How to Download & Install TRACES Web Socket Emsigner

How to Download & Install TRACES Web Socket Emsigner

How to Download & Install TRACES Web Socket Emsigner: TRACES is the online platform offered for the administration and implementation of TDS and TCS. For Registering DSC on TRACES or for the KYC validation using the DSC, it is compulsory to download and install the WebSocket emSigner. Thus, the deductor should download the WebSigner Utility from their account on TRACES.

What is TRACES Website?

TDS Reconciliation Analysis and Correction Enabling System, abbreviated for TRACES, is an online platform offered by the Indian Income Tax Department at the website – The TDS return processing takes place online with a dashboard, and the status of filings and tremendous demand is shown therein. TRACES Emsigner – Download & Install

How to Download and Install Emsigner

The steps to download and install designer for digital signing on TRACES portal.

Step-1: Login to TRACES WEBSITE

Step-2: Fill in the User ID, the Password and the TAN number of the deductor.

Step-3: Go to the download tab, click on ‘Requested Download’. After that, the following screen appears. Select ‘Click here for downloading the utility.

Webdesigner Of TRACES Setup V2.0

Step-4: Click on the ‘Traces WebSigner Setup V2.0’ for downloading the Emsigner setup.

Step-5: Click on the ‘Run’ option. After the completion of the installation process, please click the ‘Finish’ option.

Installation Guide for TRACES EmSigner

Step-6: Complete the process of installation. Make sure that the following process is completed.

  • Download the WebSigner Setup on the local system
  • Please make sure to install the JRE 7 or above (version 32-bit only) on the machine
  • Make sure to Unzip the file that you have downloaded.
  • Click on the setup file and select the “Install” option in order to start the process of installation.
  • Finish the process step by step by clicking the ‘Next button
  • Click on Finish
  • Go to the start menu and click on emSigner to start the service

Error in Establishing a Connection with the TRACES Web-socket Designer

The above is going to be resolved if the TRACES EmSigner has been loaded. Before the digital signature, click on the option “Run as administrator” in the start-up panel of windows.

Step-7: After that, one can choose to register their DSC on the TRACES Portal. After Logging in to Traces and Click on the ‘Profile’ Tab and the ‘Signature’ Tab. Choose the DSC certificate and enter the DSC password.


TDS on Transportation Charges

TDS on Transportation Charges | Points Regarding TDS Under Section 194C

TDS on Transportation Charges: Confusion regarding the application of Section 194C has been observed amongst people. Section 194C focuses on TDS on the contract during payment to the transporter. This might result from various amendments through the years related to the specific points 194C(6) and 194C(7). The summarization of the details of Section 194C is discussed below.

Points Regarding TDS Under Section 194C

  • This revised sub-section is applicable with effect from April 1st, 2015.
  • The transporter for the sub-sections mentioned is the person handling plying, hiring, or leasing assets carriages.
  • The advantage of non-deduction of tax is available only for small transportation operators owning less than ten goods carriages.

Therefore, if the transporter having not more than ten goods carriages through the year, provides his PAN and the declaration, then, being a payer, they don’t have to deduct his TDS.

But suppose the transporter was owning more than ten goods carriages at any time during the year. Then, as payers, they must deduct TDS during payment of charges to goods transporter at the price of 1% or 2% depending on the case and status of the transport contractor.

Note: The TDS rate of 1% and 2% will decrease to 0.75% and 1.50%, respectively, through the period from the month of May 14th, 2020, to the month of March 31st, 2021.

  • The person accountable for paying or charging any amount to such transporters shall furnish a declaration along with their PAN to the income tax authority.

Under Section 194C, the specified persons must deduct income tax:

  • Central/State Government employee
  • Co-operative society/Statutory corporation
  • Housing/Town development authority
  • Registered society
  • Trust/Local authority
  • University
  • Foreign Government/Enterprise/Association
  • Individual/Association of persons gross receipts Rs. 1 crore during the preceding financial year.

Is TDS applicable on transportation charges?

What is TDS on Transportation (Freight)? According to Section 194C, any payment made to a transporter is subject to TDS deduction on freight charges. The payer must reduce the income tax amount before transferring the fee.

What is the TDS on transportation?

Section 194C of Income Tax Act is amended to include TDS deduction of 1 % for individuals and Hindu Undivided Families owning more than 10 goods carriage, and at the rate of 2% in case of other payees.

What is the TDS limit for transporter?

TDS on transporter

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Is transporter in TDS return?

As per Income tax act 194C, TDS is not required to be deducted on payments made to transporter If PAN number has been provided to the deductor. To incorporate nil rate transporter entries in E-TDS return by inserting a tag “T” in remarks in 26Q.

Is TDS applicable on vehicle insurance?

Most times people choose their insurance via agents, brokers, etc. In such cases, the insurance commission or any other remuneration/reward received by such agents, brokers etc., are subjected to Tax Deducted at Source (TDS) as dictated under Section 194D of the Income Tax Act.

TDS Practical Guide with Examples

Tax Deducted Source (TDS) | Practical Guide with Examples

TDS: TDS stands for Tax Deducted Source. In the TDS system, individuals responsible for making payment for specified services such as brokerage, professional consultancy, commission, etc., are required to subtract a fixed percentage from the amount.

About TDS

The like deducted amount (which is called TDS) have to be deposited to the government by the deductor (person who is deducting tax) on behalf of the deductee (person who is providing services), which deductee can claim as Income Tax Paid at the time of filing his Income Tax Return.

  • For example, ABC Pvt Ltd has to pay Rs 1,00,000 to Mr XYZ for a professional fee. TDS rate specified on the professional cost is 10%. The TDS needed to be deducted 10% on Rs 1,00,000, which equals Rs 10,000, and the Net payment to Mr XYZ is TDS Deducted from the Gross Amount that equals Rs 1,00,000 – Rs 10,000 and gives Rs 90,000. So, the TDS to be deposited to the Government by ABC Pvt Ltd is Rs 10,000.

TDS can also be deducted from salary. The calculation of tax subtractable is different in the case of wages since TDS is not deductible as a fixed percentage but according to a specific method under section 192.

Persons Who Are Required to Deduct TDS

The government has notified the persons mentioned below, who are required to subtract TDS for the services specified:

  1. An Individual and HUF is needed to deduct TDS on the selected services if they are involved in:
  2. Any business having a turnover of Rs 1 crore or above during the last financial year.
  3. A professional with receipts of Rs 50 lakh or above during the previous financial year must get books of account audited under section 44AB.


