized Processing Centre (CPC) TDS prompts you to first close the short payment defaults before submission of request for download of TDS Certificates," a note on the TRACES portal says 
 
In a communication issued on 18 March 2015, the CPC (TDS) TEAM, says, "The Centralized Processing Centre (TDS) has observed from its records that there are Short Payment Defaults in Quarterly TDS Statements submitted by you (deductor) and therefore, downloading of Consolidated Files and TDS Certificates are currently restricted for your tax deduction and collection account number (TAN)."
 
The communication says CPC (TDS) has initiated a special drive for closure of Short Payment Defaults due to Unmatched or Insufficient Challans in the TDS Statements. "Since the due date for filing of TDS Statements for fourth quarter of 2014-15 and distribution of TDS Certificates subsequently is approaching fast, you are suggested to close the above defaults without any further loss of time," it says.
 
Short payment defaults in the TDS Statements may appear due to unmatched challans and insufficient challans. The portal itself admits that at times, data entry mistakes are committed, while reporting tax payments in the respective TDS statements. In addition, incorrect quoting of TAN, incorrect assessment year in ITNS 281 while depositing TDS may happen. Further, multiple on-line tax accounting system (OLTAS) challans may have been reported in the TDS statement incorrectly, with information pertaining to only one challan, and mapped with the referenced deductee rows.
 
As per issue of insufficient challans is concerned adequate balance may be available in OLTAS challans, however, already consumed challans may have been incorrectly used in the TDS Statement. The deductor may have tried to consume more than the available challan balance for reporting TDS deducted in the statements. "Though CPC (TDS) makes best efforts to match challans, however, they may remain unmatched leading to 'Short Payment' Defaults," the Communication says. 
 
So, how can the deductor rectify the tax demand? You have to first download justification report from the TRACES portal to view your latest outstanding demand. In case there is no available challan, you are required to first deposit the due tax in the bank and then the same challan will be available for tagging in CPC (TDS) system after around three-four days of deposit. The Online Correction facility of TRACES can also be used for closure of the short payment default, which can be availed without digital signature.
 
The CPC (TDS) communication recommends to us to close the default by tagging unconsumed challans, if available in its system, through Online Correction. The deductor can access the details of defaults, if any, only during online correction process. Once the challan is suitable tagged and online correction submitted to CPC (TDS), then it would be processed and the rectification in short payment defaults may take place. However, there is no time specified for this process. 
 
Last year in August, the Centralised Processing Cell (CPC) of the I-T department issued a communication (still displayed on the TRACES portal), according to which short payment defaults in the quarterly TDS statements due to unmatched challans had to be closed before the deductor would be allowed to download the “consolidated” files. (Read: New TDS procedure just announced will mean more coercion and blackmail by I-T department)  
 

 

Comments
vswami
9 years ago
Another instance of 'Taxtortion' ( If No "Certificate of 'LH' ", No permission to e'file tax return as LR of a deceased)

