Last updated: March 30th, 2020 2:40 AM

TDS Correction Statement

Tax deduction at source is an income tax provision wherein taxpayers making certain payments such as salary, commission, professional fees, interest, rent, and other specified payments are obligated to deduct a percentage of tax before remitting the final payment. The deductor of taxes is further required to furnish a statement of TDS for a given TAN, form, financial year and quarter. The changes or updates made to the original statement are known as a correction statement. However, in case of any corrections in TAN, the assessee will be required to contact the Assessing Officer to make the necessary rectifications. Taxpayers should note that the corrections can be updated in the TDS returns within three days of filing. Also, the taxpayer’s option to file the correction statement is not limited, since modifications in TDS returns can frequently be made to draft the changes in the original TDS report. In this article, we briefly describe the concept of a TDS correction statement.

Identification of Defaults

The defaults can be identified by logging into the TRACES website and selecting the option of “Defaults” which can be found for each quarter and financial year. These defaults will be classified into various categories such as short deduction, short payment, late payment and late deduction. The screen will also depict the interest for such defaults.

Downloading of TRACES Files

In the event of any default, a request should be made to access and download the TDS Conso File and Justification Report on the TRACES website. The request is processed by furnishing the normal KYC (Know Your Customer) or through the digital signature registered in the portal. Upon acceptance of the result, the files can be downloaded under the “Request Downloads” option.

Circumstances of Correction

A few of the mistakes prone to be committed while filing the original statement are the following:

• Specification of an incorrect TAN number in the Challan and Statement.
• Mismatching of the specified Challan Identification Number (CIN).
• Incorrect declaration of PAN numbers or the details of the employee/employer.

Types of Corrections

The following are the different types of corrections that can be made in the form:

• C1 – Corrections in details of the deductor, other than TAN Number.
• C2 – Corrections in challan/deductor details.
• C3 - Corrections in deductor details and/or challan details and/or deductee details, other than PAN number.
• C4 – Corrections in salary details.
• C5 – To update the PAN of the deductee.
• C9 – Addition of Challan and pertinent deductions.

Procedure for Correction

The correction can be enacted by following the procedures specified below: Step 1:- Download Download the particular TDS/TCS file for the applicable TAN. Step 2:- Import and Formulate Import the consolidated TDS/TCS file and formulate the Correction statement based on the applicable category. Step 3:- Key in the Details Enter the provisional receipt number of regular and previous correction statements. Step 4:- Validate the Statement The formulated correction statement should be validated through File Validation Utility (FVU). Step 5:- Furnish the Statement The validated correction statement can now be furnished either with the respective TIN-Facilitation Centres or through the NSDL website.