  1. If a person is required to get his books of account audited due to reporting the net profit, which is lower than 8% of the business’s turnover (according to Section 44 AD). According to Section 44ADA, 50% of the gross receipt in professional services; is not required to subtract TDS.
  2. Other persons apart from Individual and HUF include Private Limited Company, Partnership Firm, Co-operative Society, LLP, etc.

Exception for Individual and HUF

The cases below are also required to deduct TDS:

  1. In the case of the Purchase of immovable property where the consideration paid for the property is more than Rs 50 Lakh (as per Section 194IA).
  2. The rent paid for building exceeding or land exceeds Rs 50,000 per month (according to Section 194IB). Only those Individuals or HUF are covered, which are not required to deduct TDS as per the point mentioned above (as per section 194IB). If an individual is covered as per point (a), they must deduct TDS under section 194I and not section 194IB.
  • The only two cases in which a non-business is also required to deduct TDS are mentioned above.

What is TAN? Its Requirement and Exception

The Tax Deduction and Collection Account Number (TAN) is a unique ten-digit alphanumeric number allotted to the deductor or collector of TDS. It is furnished to identify every deductor.

Each individual who is required to deduct TDS should apply for TAN. TAN is needed to be quoted on all TDS payment challans, TDS certificates & TDS returns. You can use Form 49B in any NSDL office, or you can also apply online for TAN from the NSDL website.

Penalty – The penalty of Rs. 10,000 on failing to apply for TAN or quoting TAN in payment challans, TDS return and TDS certificates.

The Time Limit to get a TAN

No specified time limit is given for getting TAN. However, you should apply for TAN when you become liable to deduct the TDS of any person since TDS payment and return filing cannot be accomplished without TAN.


  • A separate TAN is not required to obtain TCS.
  • If you have made any payment above the threshold limit and TDS is required to be deducted, you must apply for the TAN. For example, if you certify as a Private Limited Company and do not make any payment on which TDS is required to be deducted, there is no need for a TAN.


TAN is not required if TDS is deducted for Purchase of Immovable property (Section 194IA) or rent paid (Section – 194IB). Deductor has to use their PAN for the TDS payment and for filing returns.

Tax Deducted at Source

When to Deduct TDS?

The time of deducting TDS depends on the nature of the payment. TDS is required to be removed at the time of actual payment only, not on a due or accrual basis in the following cases:

  1. Salary
  2. The Payment of the assembled balance of the Employee’s Provident Fund.
  3. Victory from lottery or crosswords puzzle.
  4. Win from horse races.
  5. The Payment in respect of life insurance policy to the policyholder.
  6. The Payment for deposits under the National Saving Scheme.
  7. The Payment on account of repurchase of units by Mutual Funds or Unit Trusts of India.
  8. The Payment of compensation on compulsory acquisition of specified immovable property.

During the time of credit of such income to the payee’s account or at the time of actual payment, whichever is earlier in case of all other payments (such as commission, profession fee, consultancy etc.) except the payments mentioned in the above point.

Note: TDS must be deducted from the beginning if it is likely that the total amount will exceed the threshold limit during the financial year.

For example: if you have a professional service contract amounting to Rs 2,00,000 and the first payment is due in April, adding up to Rs 13,000. If so, TDS is required to be deducted at 10%, as it is likely that the total amount will exceed the threshold limit.

The Threshold Limits and Nature of Payments

The points below summarize the nature of the transaction where TDS is required to be subtracted if the amount exceeds the threshold limit, together with the applicable rates of TDS for payments commonly used.

TDS Amount Calculation

TDS needs to be subtracted from the total amount if such amount exceeds the threshold limit specified for that particular nature of transactions.

Few examples which will help in understanding the calculation of TDS

Example 1 – Service provided by an individual contractor ‘A’ to a partnership firm ‘B’. The contractor during the year is being paid as per the payment that follows.

Payment 1 is Rs 32,000

Payment 2 is Rs 24,000

Payment 3 is 60,000.


When Payment 1 is Rs 32,000: the TDS is required to be deducted at 1% as the sum exceeds the threshold limit of Rs 30,000 in a single payment. After deduction, the net payment to ‘A’ will be Rs 31,680, with a TDS of Rs 320 (32000 * 1%).

If Payment 2 being Rs 24,000: no TDS is required to be deducted as the single payment is less than Rs 30,000, and the total payment made during the year will be Rs 56,000 (32,000 + 24,000), which is also less than the threshold limit of RS 75,000.

If Payment 3 is 60,000: the TDS should be deducted at 1% on the gross amount as the total payment in the year surpasses Rs 75,000.

The total TDS required to be deducted is Rs 840 (24,000 * 1% + 60,000 * 1%) at the time of making payment of Rs 60,000. Net payment is to be made to ‘A’, which is Rs 59,160.

Example 2 – If contractor A is a Partnership Firm in place of the individual.


If Payment 1 is Rs 32,000, then TDS is required to be deducted at 3% as the sum exceeds the threshold limit of Rs 30,000 in a single payment. The net payment that needs to be paid to ‘A’ is Rs 31,360, after deduction of TDS of Rs 640.

If payment 2 is Rs 24,000: No TDS is required to be deducted as the single payment is less than Rs 30,000, and the total payment made during the year will be Rs 56,000 (32,000 + 24,000), which is also less than the threshold limit of RS 75,000.

If payment 3 is 60,000: the TDS at the rate of 2% must be deducted from the total amount as the annual payment in the year exceeds Rs 75,000.

The total TDS required to be deducted is Rs 1680 when making a payment of Rs 60,000. The net revenue to be made to ‘A’ will be Rs 58,320.

Payment And Return Filing

Persons deducting TDS must deposit the TDS amount to the government and file quarterly returns with the TDS details removed.

TDS Deposit

The TDS deducted in salary or non-salary must be deposited within seven days from the end of the month in which TDS is deducted. However, TDS deducted in March is required to be deposited on or before 30 April.

The due date for deducting TDS under sections 194IA & 194IB – 30 days from the end of the month in which TDS is deducted.


TDS is required to be deposited using challan or form:

(Section 194IA) TDS on Purchase of property of Form 26QB

(Section 194IB) TDS on rent of the property of Form 26QC

Challan No./ITNS 281 for other TDS payments.

  • TDS can be deposited in any Authorized bank or online.
  • E-payment is compulsory for companies, and a person must get his books of account audited under section 44AB.
  • A separate challan needs to be entrusted for each nature of payment for which TDS is subtracted.

For example, you must deposit two forms for each section if TDS is deducted on the contractor fee and a professional fee.