An Update (well intended > for special attention of, social activists and law experts at large)
This write-up mostly concerns mismatch of TDS data, in particular leading to the otherwise avoidable consequence of an in -fructuous demand. On the flip side, however, there is another aspect, which must be of no less concern, hence needs to be brought to sharp focus. That is an instance in which, should there be clearly excess tax paid by way of TDS, etc., resulting in a refund claim. Such a refund claim has come to be seriously jeopardised , in a case in which, a person being LR and therefore, has to file the tax return of a deceased , of his income accrued or received up to/as on the date of his demise. That is the intended or not-so-realised consequence of the CPC prescribed procedure; which, in turn, prevents the LR who volunteers and files such return from accessing some services (see the items numbered in the Table , with the remark NO facilities), unless and until he manages to and furnish anyone of the 5 Certificates .
Out of the so specified 5 Certificates, Registered Will is one. Even so, at least one instance in which the LR, who was named in the Will of the deceased, a copy whereof was offered to be placed on record, has been prevented by the CPC, - by doing so the view taken/ reason given by the CPC is patently fallacious; in a way suicidal, if were to be critically examined, in that, it goes against the very grain of expectation by the Revenue of tax payers compliance with the law.
More: http://taxguru.in/income-tax/filing-ereturn-legal-heir-lh-dsc-revised-process.html/comment-page-1/
vswami
9 years ago
An Update (well intended > for special attention of, social activists and law experts at large)
This write-up mostly concerns mismatch of TDS data, in particular leading to the otherwise avoidable consequence of an in -fructuous demand. On the flip side, however, there is another aspect, which must be of no less concern, hence needs to be brought to sharp focus. That is an instance in which, should there be clearly excess tax paid by way of TDS, etc., resulting in a refund claim. Such a refund claim has come to be seriously jeopardised , in a case in which, a person being LR and therefore, has to file the tax return of a deceased , of his income accrued or received up to/as on the date of his demise. That is the intended or not-so-realised consequence of the CPC prescribed procedure; which, in turn, prevents the LR who volunteers and files such return from accessing some services (see the items numbered in the Table , with the remark NO facilities), unless and until he manages to and furnish anyone of the 5 Certificates .
Out of the so specified 5 Certificates, Registered Will is one. Even so, at least one instance in which the LR, who was named in the Will of the deceased, a copy whereof was offered to be placed on record, has been prevented by the CPC, - by doing so the view taken/ reason given by the CPC is patently fallacious; in a way suicidal, if were to be critically examined, in that, it goes against the very grain of expectation by the Revenue of tax payers compliance with the law.
For MORE: http://taxguru.in/income-tax/filing-ereturn-legal-heir-lh-dsc-revised-process.html/comment-page-1/
(Caution: Not to omit but read the posted comments on above; also, shared on Facebook)
ABHISHEK BHATHAR
10 years ago
I think this is right step... As TDS default mostly arises bcz of technical mistakes of assessees, so now they will correct their returns. In any case this is not demand generated by human being so no harassment by Income Tax Department.
TIHARwale
Replied to ABHISHEK BHATHAR comment 10 years ago
Boss if the items are unreconciled you have paid tax, Bank is certifying and confirming that tax is remitted now who has to do the rectification for errors committed at TRACES level. why they dont correspond over mail so that tax payer can reply with evidences. what is preventing I.Tax Dept in providing this facility. Providing email correspondence will sort the issues with exact pin point the role play till such time honest tax payer is an harrassed person for no fault of it. Suppose demand is more than refund the following year your refeunds will be accounted against wrong demands due to TRACES doing careless and clumsy job.
TIHARwale
10 years ago
If this is the minimum governance then honest tax payers are gouing to be the worst sufferers. What is preventing I.Tax department to send notices with email address of the concerned tax official so that tax payer can mail the details and get the entries regularised. 90% of cases where I.T.Dept has raised demand are those where tax have been paid. Bank has remitted only at the TRACES level entries are un matched. it is usually seen thatv in other financial surplus tax is credited on behalf of the tax payer. Income Tax Dept insted of correcting these entries are behaving like bunch of jokers and going on accumulating int on these disputed demands
ABHISHEK BHATHAR
Replied to TIHARwale comment 10 years ago
Dear Tiharwale,
Government has initiated some programmes like meeting to the officers on wednesday without prior appointment, etc., we as a citizen has to fully utilise those and if we are right we may go to any levels and by that we may get our queries solves, even PM is directly looking after these query resolution. So we should first try for those and make people aware for that and then reach to a conclusion...
Jadhwani
Replied to TIHARwale comment 10 years ago
IN SUCH CASES ALLOW PEOPLE TO SUBMIT HARD COPY PROOF DIRECTLY TO BANGALORE OFFICE - IF ONLINE FAILS - WHY DO INJUSTICE TO POEPLE OF INDIA - NOT CORRECT AT ALL
Laxmi Lobo
10 years ago
How does this make a tax payers life simple?
As it is, making a Tax payer responsible for collecting tax on behalf of the govt is ATROCIOUS, to say the least!
IT dept should have worked at getting rid of the TDS, instead they complicate further?
Anand Vaidya
10 years ago
This is all just crazy. Whoever invented TDS must be exiled from India.

I have never seen Form 26AS match TDS actually deducted by banks. One bank doesn't even bother to deduct TDS. Some other don't send F16 or upload data.
TIHARwale
Replied to Anand Vaidya comment 10 years ago
if TDS is deducted and not remitted it is misappropriation. this is what KingFisher did collected service tax and didnot remit about Rs 200 crores but the sucker Govt did not act against Vijay Mallya. Finance Minister Arun Jaitely sits with Vijay and attends meetings presided by BCCI Srinivasan. Vijay Mallya own team in IPL but screws public sector Banks over Rs 14000 crores, it started during UPA rule and will continue in NDA rule with Jaitley as FM
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