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Different Types of Correction in TDS Return in India

The idea of TDS was introduced with the aim of levying tax at the source of income itself. Tax filing is a time-consuming process subject to inevitable mistakes. TDS returns and statements should be accurate. However, the Income Tax Department has started the process of submitting revised TDS returns "Correction Returns/Statements" to correct any error in the original return or statement.

Errors may be informational, computational, or human errors. In this article we are going to talk about the types of errors occurring in TDS returns and the corrections that can be made.

What is a TDS return?

TDS means tax deducted at source. According to this idea, a deductor who is required to pay another person (deductee) has to deduct tax at source and submit the amount to the central government. Based on the TDS certificate, the deductee is entitled to credit for the amount deducted from the income tax source deducted.

What is Revised TDS Return?

The person deducting TDS must file TDS return with NSDL on regular basis. A deductor can file an amended TDS return to update the earlier return if he notices any error or necessary changes in the return.

Who is required to file TDS return?
The following categories are required for filing TDS returns:
  • Each organization (including deductor and collector)
  • All Government Revenue and Tax Collectors
  • Persons whose accounts are audited in accordance with the Income Tax Act, 1961
  • Any additional taxpayers whose TDS has been deducted are required to file TDS returns.

When do we need to file revised TDS return?

We need to file revised TDS returns in following cases:
  • TDS statement with wrong PAN number
  • The unexpected TDS amount is deducted
  • Unexpected use of currency
  • Including wrong information in return

Types of Corrections in TDS Return

The types of corrections vary according to the changes the deductor wants in the regular return. Generally, correction returns are of six types.

C1: All changes made in deductor details are subject to C1 correction, with the exception of TAN number. C1 correction is generated in case the PAN number, deductor's name or address is wrong.

C2: C2 correction applies to change in currency or deductor details. It is required when the challan serial number has been submitted incorrectly. But when C2 correction takes place, it also includes C1 correction.

C3: C3 type of correction (other than PAN number) is for any type of correction in deductee details, challan details or deduction details. Incorrect mention of education cess in correcting certain details. Deductions can also be applied for additional information, such as the referring currency.

C4: Changes in pay particulars are subject to C4 revision. It is applicable only if amendment is required in the fourth quarter statement of Form 24Q. This correction can be issued if the Gross Salary or Total Salary records are incorrect.

C5: C5 rectification is required when there is any problem with the PAN number of the deductee. Also, PAN can be updated by using Forms 26Q, 27Q, and 27EQ.

C9: C9 corrections are issued for errors related to addition of new currency or any deduction associated with that currency. This is the only amendment that has to be done online.

Companies and employers have to deal with a significant amount of information while preparing TDS returns, which can result in numerous errors. Amendments to TDS return submission are frequent. Normally, a single file is used to update C1, C2, C3, C4 and C5. You can check for changes 3 days after filing the return. Your TAN and Receipt Number are required to check your TDS Return.

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