TDS Return

A quarterly TDS return is required to be filed by the deductor. For filing return as different return forms are specified below:

  • In the case of Form 24Q for salary, the deductee can be a resident or non-resident.
  • In the case of Form 26Q, apart from salary, the deductee should be a resident.
  • In the case of Form 27Q, apart from salary, the deductee can be a non-resident, not an Ordinary Resident, or a Foreign Company.
  • In the case of Form 26QB for immovable property, the deductee should be a resident.
  • In the case of Form 26QC for Payment of Rent, the deductee should be a resident.

For the following Quarters; the due date for Form 24Q or 26Q are:

  • Apr to Jun: 31 July
  • July to Sep: 31 October
  • Oct to Dec: 31 January
  • Jan to Mar: 31 May

For the following Quarter; the due date for Form 27Q is:

  • Apr to Jun: 15 July
  • July to Sept: 15 October
  • Oct to Dec: 15 January
  • Jan to Mar: 15 May

Form 26QB and 26QC: It is a challan cum TDS statement that is needed to be filed under 30 days from the end of the month in which TDS needs to be deducted.

TDS - Tax Deducted at Source

TDS Certificate

TDS Certificate shows the amount of tax that the deductor has deposited. Deductor is required to issue a TDS certificate to the deductee within the specified time limit given in the below table. Such certificates have to be generated online using TRACES websites only. Deductor is required to deposit tax and file TDS returns to the government before requesting a certificate from TRACES.

Nowadays, individuals can quickly check the tax deposited via 26AS, so the importance of such a certificate has been reduced. However, it is better to collect the certificate from the deductor to make sure TDS has been deposited along with the correct reporting of the Deductee PAN.

The Nature of Payment and Due Dates

  • Form 16 for TDS on Salary: to be paid on or before 31 May of the financial year.
  • Form 16A apart from Salary: Within 15 days from the due date of furnishing TDS return.
  • Form 16B for Purchase of Immovable Property: Within 15 days of turning return cum challan (Form 26QB).
  • Form 16C for TDS on rent: Within 15 days of turning return cum challan (Form 26QC).

Provisions for Penalty

Under TDS, various penalties are applicable on the deductor, such as:

Interest on late payment of TDS to Government

Interest is chargeable on short payment/late payment of TDS. There can be the following scenarios:

  • When TDS is not deducted: The interest rate of 1% every month or part thereof for the period starting from when TDS is deductible or collectible until TDS or TCS is deducted/collected.
  • If TDS is deducted, but payment is made late: The interest rate of 1.5% monthly or part thereof starts when TDS is deducted or collected until TDS /TCS is paid.

The calendar month is considered in calculating interest; therefore, you have to pay interest for two months if you delay the payment by one day. For example, if TDS is deducted in July and deposited on 8 August, you must pay interest for two months, i.e., July and August. The total interest payable will be 3%.

Penalty on the wrong/late filing of TDS return:

  • Rs 200 per day as a Late filing fee (section 234E).
  • The penalty of Rs. 200 per day is payable for any delay in furnishing the TDS statement.
  • The total late filing fees should not surpass the total amount of TDS reported in return.
  • A Penalty ranging Rs 10,000 to Rs 1,00,000 (section 271H).
  • Delay in filing TDS statement for more than a year from the due date of filing such TDS return.
  • If a TDS statement is not filed within a year from the due date of furnishing of TDS return, a minimum penalty of Rs 10,000 to Rs 1,00,000) can be levied. The liability under this section will be in addition to the late filing fee under section 234E.
  • Incorrect furnishing details in the statement filed like PAN, Challan and TDS Amount, etc. – Section 271H also covers filing faulty TDS/TCS return cases. Similarly, a minimum penalty of Rs 10,000 (which can go up to Rs 1,00,0000) can be levied.

Penalty on late issuing of TDS Certificate: A penalty of Rs 100 per day shall be payable for any delay in issuing the TDS certificate. The total late issuing fees should not exceed the total amount of TDS reported in return.

Utility to Check the Amount Deducted and Credited to Deductee’s Account

You can quickly check the number of TDS that has been deducted from your receipts/incomes online.

  • Step 1: Go to income tax India e-filing.
  • Step 2: Then, for the income tax account, Log in or register.
  • Step 3: Select the option ‘View Form 26AS’ (Tax Credit) available under My Account.
  • Step 4: You will automatically be redirected to the TRACES website, where you are required to select the Assessment Year for which you want to check the TDS amount.

Details of Form 26AS

  • Tax deducted at source
  • The tax collected at the source
  • Advance or Self-assessment tax deposited by the assessee
  • Income tax refund issued by IT Department
  • Annual Information Return (AIR) of high-value transaction

Request for Non-Deduction or Lower Deduction

You can request the tax deductors not to deduct tax if your income stands below the basic exemption limit. The two ways of doing this are: –

Filing Form 15G/15H

  • A resident individual or HUF can file a declaration in Form 15G/15H for non-deduction of TDS. In this declaration, the deductee declares that his income is below the basic exemption limit at a particular financial year; no TDS should be deducted.
  • The deductee is required to file this declaration for each financial year.

Note: Form 15G applies to an individual, and Form 15H applies to senior citizens.

Application in Form 13 to Assessing Officer

Anyone can apply for a certificate for non-deduction or lower deduction to his assessing officer. If satisfied, a certificate to the deductee will be issued by the Assessing Officer.

Applying for a Refund

The only refund, i.e., Income Tax Refund, is an excess of tax already paid by TDS, TCS, advance tax or self-assessment tax less tax on your total income. You can get an additional tax refund only after filing your income tax return for that particular year.

In other words, there are no other methods to get a refund other than by filing an Income Tax Return.

TDS on DIvidend on Section 194

TDS On Dividend Section 194 | Exemption Limit, TDS Rate

TDS on Dividend Section 194: Deducting tax at source is required of the principal officer of an Indian company or a corporation that has made the requisite arrangements for the declaration and payment of any dividend (including dividends on preference shares) to a shareholder who is a resident of India. On this page, let’s learn everything about TDS on Dividend Section 194k in detail.

TDS On Dividend Threshold Limit

If the dividend is paid by any method other than cash, there is no deduction up to Rs. 5000. So the dividend threshold limit on TDS is Rs. 5000/-

When TDS Under Section 194 Is Deducted?

Tax is deducted at the time of crediting the money to the payee’s account or at the time of payment, whichever comes first. This means before making a dividend payment, any TDS applicable must be deducted.

When TDS on Dividend Is Not Applicable?

TDS is not required to be deducted if the following conditions are met:

  • Form 15G or 15H is used to declare dividends covered by section 115-O.
  • The amount of dividend paid or projected to be paid to a shareholder in a financial year does not exceed Rs. 2,500, and it is paid by account payee cheque.
  • Any dividend due to LIC, GIC, or any of their subsidiaries or any other insurer in respect of shares in which they possess or have a full beneficial stake.

