Home » Short Deduction Notice » No Notice for minor amounts of short deduction of TDS

No Notice for minor amounts of short deduction of TDS

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This news is a great relief for thousands of tax deductors , who have been getting notice from ITO ( TDS) in respect of short deductions in TDS amounts.

The Board has decided that minor amounts of short deductions will be ignored.  These cases are :

  • A deductee having short deduction of less than Rs. 10 AND
  • Where total short deduction for the return is less than Rs. 100

The relevant instruction is reproduced below :

INSTRUCTION NO. 8/2010  DATED 8-12-2010

In the present system of processing of e-TDS returns, the returns are processed online and mismatch report showing defaults on various accounts is generated.

Based on this mismatch report, the assessing officers issue show-cause notices to the deductors and take follow up actions.

It has come to the notice of the Board that substantial number of TDS returns are pending where the deductee-wise default on account of short deduction of tax is less than Rs. 10.

This issue has been considered by the Board and it has been decided that:

(i)  where the default on account of short deduction is less than Rs.10 for each deductee, the demand is round off to zero; and

(ii)  after considering (i) above, deductor-wise demand/default, if any, of Rs.100 or less will also be ignored for further action.

However, the DDOs in such cases may be warned to be careful in future so as to ensure that they do not become habitual in short deduction of tax.

Earlier Instruction No. 11/2007, dated 18-12-2007 issued under F. No. 385/56/2007-IT(B) on the subject stands superseded by this instruction.

These instructions shall apply to all TCS/TDS cases under all Direct Tax Enactments. These instructions will come into force immediately.





1 Comment

  1. kgs says:

    a) how deductor has to deduct tds if bill contains material and labour charges?

    b) in this case, if we have to pay advance amount to party, then how we have to calculate tds?

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