Have you received a TDS intimation for “Challan Mismatch/Overbooked /PAN Error have been identified in the preliminary check of Regular statement”. Earlier CPC (TDS) used to issue direct TDS default notice for any error in the regular statement filed, but now onward they give seven days time to correct any clerical error before final processing of your TDS return. Till then your regular statement will be on hold for processing. To get more clarity please go through the following FAQ’s issued by CPC (TDS) Team.
The Preliminary check notice gives the deductor a chance to correct his mistakes online, related to PAN and Challan Errors. This service has been started by the CPC from quarter four of FY 2014-15 onward. The deductor need to wait for 24 hours form the time of receipt of the intimation to correct his mistakes online. The justification report will not be available and the status will be pending for process till 7 days.
Centralized Processing Cell (TDS) will inform you of PAN and Challan Errors, by an Intermediate Communication, while processing of Original Quarterly TDS Return Statements. It is just before Defaults are finally computed and Intimated to the deductor.
On receipt of the Intermediate communication, Deductor need to take corrective action within 7 days of receipt of such Intermediate communication. So that, you can avoid PAN Errors and Intimations from CPC (TDS) related to Short Payment and Short Deduction Defaults in the relevant TDS Return.
Main points of the process:
- Identifying of errors in PANs or Challans in preliminary check, related to incorrect data entry.
- Correcting the errors before CPC (TDS) generates defaults in TDS return.
- The Intermediate Default communication is sent by :
- Registered e-mail address of the deductor (Check your email under Profile Setting in Traces)
- SMS at Registered Mobile Number of the deductor(Check your email under Profile Setting in Traces)
- Message will be sent to the Deductor’s Inbox in TRACES.
- The correction will to be carried out by though Online Correction facility at TRACES after 24 hours of the receipt of such Communication and must be done within 7 days of receipt, to avoid TDS Default notice.
What are the advantages:
- Early information of PAN and Challan Errors, Even before the Original return is processed for Defaults and Default Intimations are sent.
- Online Correction facility is available to correct errors and to avoid Short Payment notice and Short Deduction Defaults notice.
- Savings in Administrative Costs, as it is online and help in avoidance of multiple Correction
- Deductees receives Correct Tax Credit in their 26AS statements.
- It Saves Paper and Environment! .
Actions to be taken:
- You need to use the Convenience of Online Correction facility available at TRACES to correct errors received through the intermediate communication.
- It is ease of convenience and available anytime anywhere basis through TRACES. It is a fast and easy way for closure of TDS defaults.
- All information is available at TRACES portal, when you login and it is pre-populated along with incorrect entries, which helps to avoid of further Data Entry errors by the deductor.
Find the below given FAQ on TDS default notice.
Question 1 – What is this Intermediate Default Communication I have received from CPC (TDS) communication?
Answer – As per the feedback received from Deductor community, CPC (TDS) has brought in a significant change in processing of Quarterly TDS Statements. This change gives deductor(s) an opportunity to identify errors in Challans/PANs in advance and also to make corrections Before CPC (TDS) computes defaults in TDS statements. The Intermediate Default Communication is sent to Deductors to make them aware about this change while the statement is being processed.
Question 2- What will be the change in Processing of TDS Statement?
Answer – The Change will be as mentioned below:
- CPC (TDS) will first process Original TDS Statements till the stage of 26AS generation for deductees reported.
- Short Payments and PAN Errors will be identified in the preliminary check of the Original statements.
- The statements will be placed “On Hold” for further processing and an opportunity will be provided to correct potential defaults of Short Payment and PAN Error.
- When the statement is placed on Hold, CPC (TDS) will intimate you through following means:
- E-mail at the registered e-mail address at TRACES (Intermediate communication).
- SMS at Registered Mobile Number with TRACES.
- Message will be delivered to the Deductor’s Inbox in TRACES.
Question 3 – How much time I need to wait for submitting Online Correction at TRACES after receiving Intermediate Default Communication?
Answer – You need to wait for 24 hours after receiving Intermediate Default Communication for submitting Online Correction at TRACES.
Question 4 – What actions do I need to take after receiving Intermediate Default Communication?
Answer – You need to submit Online Correction for potential defaults within the 7 days after receiving communication.
Question 5 – What will be the Consequences of NOT doing Online Correction within 07 days of receiving the email?
Answer- In case you do not avail this opportunity, the statement would be processed with TDS defaults on account of Challan Mismatch/Challan Overbooked/PAN Error. Justification Report & Consolidated TDS file will be available only after complete processing of your TDS statement.