TDS Rate on Dividend Section 194

The tax will be deducted at a rate of 10%. (7.5 percent w.e.f. 14.05.2020 to 31.03.2021). TDS will be deducted at a rate of 20% if the income recipient does not provide his PAN to the deductor.

Details TDS Rate
PAN Card Provided 10%
No PAN Card Provided 20%

Also, under Section 197, an assessee might request no TDS or a lower rate of TDS from the assessing officer.

TDS on Dividend for Resident Shareholders

  • If the dividend amount exceeds INR 5,000, the tax rate is 10% (now decreased to 7.5%)
  • In the absence of a PAN, the tax rate is 20%.
  • If Form 15G/15H is submitted, there is no TDS.
  • TDS is not required for certain insurance companies/mutual funds and AIFs.

TDS on Dividend for Non-Resident Shareholders

  • TDS Rate: 20% plus applicable surcharges and cess, or DTAA rates, whichever is more beneficial.
  • Surcharges are limited to a maximum of 15%.
  • TRC must be secured with a statement of PPT, beneficial ownership, and the absence of PE/POEM in India.

Note: The above pointers are applicable only for non-resident shareholders other than FPI.

TDS on Dividend for FPI

The TDS rate for FPI’s is 20% along with applicable surcharges and cess.

Compliance Requirements Under TDS Dividends

  • In the event of any payments to non-residents, filing TDS returns and issuing TDS certificates (Form 15CA) is required.
  • If a payment to a non-resident exceeds INR 5 lakhs, a CA certificate on Form 15CB is required.

FAQ’s on TDS on Dividend Section 194

Question 1.
Is TDS is applicable to dividends?

Yes, due to the elimination of the Dividend Distribution Tax (DDT), dividend income becomes taxable in the hands of investors, and tax deduction at source (TDS) becomes applicable on dividend payout under Section 194 of the Income Tax Act.

Question 2.
How can I claim TDS on dividends?

Yes, the deductee can claim credit for the tax deducted on Form 16A when submitting an income tax return.

Question 3.
How can I claim TDS exemption in dividends every financial year?

Form 15G can be submitted to the corporation or mutual fund paying the dividend by a domestic individual whose projected annual income is below the exemption limit to claim the TDS.

TDS Payment And Interest On Late Payment

TDS Payment And Interest On Late Payment | Due Dates, Late Filing Fees

TDS Payment And Interest On Late Payment: An employer’s TDS compliance requirements do not end with the deduction of taxes from salary. It is important for an employer will have to file quarterly TDS returns for tax deducted from pay. TDS Returns are quarterly statements provided by deductors to the Income Tax (IT) department. It keeps track of all TDS-related transactions over the course of a quarter.

The filing of TDS returns is not as simple as it appears. The IRS may issue a notice if there is any omission or misstatement of information. In this article, let’s understand how TDS payment is made and what is the interest attracted for late paying of TDS.

TDS Return Filing Due Date for FY 2020-21

The TDS payment due date for March 2021 has been extended due to the spread of the COVID-19 situation in the country. The extended TDS return due dates are tabulated below:

Month of Deduction Quarter Ending The due date for all deductors to pay TDS via challan(including govt. deductors) Due Date for filing of Return for the financial year 2020-21 for all the deductors
April 30th June 7th May 31st March 2021
May 7th June
June 7th July
July 30th September 7th August 31st March 2021
August 7th September
September 7th October
October 31st December 7th November 31st Jan 2021
November 7th December
December 7th Jan
January 31st March 7th Feb 31st May 2021
February 7th March
March 7th April (for govt. deductors)
30th April (for other deductors)

How To Pay TDS Online?

Follow the steps as listed below to pay TDS through the e-tax payment system:

  • Step 1: Visit the official website of ePayment for TIN – Click Here
  • Step 2: Move to the section “TDS/TCS” and click on “Proceed“.

tin website for tds payment

  • Step 3: A new page will open. Now enter all the details such as Tax Applicable (Tax Deducted/Collected At Source From), Payment Type, Mode of Payment, Tax Deduction Account No, Address and other details.
  • Step 4: A confirmation page would appear when the data is submitted. Now the taxpayer should validate the information given in the challan.
  • Step 5: Once the information is validated by the taxpayer, the page will be redirected to the bank’s net-banking page, where the payment will be made, as specified in the challan.
  • Step 6: Now the taxpayer will have to visit his/her bank’s net-banking page using the user-id and password provided by the bank to make the TDS payment.
  • Step 7: A challan counterfoil including the Challan Identification Number (CIN), payment details, and the bank name via which the e-payment was made would be provided after a successful TDS Payment. The counterfoil will act as evidence for the TDS payment made.
  • Step 8: After a week of making the TDS payment using the CIN produced, you can check the status of the challan via the NSDL-TIN website’s “Challan Status Inquiry.”

Late Fees for TDS Return

One will be fined Rs 200 each day (two hundred) till your TDS return is filed under Section 234E as TDS late payment fee. That is one will have to pay this fine for each day you are late until the fine equals the amount you are required to pay as TDS.

TDS Late Fee Payment Online Example:

If your payable TDS amount is Rs 5000 on May 13th, and you file your Q1 return on November 17th instead of July 31st. Counting to the 17th of November, the delay is 105 days.

So Rs 200 x 105 days = Rs 21,000;

But while this is larger than Rs 5000, you will only have to pay Rs 5000 as a late filing fee. In addition, you must pay interest for late TDS deposits.

What Is Interest On The Late Deduction Of TDS?

You must pay interest under Section 201(1A) if you fail to deposit TDS after deduction on time. From the date TDS was deducted to the actual date of deposit, interest is calculated at a rate of 1.5% per month. It’s important to note that this is should be determined on a monthly basis rather than by the number of days, thus a partial month counts as a full month.

Section Default Nature Due to COVID-19, interest subject to TDS/TCS amount has been reduced Period for which interest is to be paid
201(1A)(i) Tax is not deducted at source, in full or in part. 1% per month From the time when taxes are deductible until the time when they are really deducted
201(1A)(ii) Non-payment of tax, in whole or in part, after deduction of tax 1.5% per month
Only for due dates between March 20 and June 29, 2020, 0.75% per month or part of a month will be charged for remittance delays beyond the due date.
If the balance is not paid before the 30th of June, a standard interest of 1.5% will be charged.
From the date of deduction to the date of payment

TDS Payment Penalty

As a consequence of the lockdown, the government has waived all penalty provisions for the period between March 20th and June 30th, 2020, in accordance with Ordinance 2020.

However, a penalty equal to the amount that was deducted/collected or remitted may be levied within the normal course of business.

