How to File Revised Tax Deduction at Source Return?

In this blog post, we explain how to file a Revised tax deduction at source (TDS) return for the benefit of interested readers.

What is meant by TDS?

Tax deducted at source, or TDS for short, is a legal method of tax collection whereby the person disbursing the funds to the taxpayer first deducts tax from their taxable income before depositing the amount with the government.

Let’s imagine B is the landlord who receives the rental income and A is a tenant in a rented unit. And in accordance with the law, B must pay income tax on the rent received. However, in accordance with the TDS return regulations, A is required to deduct the tax from the rent at the rate specified by the Income Tax Act and pay the government on behalf of B rather than B paying the tax directly to the government.

With a third party in charge of tax payment, this arrangement helps prevent tax evasion since if the third party forgets to withhold taxes, they will be liable for paying the taxes themselves.

In this arrangement, there are currently three parties. The first is the party that withholds the tax from the sum that must be paid before doing so. The deductor is what we refer to it as.

The individual from whose income tax was withheld is the next factor. He or she is known as the deductee. The government is the third and final entity, with whom the deductor will deposit the tax refund.

Filing a TDS return refers to the process where the deductor deposits the money with the government. When depositing the money, the deductor must complete a form with the required information and submit it with the tax withheld.

To update your TDS returns, you’ll need the consolidated file and justification report. The justification report details errors in the submitted TDS return, whereas the consolidated file, commonly known as the conso file, contains information on deductions made for a certain quarter.

TDS is deducted on the following types of payments: Salaries, Interest payments by banks, Commission payments, Rent payments, Consultation fees, and Professional fees.

A TDS return has to be filed quarterly.

Why file TDS return?

Individuals must submit TDS returns if tax at source on a specific source of income has been deducted and reported to the government. Such a return often needs to be filled out within a certain time frame and include important information about the tax deduction, the deductor, and the deductee, among other things.

What is the due date for filing TDS return for the FY 2022–2023?

The latest day to submit a TDS return is typically March 31st of each fiscal year. However, as per the pronouncements of the Central Board of Direct Taxes (CBDT), an extension of this date to May 31st has been declared due to the current circumstances.

According to Yashesh Ashar, Partner at the chartered accounting firm Bhuta Shah & Co LLP, “the tax deductor is obligated to deposit the TDS to the government within the given time period under Section 200 of the Income Tax Act, 1961.” “The deductor of the tax is required to deposit the tax with the government by the seventh day of the following month under the existing income tax regulations. Taxes, though, are deducted in March, and the government and other deductors have separate due dates. The deadline for depositing taxes withheld is April 7 for the government. The tax is due by April 30th for all other deducting entities.”

Reasons for filing a revised TDS return

What if someone finds that the information that has been filed contains a mistake? There is an easy solution. You file a new tax return. Let’s explore this in more detail.

The following are the reasons to file a Revised Tds return:

Types of errors

Only the seven sorts of errors that the income tax agency recognizes as acceptable errors may be rectified. The following are those errors:

C1 Type

This type of error includes mistakes in the assessee’s name, address, and other personal information that the deductor has on file.

C2 Type

Errors in the assessee’s challan information, such as the challan serial number, BSR code, tender challan date, challan amounts, etc., are classified as C2 type errors.

C3 Type

This type of error includes mistakes with the assessor’s or deductor’s specifics.

C4 Type

This modification involves adding and removing all of the assessee’s salary detail records. The C4 type of correction includes this kind.

C5 Type

C5-type errors are those that pertain to the assessor’s or deductor’s permanent account number (PAN) information.

C9 Type

The C9 error type provides for the correction of an omission error, whereas the earlier types deal with errors of commission. Under this category, challans that were overlooked when filing TDS returns can be added to the return and corrected.

Y Type

The cancellation of an approved statement is related to the “Y” kind of correction. Only when the tax deduction and collection account number (TAN) of the deductor is updated can the regular TDS or tax collected at source (TCS) be cancelled. It is important to file a new regular TDS or TCS statement with the right TAN once you cancel the regular statement with the wrong TAN.

Steps for filing a revised TDS return

Let’s first become familiar with the requirements for submitting an amended TDS return before learning the actions involved in doing so:

• The TIN central system will only accept a revised TDS return if the original TDS return has already been accepted.
• By entering the necessary information, such as the PAN number and provisional receipt number or token number, on the NSDL website (https://onlineservices.tin.egov-nsdl.com/TIN/JSP/tds/linktoUnauthorizedInput.jsp), the assessee can verify the status of the TDS return filed online.
• The most current consolidated TDS statement must be used to prepare the revised TDS return. The webpage for TRACES offers a download for this. The provisional receipt or token number of the original statement must be specified in order to download this statement.

The following are the steps to filing a revised TDS return:

Logging into your TRACES (TDS Reconciliation Analysis and Correction Enabling System) account is the initial step. Create an account if you don’t already have one. You will be required to sign up as a taxpayer or a deductor. Decide to sign up as a deductor.