Question 6 – What are the advantages of this?
- You will have preliminary information of potential Short Payments and PAN Errors, before the Original Statement is completely processed for Defaults and Intimations are generated.
- You can correct the above defaults through “Online Correction” before final processing of statement.
Above actions will facilitate avoidance of multiple Correction Statements after identifying the defaults and sending Intimations by CPC (TDS).
Question 7 – What is the status “Processed For 26AS” mean?
Answer- Processed for 26AS means your statement is processed for updation of 26AS for the respective deductees mentioned in the statement.
Question 8 – When PAN Error occurs?
Answer – PAN Error occurs in following scenarios:
- PAN is structurally invalid.
- PAN not available with CPC(TDS).
- Valid PAN is not mentioned in the Statement at all. E.g. in case of PANNOTAVBL.
Question 09 – From Which Year it is mandatory to mention PAN in statement?
Answer – This is mandatory from 1st April 2010. For further clarification, you can refer to Section 206AA of the Income Tax Act 1961.
Question10 – Can PAN be verified on TRACES website?
Answer – Yes. You can Use “PAN Verification Facility” and “Consolidate TAN-PAN File” for PAN Verification.
Question11 – What is the Procedure to Verify PAN on TRACES?
Answer – PAN Verification facility on TRACES can be used for verifying the deductees. Please follow these steps:
- Login to TRACES
- Go to Quick Links
- Click on PAN Verification
OR, You can download “Consolidated TAN – PAN File” that includes all the valid PANs mentioned in the Previous Statement processed with CPC (TDS). Please follow these steps:
- Login to TRACES
- Go To Statement Payment Tab
- Select Download Consolidated TAN-PAN File
- File will be available at download section
Question 12 – Is DSC required to do PAN Correction?
Answer – YES.
Question 13 – How to register my DSC?
Answer – Please refer to e-tutorial. Steps are:
- Go to E-Tutorial Section.
- Digital Signature E-Tutorial is available under Miscellaneous Section.
Question 14 – I am not able to see the TAB for PAN Correction in Online Correction Functionality?
Answer – PAN correction category will not be visible if:
- DSC is not uploaded in the Profile.
o Suggestion- DSC can be updated in the Signature Tab of Profile.
- An online correction has been initiated and DSC is uploaded later on.
o Suggestion- If DSC is uploaded after initiating the online correction then please Logout and Login again.
oCancel the existing online correction request and resubmit the request again
Question 15 – What is Unmatched / Mismatch Challan?
Answer – When Deductor reports Challan details in the statement which is different from the Challan Details mentioned in the Challan/OLTAS, then Challan mentioned in the Statement will be considered as Unmatched/ Mismatch Challan. The Mismatch may be because of :
- Mismatch in CIN Details.
- Mismatch in Challan Amount.
- Mismatch in Assessment Year (more than +1/-1 year)
Question 16 – What is Overbooked Challan?
Answer – When reported amount of deductee row in Annexure-1 of the statement is more than OLTAS Available amount then Challan mentioned in the Statement will be considered as overbooked challan.
Question 17 – How can I rectify Unmatched Challan in the Online Correction after receiving the Intermediate Default Communication?
Answer- Please refer E-Tutorials of Online Correction or follow the below link
(For unmatched Challan correction -Without Digital Signature)
Question 18 – How to rectify Overbooked Challan after receiving the Intermediate Default Communication?
Answer- Please refer E-Tutorials of Online Correction or follow the below link :-
http://contents.tdscpc.gov.in/en/OC-Resolution-for- OverbookedChallan.html (For Overbooked Challan Correction – Digital Signature is required)
Question 19 – How to rectify PAN Error after receiving the Intermediate Default Communication?
Answer- Please refer E-Tutorials of Online Correction or follow the below link :-
(For PAN Correction –Digital Signature is required)
Question 20 – Can I Download Justification report and TDS/TCS consolidated file after receiving the Intermediate Default Communication?
Answer- No, Justification Report & TDS/TCS Consolidated file will not be available to do Intermediate Corrections. Such Defaults can be corrected only through Online Correction Functionality.
Question 21 – I have Only NIL Challan; I have got this Intermediate Default Communication? What should I do?
Answer – Please ignore the email.
- Always update email address and Contact Number on TRACES.
- Please read to FAQs and e-tutorials for details.
Please comment for any query on TDS Default Notice.