Prosecution of Section 276B

If a person fails to pay to the Central Government’s credit: he shall be punished with rigorous imprisonment for a term not less than three months but not more than seven years and a fine for the tax deducted at source as required by or under the requirements of Chapter XVII-B.

Penalty for Late Filing of TDS Return

  1. Fee for late filing (Section 234E): Until the TDS Return is filed, the deductor must pay INR 200. The penalty, however, should not exceed the amount of TDS for which a statement filing was necessary.
  2. Penalties (Section 271H): An individual who fails to file the TDS statement by the due date shall be subject to a minimum penalty of INR 10,000, which may be increased to INR 1,000,000 under this section. This penalty is in addition to the late filing charge imposed by Section 234E.

Note: Section 271H will also cover the cases of incorrect TDS Return Filing.

No Penalty Under Section 271H For TDS

If an individual meets the following conditions, no penalty under Section 271H will be imposed in the case of a late TDS/TCS return filing:

  • Late TDS return filing fees and interest (if any) to be paid to the credit of the Government
  • TDS/TCS return to be filed before the expiry of a one-year period from the stated due date
  • TDS/TCS return to be filed before the expiration of a one-year period from the specified due date

FAQs On TDS Interest And Penalty

Question 1.
What is the interest for late payment of TDS?

The interest rate will be calculated at 1.5% per month from the date of the deduction of TDS on the current deposit date.

Question 2.
Is there any penalty for the revised TDS return?

Yes, a minimum of Rs.10,000 and a maximum of Rs.1.00,000 penalty may be levied if the deductor/collector files the wrong TDS/TCS return.

Question 3.
What is the late filing fee for payment of TDS?

Until the TDS Return is filed, the deductor must pay INR 200. However, the TDS late filing fee should not exceed the actual TDS amount to be filed.

Section 194H TDS on Commission & Brokerage Analysis

Section 194H TDS on Commission & Brokerage Analysis

Section 194H TDS on Commission & Brokerage Analysis: As per Section 194H, any person who is not an individual or a Hindu Undivided Family and is responsible for paying any income by the way of commission(not being commission as referred to in section 194D) or brokerage to a person for his services(not being professional services) shall deduct income-tax thereon at the rate of 5%, at the time of credit of such income to the account of the payee or any other account by cash, cheque, draft or any other mode of transaction.

Commission or brokerage includes direct or indirect payment received or receivable by a person acting on behalf of another person. The payment may be received for:

  • Any services rendered that do not come under professional services.
  • Any service in the course of selling and buying of goods or materials.
  • Any service in relation to the transaction of assets or valuable article. This does not include securities.

The following transaction related to securities do not attract TDS deduction under Section 194H:

  • Brokerage or commission paid to underwriters.
  • Brokerage or  sub-brokerage paid on the public issue of securities
  • Brokerage paid on stock exchange transaction of securities.

Table of Content

Deductions Under 194H

Any person who is responsible for paying any income by way of commission or brokerage shall deduct income-tax thereon. This is only applicable to persons other than individuals or Hindu Undivided families.

TDS Deduction Under Section 194H

An individual or HUF is liable for deduction of TDS under section 194H if the total sales, gross receipts or annual turnover exceed:

  • Rupees One crore, in case of a business during the financial year immediately preceding the year in which the commission is to be credited or paid.
  • Rupees Fifty lakh, in case of an individual during the financial year immediately preceding the year in which the commission is to be credited or paid.

The deduction is made at the time of credit of such payment through cash, cheque, draft or any other mode of transaction to the account of the payee or any other account, which may be termed as a suspense account or by any other name at the time of translation.

The rate at which tax deduction under TDS is made is 5%, but w.e.f 14/05/2020 to 31/03/2021 this was reduced to 3.75%. This rate is not subject to any additional charge such as surcharge or health and education cess (@4%)and is deducted at a basic rate at the source. However, in case if the PAN is not quoted by the deductee, the rate at which tax deduction is made will be 20%.

The deduction has to be deposited on or before the 7th of next month for tax deducted from April to February and for tax deductions made in the month of March, the last day to deposit the deduction is 30th April.

TDS deductions under 194H are not applicable in the following cases:

  1. If the amount or aggregate amounts of such income exceed Rs.15000, to be paid during the financial year, then no deductions are made under this section.
  2. No tax deductions are to be made brokerage or Commission fees are paid by BSNL/MTNL to their public call office franchise.
  3. An application to the assessing officer for deduction of tax at NIL or lower rate under section 197:
  • Validate the PAN of the deductee by submitting the 197 certifications.
  • A valid certificate for the PAN, section, rate and the financial year must be mentioned in the statement field.
  • The correct certificate number should be mentioned in the statement.

Additional Pointers regarding TDS Deduction Under Section 194H

  • Any commission or supplementary commission received by travel agents from airlines is liable to TDS deduction under section 194H at the source.
  • Any discounts that are given under pre-paid scheme of getting a connection by a mobile cellular operator to its distributors in the course of selling SIM cards do not attract TDS deduction under section 194H.
  • Any advertise commission paid by Doordarshan to its agents or advertising agencies is subject to  TDS deduction under section 194H.
  • TDS deduction under section 194H is not applicable to discounts given to stamp vendors on bulk purchases.
  •  Payments made by television channels/newspapers to advertising agencies for booking or procuring of or canvassing of advertisement is defined as trade and not commission. Therefore, it does not attract any TDS deduction under section 194H.
  • Commission paid to an agent as bank guarantee commission is not applicable for  TDS deduction under section 194H as it is a banking charge for providing service and not commission.
  • Target incentive paid to dealers for the purpose of increasing sales does not attract TDS deduction under section 194H and therefore assess does not need to deduct tax at the source.
  • Any discount offered to distributors for promotion of sales does not attract  TDS deduction under section 194H.
TDS On Payment To Non-Resident Sec 195

TDS On Payment To Non Resident Under Section 195 for Technical Services, Immovable Property

TDS On Payment To Non-Resident Sec 195: In India, the Income Tax Act divides the taxpayers into two groups namely residents and non-residents of India. Thus the income tax rates and provisions vary from residents and non-residents of India. For the non-residents of India, the Income Tax Government India provides various provisions such as tax rates on royalties, interest, dividends, and capital gains earned in India. However, the officials of the income tax department also collect the Income Tax. The provisions of tax deduction at source (TDS) for any sum paid to non-residents come under Section 195 of the Income Tax Act.

In this article, let’s understand everything about TDS on payment to non-residents with & without PAN under Section 195 in detail.

What Is Section 195?

The Income Tax Act of 1961, Section 195, is mainly concerned with Tax Deducted at Source (TDS) for non-resident Indians. This section focuses on the tax rates and deductions that apply to all types of company transactions.

