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Income tax department has started processing of each and every eTDS statement in terms of section 200A. If there is any default, the same is available in the TIN web site.

How to view the defaults

• Visit www.tin-nsdl.com
• Login->TAN
• Click “Default”
• You will be able to view a table containing Financial Year, Form No, Quarter and a link to download file containing defaults

File format

• If the number of records is small, the file is in Excel format and without any password
• If the number of records is very large, the file is ^ delimited text file and a format is given.

Various defaults

• The file contains three type of defaults
• Short Deduction
• Short Payment
• Late Payments
• Each of the above is discussed in details

Analysis done by Fast Facts

Fast Facts team has done detailed analysis of several notices and the findings are given below for the benefit of our readers.

Late Payment Cases

• For each deductee record, date of deduction is displayed
• Due Date  is  worked out based on Provision and Non-Provision transactions
• Late Payment interest amount is calculated as per provisions of income-tax Act and Rules
• There is a column “Interest on Late Payment of Interest” , which is not filled. Possibly in future , this will also be calculated and shown
• If any amount of Interest is paid thru challans, the same is deducted from total interest and remaining amount is shown

Short Deduction Cases

• Short deduction = Amount deductible as per Tax Rate Flag Less Amount deducted
• For a deduction record “Tax Rate Flag” is shown as follows

“P” – Tax deducted at prescribed rate as per Income Tax Act

“L” – Tax deducted at lower rate as specified in the return.  For sections having sub-sections, tax rate basis is assumed to be “L”

“H” – Higher Rate

• Based on “Tax Rate Flag”, amount deductible as  calculated is shown
• Amount deducted is subtracted from amount deductible to show “Short Deduction Amount”

Above two cases are explained in detail

• In the first case, Amount deductible is worked out by applying applicable rate of 10.3% on Rs. 19950 = 2054.85. Actual amount deducted is Rs. 2009. Hence there is a short deduction of  Rs. 45.85.
• In the second case, everything appears to be correct. But the PAN given is not found in the income-tax database. This is reflected in “Tax Rate Flag” – H. Hence a penal rate of 20% is applied to Amount paid to arrive at amount deductible.
• Fast Facts  team also found that such cases where PAN is not found in income-tax database,  Form 16A is also not issued by the TIN system.

Short Payment

• These are simple cases, where amount deposited is less than amount deducted

In a separate article , Fast Facts Bulletin will explain what corrective actions are to be taken in response to the defaults and what precautions to be taken to avoid generation of such default notices.