This document summarizes common errors and solutions related to filing TDS returns on the TRACE portal. It discusses 9 problems people commonly face including old demands not being cleared after filing correction returns, interest adjustment issues, section head issues when filing multiple quarters, and PAN correction issues. For each problem, it provides the background, example cases, and step-by-step solutions to resolve the demands and file accurate correction returns. The document aims to help users better understand the TRACE system logic and correctly handle various TDS filing scenarios.

1. Trace – Challenges
and solutions
dk bholusaria
dk@bholusaria.com

2. Objective of this presentation

3. We will discuss…
• Recent changes and services available on
trace
• Common default errors and solutions
• Queries of house
• Summary

4. Recent changes and services

5. Recent changes and services
• TDS not required to be deducted on service tax
portion
• Facility of online correction of challans without
digital signature
• Facility to verify section 197 certificate
• Transaction report for Non-residents without
PAN
• Online request for resolution and its tracking
• Declaration for Non – Filing of e-tds return

6. Common default errors and
solutions

7. 1: Old demands
Problem # 1:
• Recently received a demand notice for FY 2008-2009
• Justification report downloaded is based on original e-
TDS return
• Correction returns filed are either not considered or
partially considered
• Interestingly consol file is latest one after considering all
corrections
How to delete this demand or get latest type of
justification report?

8. 2: Interest adjustment issues
Problem # 2: Demand of interest for X amount
Case 1: I had suo-moto deposited interest before filing return
and even considered challan in my TDS return
Case 2: I immediately deposited interest but demand still
not deleted OR
Now, do I need to intimate AO or file correction
return to get demand adjusted?
Case 3: I want to deposit interest but have no clue regarding
section head

9. Solution to problem # 2
Challan details:
Field Original
return
Correction
Return
Remarks
Serial No. XX XX
Section XXX XXX Put any – no relevance
Income Tax
Fee u/s 234E
Surcharge
Education Cess
Interest 9,000 9,000
Penalty
Other Amount Paid
TDS Interest
Amount
9,000 Amount entered here can not exceed amount of
Interest entered above
TDS Other Amount

10. 3: Demand u/s 221
Problem # 3:
• Demand of interest for X amount was raised by
TRACE on 01-04-2014
• Interest was deposited on 05-05-2014
• Correction return filed on 25-05-2014 and
processed on 05-06-2014
• Fresh demand of section 221 raised
Should I deposit this demand?

11. 4: Section head issues
Problem # 4:
• Audit for FY 2013-2014
• Auditor pointed out non-deduction for various
sections for all months of year
• Auditee deducted TDS on 10/Jun/2014 and
deposited entire tax for all heads in a single
challan u/s 194C
How do I use this challan in various quarters and
returns?

12. 4: Understand spread of challan…
Demands for various quarters and heads:
Quarter Head Amount
Q1 194C 9000
194I 1000
Q2 19H 9000
194I 1000
Q3 195 9000
194I 1000
Q4 92B 8000
195 1000
194I 1000
Total 40000
CIN: 0004329 14062014 00003

13. 4: Q1 and Q2 returns (presentation)
Sl# Section Income Tax + SC + EC Minor Code CIN
1 194J 40,000 200 0004329 14062014 00003
Sl# Name PAN Section Amount of
Payment
Amount
Paid Date
Tax Rate Income Tax TDS Date Challan Sl #
1 ABC AEKPA1234L 194C 9,00,000 01/04/2013 1 9,000 10/06/2014 1
2 AB (HUF) AEFHA9876Q 194I 10,000 01/05/2013 10 1,000 10/06/2014 1
Challan details in Q1-26Q
Deductee details in Q1-26Q
Sl# Section Income Tax + SC + EC Minor Code CIN
1 194A 40,000 200 0004329 14062014 00003
Sl# Name PAN Section Amount of
Payment
Amount
Paid Date
Tax Rate Income Tax TDS Date Challan Sl #
1 XYX P. Ltd AAACX1456F 194H 90,000 01/07/2013 10 9,000 10/06/2014 1
2 AB (HUF) AEFHA9876Q 194I 10,000 01/08/2013 10 1,000 10/06/2014 1
Challan details in Q2-26Q
Deductee details in Q2-26Q

14. 4: Q3 returns (presentation)
Sl# Section Income Tax + SC + EC Minor Code CIN
1 194J 40,000 200 0004329 14062014 00003
Sl# Name PAN Section Amount of
Payment
Amount
Paid Date
Tax Rate Income Tax TDS Date Challan Sl #
1 AB (HUF) AEFHA9876Q 194I 10,000 01/11/2013 10 1,000 10/06/2014 1
Challan details in Q3-26Q
Deductee details
Sl# Section Income Tax + SC + EC Minor Code CIN
1 195 40,000 200 0004329 14062014 00003
Sl# Name PAN Section Amount of
Payment
Amount
Paid Date
Tax Rate Income Tax TDS Date Challan Sl #
1 XYX AABCX4156Q 195 60,000 01/12/2013 15 9,000 10/06/2014 1
Challan details in Q3-27Q
Deductee details

15. 4: Q4 returns (presentation)
Sl# Section Income Tax + SC + EC Minor Code CIN
1 194BB 40,000 200 0004329 14062014 00003
Sl# Name PAN Section Amount of
Payment
Amount
Paid Date
Tax Rate Income Tax TDS Date Challan Sl #
1 AB (HUF) AEFHA9876Q 194I 10,000 01/01/2014 10 1,000 10/06/2014 1
Challan details in Q4-26Q
Deductee details
Sl# Section Income Tax + SC + EC Minor Code CIN
1 195 40,000 200 0004329 14062014 00003
Sl# Name PAN Section Amount of
Payment
Amount
Paid Date
Tax Rate Income Tax TDS Date Challan Sl #
1 XYX AABCX4156Q 195 60,000 06/03/2014 15 1,000 10/06/2014 1
Challan details in Q4-27Q
Deductee details
Sl# Section Income Tax + SC + EC Minor Code CIN
1 92B 40,000 200 0004329 14062014 00003
Sl# Name PAN Section Amount of
Payment
Amount
Paid Date
Income Tax TDS Date Challan Sl #
1 Satish CPAPG9999Q 192 1,60,000 31/03/2014 8000 10/06/2014 1
Challan details in Q4-24Q
Deductee details in annexure I