The first method of collecting taxes is through tax deductions at the source. The TDS on non-resident payments is covered by Section 195 of the Income Tax Act. On a day-to-day basis, this section identifies the tax rates and deductions on business transactions with non-residents.

The income is taxable under Section 195 of the Income Tax Act. Any amount is charged, and a remittance certificate is required. Any amount paid that has the character of income and gross amount, the total of which may or may not represent income or profits, is referred to be a sum subject to tax.

The Act enables a provision to avoid a revenue loss due to a foreign resident’s tax liability by deducting the equivalent amount from payments given to them at the source.

Who Is Liable To Deduct TDS Under Section 195?

Any person who falls under the following category will have to liable to deduct TDS under Section 195:

  • Non-Resident
  • Foreign Country

Payment Type On Which TDS Is Deducted

Non-Residents or Foreign countries are liable to deduct TDS on the following payments:

  • Interest excluding interest covered by sections 194LB, 194LC, or 194LD, or
  • Royalties, or
  • Any other sum chargeable under the provisions of the Income Tax Act

Time Of TDS Deduction for Non-Residents

The person responsible to deduct TDS must deduct TDS when one of the following scenarios happens:

  • At the moment of payment in cash, cheque, drafts, or any other manner, or
  • When income is credited to the deductee’s account

How TDS Under Section 195 Is Deducted?

The procedures for deducting TDS under Section 195 are as follows:

  1. TAN: Before deducting TDS, the buyer must first get a TAN under section 203A of the Income Tax Act, 1961. A TAN can be obtained by submitting a Form 49B application. Also, the form can be downloaded from the official website of the Income Tax Department.  The buyer should also have his own PAN number as well as the NRI seller’s PAN number.
  2. TDS must be deducted when making a payment to a non-resident. In the sales contract between the NRI seller and the buyer, the number of TDS deducted and the rate at which it was deducted should be mentioned.
  3. The buyer’s TDS shall be deposited via Form number or challan for TDS payment on or before the 7th of the next month in which the TDS was deducted.
  4. TDS can be deposited in banks that are authorised to collect Direct Taxes by the Indian government or the Income Tax Department. The buyer is responsible for the deposit.
  5. The buyer must electronically file a TDS refund by completing Form 27Q after the TDS has been deposited.TDS returns are filed every three months.
    • TDS deducted in the first quarter, from April 1 to June 30, must be filed by July 15th.
    • TDS must be filed on the 15th of October for the second quarter, which covers from July 1 to September 30.
    • TDS deducted in the third quarter, from October 1 to December 31, must be filed by January 15th.
    • TDS deducted in the fourth quarter, from January 1 to March 31, must be filed by May 15th.
  6. Buyer can offer TDS certificate or Certificate of Deduction of Tax (Form 16A) to NRI seller after TDS returns have been filed. Within 15 days of the due date for TDS returns for the quarter, this certificate should be issued to the seller.

Rate of TDS Under Section 195 For Non-Residents

Surcharge and education cess at the prescribed rate must be included in the rates prescribed by the Income Tax Act. There is no need to add a surcharge or education cess if the payment is done according to DTAA rates. The following are the TDS rate for Non Residents under section 195:

Details TDS rates
Income from a non-resident Indian’s investment 20%
In the case of an NRI, income from long-term capital gains is taxed under Section 115E 10%
Long-term capital gains are a source of income 10%
Section 111A short-term capital gains 15%
Any other income from long-term capital gains 20%
Interest on money borrowed in a foreign currency is due 20%
Income from royalties paid by the government or an Indian company 10%
Income from royalties, but not the kind of royalties referred to as being payable by the government or an Indian enterprise 10%
Fees for technical services paid by the government or an Indian company 10%
Any other sources of income 30%

Section 206AA

The payee must provide his PAN to the payer under Section 206AA (deductor). The payer will be liable to deduct TDS at higher rates if the payee fails to provide the PAN. Non-residents and foreign corporations, on the other hand, were having difficulties since they lack a PAN in India.

The Finance Act of 2016 made section 206AA lesser applicable to payments to non-residents in the form of interest, royalties, fees for technical services, and payments on the transfer of any capital asset. If the following information is provided to the deductor, Section 206AA will not apply to such non-residents:

  • Name, email address, and phone numbers must be provided by the payee (deductee).
  • The deductee must provide the address of his residence in the country/specified territory outside of India.
  • If the law of that nation or specified territory allows for the issuance of such a certificate, the deductee must present a Tax Residency Certificate stating that he is a resident of that country or specified territory.

FAQs on TDS On Payment To Non-Resident Under Section 195

Question 1.
Is TDS deducted on foreign payments?

Yes, TDS is deducted on foreign payments.

Question 2.
What is the TDS on payment to non-resident for an immovable property?

TDS is deducted at 1% at the time of depositing such sum to the transferor’s account or at the time of payment of such sum, whichever comes first, on the sale of immovable property.

Question 3.
How much TDS to be deducted on the purchase of property from NRI?

When an NRI sells the property, the buyer must deduct TDS at a rate of 20%. A TDS of 30% will be applied if the property is sold within two years of purchase (reduced from the date of purchase).

TDS Rates

TDS Rates | TDS Rate Chart and Salary Rate

TDS Rates: Tax Deducted at Source, is known as TDS. It is a tax where one is responsible for the deduction of tax for certain rendered services. The tax gets deducted from the total payment amount that goes to the government for various activities like infrastructure development, defence, etc. Depending on the type of service, a specific tax (TDS) is imposed that the payee is expected to deduct.

TDS Rate on Salary

An employer can deduct tax at the source while paying to the employee and deduct tax from salaries at the time of payment. TDS will get deducted if an individual’s total income is taxable. However, and not get deducted if the total income is 2,50,000. This amount will be applicable to men and women who are below 60 years.

TDS deduction rate on salary starts from 5% to 30%, which is equal to the applicable income tax slabs.

