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 likely that TDS will be payable u/s 194 C in next months, which will be more than 3000.
In this situation ,we should deposit a additional 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.
- Update :Now Inter-section tds can be adjusted easily through return and no need to deposit tax section wise.Further excess tax can aslo be adjusted one year before or one year after date of deposit. Read here more
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.