1. After logging in, your home screen will be displayed. Statements or payments will be an option under the main menu. Just click on it.
2. There will be a submenu. Choose “Request for conso file” from the menu.
3. You will then be led to a screen where you must select the form type that needs to be amended as well as the return’s financial year, quarter, and quarter. Select the appropriate choices, then click “Go.”
4. You must now complete a KYC certification. You will be given two choices. One option is to use a DSC, in which case you merely need to affix your digital signature in the relevant area. The alternative is to proceed without providing your KYC, in which case you would be required to input information such as the challan’s token number and AY. Give the information requested, then move on.
5. Following the verification of all the KYC information, you will be directed to the following page: Select “Request conso file” from the menu, then select “Proceed with Transaction.”
6. A notice box stating that the conso file is now available for download will appear.
7. Downloads > “Requested Downloads” should be visited. Type in the assigned request number. You can download the file if the request status is “Available.”
8. After confirming the form, you can now make any necessary changes to the details and submit it.

Required documents for filing a revised TDS return

General documents required to file a revised TDS return

1. TAN details
2. TDS certificate
3. Tax payment challans
4. PAN card information
5. Date of the incorporation of company
6. Details of every bank account
7. Number of transactions required to file TDS return
8. Notice information from the Indian Income Tax Department

Additional documents required to file a revised TDS return—Income from salary

1. Form 16
2. Salary certificate

Additional documents required to file a revised TDS return—Interest statement

1. TDS certificate from your bank
2. TDS certificate passbook or bank statement for interest on savings account for recurring deposits
3. Interest income statement for fixed deposit

Additional documents required to file a revised TDS return—Property related

1. Rent or property tax records
2. Bank-issued interest certificates for mortgage loans
3. Information about co-owners, if any
4. Evidence of the property’s address

Additional documents required to file a revised TDS return—Profits from capital

1. A reserve statement is necessary if you trade shares.
2. Sales and purchase agreements with the stamp of property for an area of land or a building
3. The reinvestment purchase deed is necessary if you want to be free from taxes on capital profits.
4. Capital assets require purchase price, a cost of improvement, and a value at sale.
5. Documents for the cost of improvement
6. Information about the expenses associated with the transfer

Additional documents required to file a revised TDS return—Tax-saving investments

1. Receipts of tuition fees
2. Certificate of home loan repayment
3. Payment receipt of life and medical insurance
4. Philanthropic receipts (donation)
5. Deposit receipts of the senior citizen savings program

Deadline for filing a revised TDS return

Monthly deposits are made for the taxes that have been withheld from the income. A quarterly TDS return is submitted for the same. Therefore, the TDS return must be submitted in July for the taxes withheld in the months of April, May, and June. However, if there is a delay in the TDS return filing date for the month of March, by May, the TDS return for the final quarter of the fiscal year must be submitted.

Quarters	Due date for filing TDS return
1 (April, May June 2022)	July 31, 2022
2 (July, August, September 2022)	October 31, 2022
3 (October, November, December 2022)	January 31, 2023
4 (January, February, March 2023)	May 31, 2023

It is to be noted that if tax is deducted under sections 194-IA (TDs on purchase of immovable property), 194-IB (TDS on property having monthly rental of Rs 50,000 and above), 194-M (TDS on payment made to resident contractors and professionals), or 194S (TDS on transfer of virtual digital assets, crypto, non-fungible tokens (NFTs), etc.), the deductor must file a challan-cum-statement within 30 days of the end of the month in which the deduction is made.

Consequences of late filing or non-filing of a revised TDS return

Below-listed are the penalties applicable in case of late payment of TDS:

• Late filing fee (in case you have not filed TDS return by the correct date)
• Interest (if you do not deposit TDS amount in time)
• Penalty (if TDS is not filed within a year of the due date)

Interest

The provision of interest on late payment of TDS or on late deduction of TDS is defined in Section 201(1) of the Income Tax Act, 1996

Interest on late TDS deductions: From the due date for deduction until the actual date of deduction, the assessee is responsible for paying interest on the amount of TDS at a rate of 1% for each month or portion of a month.

Interest on late TDS payments: From the date when TDS was supposed to be deducted until the actual date of deduction, the assessee is responsible for paying interest @ 1.5% for each month or portion of a month on the amount of TDS.

Penalty

Any assessee who fails to submit their TDS returns by the due date is subject to a penalty equal to the amount that was not properly withheld.

Penalty under Section 271H

According to Section 271H, if a person fails to submit the TDS or TCS return, which is the statement of tax deducted or collected at source, on or before the deadlines specified in this regard, the assessing officer may order that person to pay a penalty under Section 271H. A minimum fine of Rs. 10,000 and a maximum fine of Rs. 100,000 may be imposed. In addition to the late filing fees outlined in Section 234E, the penalty under Section 271H must be paid.

Section 271H also addresses instances of inaccurate TDS or TCS return filing in addition to cases of late TDS or TCS return filing. Incorrect TDS or TCS returns submitted by the deductor or collector may also result in penalties under Section 271H. In other words, if the deductor or collector submits an inaccurate TDS or TCS return, a minimum penalty of Rs. 10,000 and a maximum penalty of Rs. 1,000,000 may be assessed.