TDS Rate Chart

Section number For the payment of Individual Others
192 Salary Tax Rate N/A
192A The payment of the balance due to an employee under the Employees Provident Fund Scheme, 1952 10% 10%
193 Interest on Debentures 10% 10%
194 Deemed Dividend 10% 10%
194A Interest other than on securities 10% 10%
194B Winnings from lotteries/ games 30% 30%
194BB Winnings from horse race 30 30
194C Payment to contractor 1 2
194D Payment of Insurance Commission 5 5
194DA Payment under Life Insurance Policy 1 N/A
194E Payment to non-resident sportsmen or sports association 20 20
194EE Payment of NSS deposits 10 N/A
194F Repurchase of units by Mutual funds or UTI 20 20
194G Commission on sale of lottery tickets 5 5
194H Commission or brokerage 5 5
194I Rent of land, building and furniture 10 10
194I Rent of plant and machinery 2 2
194IA Purchase of immovable property 1 1
194IB Rent payable by an individual 5 5
194IC The payment of monetary consideration under Joint development agreement 10 10
194J Professional services 10 10
194LA Compensation on acquisition of immovable property 10 10
194LB The payment of interest on infrastructure debt fund to non-resident N/A 5
194LBA Income from specific units of a business trust. 10 5
194LBB Investment fund that pays an income to a unitholder (other than income which is exempt under section 10(23FBB) 10 10
194LBC Investment income in securitization trust. 25 30
194LC Payment of interest by an Indian company in respect of money borrowed in foreign currency under a loan agreement N/A 5
194LD Payment of interest on a rupee-denominated bond of an Indian company or Government securities to a foreign institutional investor N/A 5
195 Others sums Average rates Average rates
196A Income in respect of units of non-residents N/A 10 for company, and 20 for person
196B Income from units (including long term capital gains on transfer of such units) to an offshore fund N/A 10
196C Income which comes from foreign currency bonds or GDR (including long term capital gains on transfer of such bonds) N/A 10
196D  Income of FIIs from securities N/A 20

Notes: No surcharge or education cess is levied on payments made to residents (Individuals / HUF / Society / AOP / Firm / Domestic Company). However, education cess is charged in case of salary.

TDS at a higher rate of 20% or TDS rate, whichever is higher, must be deducted if the deductee fails to provide PAN to the deductor.

If any taxpayer does not comply with the TDS rules, they will be liable to pay penalties in the form of and interest will be imposed on the principle taxable amount.

TDS on Commission or Brokerage Section 194H

TDS on Commission or Brokerage Section 194H Of Income Tax Act

TDS on Commission or Brokerage Section 194H: The provision for a tax deduction on earnings as commission or brokerage by a resident individual is underlined in Section 194H of the Income Tax Act. However, the commission collected from insurance sales is not included in this section. A resident individual or HUF required to pay any commission or brokerage (excluding insurance commission) is eligible for a tax deduction under section 194H. TDS must be deducted at the time of payment, whether in cash, by cheque, or by draft. The current TDS rate that applies under section 1194H is 10%. On this page, let’s understand everything about TDS on commission and brokerage for FY 2021-22 in detail.

What is Section 194H?

  • Section 194H is concerned with income tax imposed on any income derived from a brokerage or commission by any person liable to pay a residence.
  • Individuals and HUF are required to deduct TDS if they are covered by section 44AB.
  • The insurance commission mentioned in section 194H does not exist.
  • TDS under Section 194H will be deducted when such income is deposited in the payee’s account or any other provided account.
  • It can be paid in cash, cheque, or DD, whether it’s called a suspense account or anything else at the moment of disbursement.

TDS on Commission and Brokerage

TDS on commission or brokerage must be deducted by all types of entities, including individuals and HUFs, that fall under the scope of tax audit under Section 44AB, i.e., whose turnover or annual revenue exceeds 25 lakh and exceeds 1 crore (as applicable according to the income tax slab).

  • Over and above the TDS amount at a defined rate, no additional surcharge or education cess is necessary. Thus the TDS is taken at a flat rate of 10%, including service charges (if applicable).
  • The number of TDS deducted under section 194H must be submitted with the government prior to the due date of the payment by the entity responsible for TDS deduction.

When TDS under Section 194H is Deducted?

TDS on Commission/Brokerage is needed to be deducted by the individual making the commission or brokerage payment under Section 194H. TDS on commission/broker must be deducted at a rate of 10% at the time of:-

  • Making such a payment or
  • Crediting such income to the payee’s account in the books of the person who is deducting TDS

whichever comes first.

Commission and Brokerage Meaning

Any payment is considered a commission or brokerage.

  • directly or indirectly,
  • received or receivable, OR
  • by a person acting on behalf of another person

What does TDS on Commission and Brokerage include?

The TDS on commission and brokerage includes:

  • For services performed which are not professional
  • For services rendered in the process of purchasing or selling a product
  • Connection with any transaction involving any asset, valuable article, or thing, except securities

TDS on Commission and Brokerage Expectations

TDS on commission and Brokerage will not be deducted under the following cases:

  • During the financial year, the total amount paid or payable does not exceed Rs. 15000. (Limit increased from Rs. 5000 to Rs. 15000 in Budget 2016)
  • An employer compensates his employees with a commission. Under Section 192, such commission is liable to be deducted as TDS on salary.
  • TDS on the Insurance Commission will not be deducted under this provision because it is particularly addressed in Section 194D.

Section 194H TDS Rate FY 2020-21

TDS is present at a rate of 5%. For transactions between 14 May 2020 and 31 March 2021, the charge is 3.75%. There will be no surcharge, education cess, or SHEC added to the above rates. As a result, the basic rate of tax will be deducted at the source. If the deductee does not quote his or her PAN, TDS will be applied at a rate of 20% in all cases.

When TDS under 194H is not Deducted?

  • If the amount or aggregate amounts of such income to be credited or paid during the financial year does not exceed INR 15,000, no deduction will be made under this clause.
  • Under section 197, a person can apply to the assessing officer for a tax deduction at a rate of NIL or a lower rate.

TDS Time Limit for Depositing

Taxes deducted from April to February must be deposited on or before the 7th of the following month. Taxes deducted in March must be deposited on or before the 30th of April.

For example, tax deducted on April 25th must be deposited by May 7th, while tax deducted on March 15th must be deposited by April 30th.

How to Deduct TDS at Lower Rate?

The individual whose tax is deducted can apply to the assessing officer under section 197 for a NIL rate or a lower rate of tax deduction.

  • Validate the deductee’s PAN by submitting a 197 certificate.
  • The Certificate must be valid for the PAN, Section, Rate, and relevant financial year specified in the filed statement.
  • Check that the certificate’s threshold limit has not been exceeded in previous quarters.
  • The statement should include the correct certificate number. 3XXXAH7X is an example of a correct certificate number.

FAQs on TDS on Commission and Brokerage

Question 1.
What is the limit to deduct TDS u/s 194H?

The threshold limit for TDS deduction for commission/brokerage is Rs.15,000 under Section 194H.

Question 2.
What is the TDS rate for brokerage?

The TDS rate on commission or brokerage received except for Insurance Commission is 5%.

Question 3.
Who is liable for Tax Deduction At source under Section 194H?

Individuals who make money from commissions or brokerage are required to deduct tax at the source under section 194H.

