How to correct errors in TDS returns?

Posted In | Finance | Accounting Software | India Accounting Tax

Tax Deducted at Source or TDS is a means of collecting income tax in India under the Indian Income Tax Act of 1961. It is a source of revenue for the government and a responsibility for the citizens. However, there are instances when errors may occur while filing TDS returns. This article provides a step-by-step guide on how to correct these errors.

 

1. Identifying the Types of Errors

Before proceeding to correct errors, it is important to identify the type of error in your TDS return. The two main types of errors are 'PAN Error' and 'Challan Error'. PAN Error occurs when the PAN details of the deductee are incorrect while Challan Error relates to incorrect details in the tax payment challan.

 

2. Correcting PAN Errors

To correct PAN errors, you need to log in to the TRACES website using your login credentials. After logging in, select the 'Defaults' option from the main menu. In the drop-down list, select 'Request for Correction'. Enter the required details like the token number of the statement to be corrected, the correction category as 'PAN Correction' and other necessary details. After submitting the request, download the 'Conso File' and the 'Justification Report' to identify the incorrect PAN. Replace the incorrect PAN with the correct PAN and upload the corrected file.

 

3. Correcting Challan Errors

For correcting Challan errors, the process is similar to that of correcting PAN errors. The only difference is that in the correction category, you select 'Challan Correction' instead of 'PAN Correction'. Then, download the 'Conso File' and the 'Justification Report', identify the incorrect challan information, replace it with the correct information and upload the corrected file.

 

4. Important Points to Remember

While correcting errors in TDS returns, there are a few important points to remember. First, ensure that the correction statement is prepared in the same format as the regular quarterly TDS/TCS statement. Second, the control chart of the correction statement should be signed by the same person who signed the original statement. Lastly, the correction statement should be submitted to the same TIN-FC where the original statement was submitted.

 

Correcting errors in TDS returns may seem daunting at first, but with the right knowledge and understanding of the process, it can be done with ease. Remember to be careful while entering the details to minimize the chances of errors. However, even if errors do occur, they can be corrected by following the steps outlined in this guide. Always ensure to comply with the tax laws to avoid penalties and legal complications.