According to Section 234E, if a person fails to submit the TDS or TCS return by the due date specified in this regard, he will be required to pay a fine of Rs. 200 for each day that the failure continues. The sum of late fees cannot be greater than the TDS amount.

TDS or TCS returns cannot be submitted without paying the previously mentioned late filing fees. In other words, the late filing fees must be paid before the TDS return is submitted. It should be remembered that Rs. 200 per day is a late filing cost and not a penalty.

Prosecution (Section 276B)

In case an individual fails to pay to the credit of the central government

He or she faces a minimum sentence of three months in jail and a maximum of seven years in prison under Chapter XVII-rules, B’s, as well as a fine.

Effect on credit rating

Let’s quickly go over what a credit score means before looking at the impact on credit ratings.

A person’s ability to repay a debt is gauged by his or her credit score.

Credit score range and its significance

NA or NH: The credit score is shown as “not applicable” (NA) or “no history” (NH) if the person has no prior credit history.

300–549 points: Those with credit scores in this range are regarded as having terrible credit. It suggests that the person has fallen behind on their obligations and owes money.

550–649 points: People in this category are regarded as average and should work on raising their credit score.

650—749 points: Lenders will be prepared to issue loans and credit cards with a score in this range, which is regarded as an excellent score. Even so, the person will still be unable to work out a settlement with the lender.

750–900 points: This range is thought to represent great credit scores for individuals. Loans will be made available to people in this category, who can also negotiate interest rates and credit cards with greater incentives.

Credit information companies like CIBIL Score, TransUnion, Experian, Equifax Credit Score, and High Mark calculate credit scores. The banks report the transaction information to the credit bureaus whenever a person makes a transaction important to calculating their credit score. This data transfer is required by the Reserve Bank of India (RBI).

The TDS will not be available against your PAN in your Form 26AS if your employer has not paid the TDS to income tax authorities. When submitting your income tax return, you are not permitted to claim a TDS tax credit. If you claim tax credit for this sum, the income tax division will notify you of the discrepancy between the TDS claimed and taxes paid.

The taxpayers will suffer in cases like this where they are caught between the income tax office and the employer.

Importance of filing an accurate TDS return

You must file your income tax return in any given outline for the following reasons:

1. Your capital losses and gains will get an adjustment

If investing in the equity or stock market has been your main priority, then timely filing your income tax return will prove to be quite beneficial for you. Your capital losses can be offset against your capital gains if your total yearly pay is less than the basic exemption level, even though filing an income tax return may not be necessary in that situation.

Depending on whether you have submitted your return for that specific financial year, you can also make sure that your losses (if any) are carried forward for the following eight years by doing this.

2. Your tax refunds will be easy to claim if you file income tax return

Once a certain type of tax is deducted, the only way to request a tax refund for that specific fiscal year is to file an income tax return. It is crucial that you complete your returns in order to be eligible for a refund if you are a non-resident Indian (NRI) who pays TDS on his rental money or if TDS is being deducted from your bank accounts’ fixed deposits. Once the income tax return filing for that year is complete, you must use the portal to receive your refund.

3. Loans will come to you easily if you have been filing your tax returns accurately

Your income tax return serves as documentation of your income in addition to being another crucial financial record because it lists all of your earnings for a given year. As a result, when you ask for a specific loan amount, non-banking financial companies (NBFCs) and other financial institutions actively look for this paperwork. Even though you have a lesser taxable income, filing a return will still be advantageous in this situation.

4. You will be able to claim your tax deductions very easily

You must absolutely file your income tax return for that specific fiscal year if you earn more than Rs. 3 lakh (the basic exemption limit) and are requesting various exemptions to bring your income below that amount. If you want to claim any future deductions, you must file a tax return even if you have no current tax due.

5. Owning assets (foreign assets) will be much easier

If a person has any foreign assets, they are required by law to appropriately file their income tax reports. This clause also applies to any immovable property you may own, such as a bank account. Failure to follow this guideline may result in substantial penalties and is also regarded as a serious economic offence.

The role of a tax consultant in filing a revised TDS return

There are numerous tax advisors and businesses that can assist you in submitting an amended TDS return. In this regard, you are free to decide how to file your updated TDS return.

Step 1: Access your ClearTax account by logging in. After logging in, select “My Tax Returns” from the drop-down menu by going to the profile icon.

Step 2: For the entity you wish to update returns for, click the “View Details” button. Always keep in mind that you can only amend returns that have already been submitted.

Step 3: You can mark your income tax return as revised by selecting it on the Tax Summary screen.

Step 4: Your tax return has been marked as “Revised.” Click on the “click here” link that is provided.

Step 5: Make the appropriate adjustments in the corresponding areas.

Step 6: After you have finished making the adjustments, submit your updated income tax return by clicking the “Proceed to e-file” button on the tax summary screen.

We have made an effort to outline the general process for editing a TDS return in this blog. The process is actually far more intricate, technical, and thorough. To revise a return accurately and without mistakes, one would need to have information and experience from personal experience.

Therefore, it is usually essential to consult an expert for advice while handling such issues. Contact any tax professional of your choosing who will get in touch with you to understand your needs and provide assistance if you have any questions about your amended TDS forms or need help submitting or modifying them.

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