How to Make Payment of TDS

How to Make Payment of TDS?

How to Make Payment of TDS?: Tax Deduction at Source is the system where the tax or TDS gets deducted, and TDS payments happen online. The deduction of tax is during the time of making a few payments such as interest, rent, commission etc. The individual making such specified payments is responsible for deducting the TDS and making the TDS payment, as well as paying the balance amount to the individual entitled to receive such compensation.

The entire list of such specified payments, along with the TDS rate to be deducted, can be accessed in the TDS rate chart.

Steps for Making Online TDS Payment

The amount of TDS deducted must be deposited to the government within the due dates specified by the individual removing the TDS. The procedure for making TDS payments online is:

Step 1: Visit the NSDL’s website for the e-payment of taxes.

Step 2: Click on the option ‘CHALLAN NO./ITNS 281’ under the TDS/TCS section. One is going to be directed to the e-payment page.

  1. Under ‘Tax Applicable,’ select the ‘Company Deductees’ if the TDS deducted by one is when making payment to a company. In any other scenario, select the option ‘Non-Company Deductees’.
  2. Enter the TAN as well as the Assessment Year for which the payment has been made.
  3. Enter ‘Pin Code’ and select the ‘State’ from the drop-down.
  4. Select whether one has made the payment for the TDS deducted and payable by an individual or TDS on the regular assessment.
  5. Select the ‘Nature of Payment’ also the ‘Mode of Payment’ from the drop-down menu.
  6. Click on the ‘Submit’ option.

Step 3: On this page the following details have to be entered

Step 4: On submission, a confirmation screen is going to be displayed. If TAN is valid, the taxpayer’s full name as per the master is going to be displayed on this confirmation screen.

Step 5: On the confirmation of the data entered, one is going to be directed to the net banking site of their bank.

Step 6: The taxpayer must log in to the net banking site with the user id and password provided by the bank and make the payment.

Step 7: On the successful payment, a challan counterfoil is going to be displayed containing the CIN, the payment details and bank name via which e-payment has been made. This counterfoil is proof for the payment made. After payment of TDS, one has to file their TDS return.


Online Correction Facility to AddModify Deductee in TDS Return

Online Correction Facility to Add/Modify Deductee in TDS Return

Online Correction Facility to Add/Modify Deductee in TDS Return: TRACES or the TDS Reconciliation Analysis and Correction Enabling System of the Income Tax Department provides online correction of already filed TDS returns. If you need to modify your TDS returns after submission, this article will help you file revised TDS returns.

The Provision of Online Correction to Modify or Add Deductee Details in TDS Return

Filing for TDS returns is a necessary process that needs to be completed and submitted for each quarter in a fiscal year.

The following corrections can be made in an existing filed TDS return –

  • PAN correction
  • Challan correction
  • Resolution for overbooks challan (move a deductee row from challan)
  • Add a new challan to statement
  • Addition or deletion of salary details
  • Addition or modification of deductee details
  • Any personal information

The online feature enables to add or modify any deductee details if the deductor –

  1. Wants to make modifications in deductee details.
  2. Intends to add a new deductee row against a challan with an available balance.

Note: This functionality is available from F.Y 2013-14 onwards with DSC.

Advantages of Online Correction

The online correction feature is handy as –

  1. TRACES charges no fee for online correction.
  2. One can instantly start working, and the correction is generally processed in 24 hours.
  3. All the modifications can be done online, and no extra software is required.
  4. A specific correction mechanism is available for each error that makes the process hassle-free for the users.

Step by Step Process to Add or Modify Deductee Details in TDS Return

Step 1: Login into the TRACES website.

Step 2: Select option Defaults followed by Request for correction.

Step 3: Choose the period for which you want to file the correction. Use the option of Online in the Correction Category and click on Submit.

Step 4: The system generates a request number. Select Go to Track Correction Request or select option Defaults, followed by Track Correction Request.

Step 5: A list of all the corrections along with their status get displayed. Click on the option of Available to work on the correction request.

Step 6: Choose the KYC option (digital signature or without digital signature).

Step 7: Once the validation is completed, you get an authentication code that will be used to validate the KYC again, and it will work only on the same day of the same financial year. Finally, click on Proceed with Transaction button.

Step 8: Select the option of Modify/Add Deductee Details under Type of Correction and click on the View Details button.

Step 9: There are three options on the top of the screen –

  • Default Deductees
  • All Deductees
  • Add New Deductees

Step 10: Default deductees show those deductees who have any defaults. Select a specific row and click on Edit Deductee Row to make changes.

Step 11: All the details relevant to the row are shown below. Make the changes required in the record and click on the Save button. The following changes can be made in the deductee records –

  • PAN of the deductee
  • Date of payment or credit
  • Amount paid or credited
  • The section under which TDS deducted
  • Date of deduction
  • The TDS deduction rate
  • Tax
  • Surcharge
  • Education Cess
  • Reason for non-deduction, lower-deduction, grossing up or higher deduction

Step 12: In the All Deductee option, all the records which have been updated show in highlighted row colour.

Step 13: The Add New Deductee tab can be used to add a new deductee. Once you click on the New Deductee tab, it will display all the challan with the available balance. Select the challan (with available credit)

and click Add Deductee Row button.

Step 14: Enter the following details for the new deductee and click on the Save button.

  • Deductee Code (01 for a company and 02 for apart from a company)
  • Details of PAN
  • Date of payment or credit
  • Amount paid or credited
  • Section
  • Date of deduction
  • Total tax deducted
  • Total tax deposited
  • The TDS deduction rate
  • Reason for non-deduction, lower-deduction, grossing up or higher deduction

Step 15: Once all the modifications are done, click on Submit to Admin button.

Step 16: Admin can now submit the modified statement for processing from the option Defaults followed by Ready for Submission. Admin can select the option to cancel the statement as well.

Step 17: The user can then check the status of the statement submitted. To track the status, click on the Defaults option, followed by Track Correction Request.

Status of Request or Process Being Showed During Online Correction

  • Requested: When a request for correction is submitted by the user.
  • Initiated: The request is under processing by TRACES.
  • Available: The request for correction is accepted, and the statement is now available for modifications.
  • Failed: Request cannot be completed due to a technical error. However, the user can re-submit the request for the exact details.
  • In Progress: The user is currently working on the statement.
  • Submitted to Admin User: Sub-user or Admin User has submitted correction statement to Admin User.
  • Submitted to ITD: When the Admin User submits the corrected statement to ITD for processing.
  • Processed: Statement is being processed by TRACES (either for defaults or for Form 26AS).
  • Rejected: Statement is rejected after processing by TRACES. Also, the rejection reasons are shown in the ‘Remarks’ column.