16. 5: Challan inter field issues
Problem # 5
• Actual liability: Tax – 50000, Interest – 2000
• In Challan: Tax – 51000, Interest – 1000
How do I use 2000 as Interest in return?
Should I deposit 1000 again?
Do I need to get challan corrected?

17. 5: Correct challan presentation
Challan details:
Field In
Actual Challan
To be reported
in return
Remarks
Serial No. XX
Section XXX XXX Put any – no relevance
Income Tax 51,000 50,000
Amount entered in actual challan has no relevance.
Amount entered in respective challan field of TDS
return will only be considered and processed as if it
is the value to be assigned to a particular field.
Fee u/s 234E
Surcharge
Education Cess
Interest 1,000 2,000
Penalty
Other Amount Paid
Total 52,000 52,000 Total of actual challan and in return should
always match, else mismatch may occur
TDS Interest
Amount
2,000 Amount entered here can not exceed amount of
Interest entered above
TDS Other Amount

18. 6: PAN corrected. Demand not deleted
Problem # 6
• Deductee’ correct PAN: AXKPB3856J
• PAN mentioned in original return: AYPPB3365I.
Demand raised since PAN was invalid.
• Correction statement filed.
• I am able to generate form 16A on correct PAN but
demand still not deleted.
Is it a system error? How to overcome this problem?

19. 6: Understanding system logic
Character no: 1 2 3 4 5 6 7 8 9 10 Total
PAN before correction A Y P P B 3 3 6 5 I
PAN after correction A X K P B 3 8 5 6 J
         
Change? N Y Y N N N Y Y Y Y
Change score for Alphabets 1 1 1 3
Change score for Numerics 1 1 1 3

20. 7: Date of credit v/s date of deduction in salary
Problem # 7
• Date of credit of salary to director: 31/03/2013 (FY 2012-
2013). No TDS was deducted at the time of credit u/s
192.
• Date of actual payment of salary as well as TDS:
10/05/2014
What assessment year to be mentioned on challan?
In which return this deduction should be disclosed and
how?

21. 7: Solution to problem # 7
Sl# Section Income Tax + SC + EC Minor Code CIN
XX 92B XXXXX 200 0004329 10052014 00003
Sl# Name PAN Section Amount
of
Payment
Amount Paid Date Income
Tax
TDS Date Challan Sl
#
1 Director CPAPG9999Q 192 XXXXX 10/05/2014 XXXX 10/05/2014 XX
Challan details in Q4-24Q
Deductee details in annexure I
AY should be year of credit i.e. AY 2013-14 (FY 2012-13)
Transaction has to be reported in return of Q4 for FY 2012-
13 (AY 2013-14)
What about levy u/s 234E?

22. 8: Section 197 demand
Problem # 8
• Certificate u/s 197 issued for 5 lac value @ 1% u/s 194J
• Total amount paid 5,60,000 @ 1%.
• Demand for Rs. 5400/- raised - deposited with interest.
How to prepare correction return to close this demand?

23. 8: Original position in return
Original return would have looked like this:
Sl# Section Income Tax + SC + EC Minor Code CIN
9 194J 5600 200 0004329 30042014 09211
Challan details
Deductee details
Sl
#
Name PAN Section Amount of
Payment
Amount
Paid Date
Tax
Rate
Income
Tax
Deducted
TDS Date Challan
Sl #
Remarks for
deduction
u/s 197
Cert. no.
1 ABC AEFHA
9876Q
194J 5,60,000 31/03/201
4
1 5,600 31/03/2014 9 A- Lower
deduction /
No Deduction
u/s 197
AAAA1
121XXX

24. 8: Post correction position in return
Post correction return should look like this:
Sl# Section Income Tax + SC + EC Minor Code CIN
9 194J 5600 200 0004329 30042014 09211
… …. …… …… …….
… …. …… ……. …….
12 194J 5400 200 0004329 14062014 09211
Challan details
Deductee details
Sl# Name PAN Section Amount of
Payment
Amount Paid
Date
Tax
Rate
Income
Tax
Deducted
TDS Date Challan
Sl #
Remarks for
deduction
u/s 197
Cert. no.
X ABC AEFHA
9876Q
194J 5,00,000 31/03/2014 1 5,000 31/03/2014 9 A- Lower
deduction / No
Deduction u/s
197
AAAA11
21XXX
… …. …… …… …….. …….. …… …….. ……….. ….
XX ABC AEFHA
9876Q
194J 6,000 31/03/2014 10 600 31/03/2014 9
XXX ABC AEFHA
9876Q
194J 54,000 31/03/2014 10 5400 14/06/2014 12

25. 9: Can I use challan next year?
Problem # 9
• AY 2013-2014 – Tax deposited u/s 192 – 10 Lacs. Used
in 24Q: 6 Lacs
• Tax for other returns already deposited, thus excess tax
paid this year: 4 lacs u/s 192
Should I file refund to get back excess tax deposited?
Can I use it in next FY?
Can I use it against non-salary TDS liability in next
year?

27. Then what is the solution?
Refund?

29. Now I can take queries from
house!

30. Thank you!!
Send your unique queries to
tds.query@bholusaria.com