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
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
- 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
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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