Tuesday, March 24, 2009

TDS Deposited in wrong Section-How To correct.

on Tuesday, March 24, 2009

Basic question with us How to adjust TDS amount if we have wrongly deposited in other section ?

 NSDL has issued a list of Inconsistencies (given below) regarding ETDs return and mismatch or Challan in etds return ,and corrective action required against each error.In this List incorrect section error has not been shown .So in my view while matching the CIN(challan identification number) from etds return filled by deductor with data of challan uploaded by the bank ,Nsdl does not give importance to section under which tax is deposited.

However ,if any situatation arises ,then we should adjust the tax with in same section as far as possible instead of adjusting the tax with other section in same assessment year.

Suppose: A has wrongly deposited 3000 tax in section 194 J instead of section 194C in the month of October,2008 .Tds payable for section 194 C is nil for october but it is likeley that TDS will be payable u/s 194 C in next months, which will be more than 3000.

In this situation ,we should depsoit a addtion amount for 194 J for the month of October .and adjust the excess tax deposited u/s 194C against the tax payable in Next months . but this suggestion is very difficult to adopt if amount is huge .In that case the below action is better.

List of Inconsistencies and corrective action required against each error(in table below)

so on the basis of point wise answer to queries is given hereunder.

Query 1:In our company, they paid TDS for Rs. 15331/- under 194 I in the m/o Nov 2007, whereas the liability is Rs.14878/- for the m/o Oct 2007. In the same month the liability under contractors is Rs.12325/- whereas they made payment for Rs.11872/- under 194 C. Now can we adjust this excess payment made under 194 I with Less payment made under 194 C.Note : Entries made by predated, so thats y the diff occurs. And the Excess payment under 194 I was shown in the Returned filed.

Ans:As per details provided by you this transaction relates to a period Oct 2007,for which you have already have furnished the returns for that period ,Assessment year for period 2007-08 is also near to close ,so now at this time no benefit to revise the return.The only remedy left to you that on receiving notice from the ITO (if any), explain your situation and got the excess TDS adjusted against section 194J.If above query is related to October 2008 then you know the details about "how to fill Etds return if excess Tds deposited earlier" from my earlier post given in the link.

Query 2:I have made a mistake while depositing TDS, instead of depositing TDS under 194J wrongly I have prepared challan Under 194A request you to please tell me, that what corrective actions are to be taken in regards to this to change the data in NSDL.also if I file e-tds returns considering TDS Challan as 194 J and also issue TDS cert to the parties Under 194J what are the repercussion.

As explained above NSDL has not given such error in inconsistencies List so we can assume that such errors are being ignored by them ,hence no action required .But I have not done practical of this yet.so my suggestion to you go far Etds return with section 194J and issue certificate
(form 16A) to deductee as there is no remedial action suggested by the department.If any problem arises at later stage then you can explain it as there is no malafide intention.The main problem in this action is as per new Income tax rules that Due tax credit to the deductee can be denied if etds return does not matched with the Bank data.
Further deposit in incorrect section ,if this error is added in the error List at later stage ,power to correct the same will be given to Assessing officer ,Like given for incorrect Tan in above List.

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  1. I have paid TDS worth Rs. 4500/- wrongly in Challan as 94J (professional fees) for the 4th quarter Jan2012 to March2012. Actually there was no TDS for the same. How can i get refund. How can i adjust as all the TDS for the same Quarter have been paid and i have Paid Excess Rs. 4500/- in Challan. Kindly help regards same as i have to file 4th Quarter return yet



    1. First thing you can do it adjust this tds through other section ,apply to your Assessing officer about change of section . This can be done through procedure given here
      Further refund process is given here

  2. Dear Sir,

    Tds payment to be paid Rs.20225 + Interest Rs.910 in Oct for the month of Aug'2013. The But i wrongly paid Rs.20225 tds + Rs.21,135/- interest instead of Rs.910/- How can i adjust the interest amount. please suggest.


    1. The interest in tds return is assigned on the basis of Etds return and not on the basis of challan ,so while filing the etds return assign 910 as a interest only .Balance payment may be adjusted in future period

  3. For 194J setion we have paid ampunt under Non company deductees (0021) instead of Company deductees (0020). What is the solution to rectify it?

  4. Sir,

    I have made tax payment in ITNS 281 instead of 280 of amount 6810.
    Plz let me know the solution for this.Now i have received demand for assessment year 2013-14.

    1. The above can not be done.As to file itns 281 valid TAN number is required and you have filed pan ///Error may be lying elsewhere.

  5. Sir i am getting Rs.50000 Pm as salary from a Hospital total Rs.300000 in that year (6months only) But my employer has deducted TDS Rs.10000 U/s 194J by considering Rs.100000 as consultency Charges and Rs. 200000 as Salary. No TDS deducted U/s 192. I received entire amount as salary only i didnt get any consultency charges. Please help me how should i file Income tax return. Shal i file entire amount under the head Salaries or Rs.100000 under PGBP and Rs.200000 under the head salaries? and also tell me the consequences and procedure to correct the above mistake for my deductor

    1. You should file ITR-4 and file 200000 as salary income and one lakh as PGBP. You May deduct exp. incurred to earn the consultancy Income from one lakh income like travelling exp,Telephone exp..

      Further you can show your saving u/s 80C if any and claim refund by filing return.

      As deductor has already done this intentionally. There is no method to correct the same and you should live with it.

  6. Very good article. Very important question/query i have.

    Some company have wrongly deposited around 25k TDS u/s 194j in my PAN number account and i can see it in my form 26AS. I am salaried person. What should i do? Shall i use that TDS as my tax liability and i should pay only remaining amount of my tax liability after deducting 25k?

    Expecting response.


    1. First of you should confirm your self that these amount does not relates to you. Means what ever the amount deducted by your employer is shown in the 26AS and the said amount is in addition to your actual deduction .

      Secondly ,you should not use this amount in your tax liability because when actual deductor/deductee realise the mistake ,which going o happen later or sooner,then he will correct his mistake and amount will be deleted/removed from your account.

      Further ,my suggestion to you is ,you should check the details of tan from incometaxindiaefiling.gov.in and ask him to take n/a so that credit passes to correct person.
      If further query ,then pls ask .

    2. sir, this amount is in my account since last may. I don't think they'll realise anytime soon. If it would have been then would have been by now. don't you think so?

    3. Generally ,people check the 26AS credit at the time of filing of Income tax return.Returns for this period is yet to be finalised ,so we think you should not fall in to the problem by claiming tax credit wrongly.Further you should again check the deductor details from 26As and income tax website and confirm your self that this amount does not pertains to you ?