28 June 2011
DEAR EXPERTS, IN F.Y 2010-11(Q-3) SECTION CODE 194J , WE HAVE DEDUCTED A CLIENT TDS @ 10 % RS.20,000/-(AMOUNT PAID RS.2,00,000), & DEPOSIT THE SAME AMOUNT TO I.TAX DEPPTT, & FILED OUR Q3 RETURN ACCORDINGLY, AFTER 2 MONTHS WE REALIZE THAT THE SAME AMOUNT RELATED TO EMD(EARNEST MONEY DEPOSIT), NOT THE EXPENSES. NOW IF WE ARE CORRECTING THE SAME QUARTER(Q 3) TDS RETURN & WE DELETE THE ROW OF RESPECTIVE CLIENT IN DEDUCTEE DETAILS SHEET BUT NOT DELETE THE SAME CHALLAN DETAILS SINCE WE HAVE TO RECOVER THE SAME AMOUNT IN Q -4 . AFTER THAT WHEN WE ARE GENERATING FORM 27A THERE IS NO RECORDS SHOW IN CONTROL TOTALS COLUMN.PLS GUIDE
30 June 2011
As you have paid the TDS, its not possible to get it back from the dept. At the most you will have to adjust the same in future against the party. Now you do not change the Q3 return let it remain the same. In the nest quarter ie Q4, you deduct less TDS by the equivalent amount, thus showing that you have already deducted extra and hence no interest on current short deduction will be applicable. Also you adjust the amount of earnest money from Q4 bill and book the bill at net amount after adjusting the earnest money. As such you will see no short deduction in Q4.
01 July 2011
Dear Amita, thanks for your valuable comments, but how can we issue the party form 16a for 3rd quarter , it will show the discrepency of excess tds of rs.20k ,& if next quarter(q4) we have tax liability of this party is only rs.15k , excess deposit 20k in previous quarter, what will be the treatment of remaining 5k , , also one question that if we have a liability of same section rs.5.5k of another party can we adjust the same amount rs.5k with that client and deposit the tds only rs.500/-.
28 July 2024
When dealing with TDS (Tax Deducted at Source) corrections and adjustments, especially when you realize that an amount has been incorrectly classified, there are specific steps you need to follow to rectify the situation and ensure accurate reporting. Here’s how to handle the correction and address related queries:
### 1. **Correcting TDS for Previous Quarter**
#### A. **Correction of TDS Return for Q3**
1. **Correct the TDS Return**: - **Update Deductee Details**: In the Q3 TDS return, delete the incorrect entry related to EMD (Earnest Money Deposit) in the deductee details sheet. - **Maintain Challan Details**: Do not delete the challan details as they reflect the payment made. Instead, just remove the incorrect deductee information.
2. **Generate Form 27A**: - **Control Totals Issue**: If there’s no record in the control totals column, it indicates that the correction has not been fully reflected in the Form 27A generation. Ensure that the TDS return has been properly corrected and validated before generating Form 27A again.
3. **Submit Corrected Return**: - **Online Submission**: Submit the corrected return online through the NSDL/TIN portal or the relevant TDS filing platform. - **Physical Submission**: If required, also submit a physical copy of the corrected return to the TDS assessing officer.
#### B. **Issuing Form 16A**
1. **Discrepancy in Form 16A**: - **Excess TDS**: Since Form 16A will reflect the excess TDS deducted, you need to provide the correct details. Inform the deductee about the correction and the discrepancy.
2. **Handling Excess TDS**: - **Adjustment in Q4**: In Q4, you can adjust the excess TDS against the liability for the same party or for any other party’s liability, if applicable.
### 2. **Adjustment of Excess TDS**
#### A. **Adjustment Against Q4 Liability**
1. **Excess TDS**: For the excess TDS of ₹20,000 in Q3 and if the liability in Q4 is ₹15,000: - **Adjustment**: You can adjust the excess amount of ₹20,000 against the TDS liability of ₹15,000 for Q4. This will result in a credit of ₹5,000.
2. **Handling Excess Credit**: - **Carry Forward**: The excess credit of ₹5,000 can be carried forward or adjusted in the next quarter if the liability arises.
#### B. **Adjusting TDS with Another Party’s Liability**
1. **Cross-Adjustment**: - **Section Code**: You cannot directly adjust the TDS of one party with another party’s liability under the same section code. Each TDS entry should be matched with the corresponding deductee. - **Deposit Correctly**: If the TDS liability of ₹5,500 for another party exists, you should deposit the exact TDS amount of ₹5,500. Any adjustment should follow the proper TDS rules.
2. **Deposit and Reporting**: - **Proper Deposit**: Deposit ₹5,500 as TDS for the other party and file the TDS return accordingly. - **Adjusting Excess**: The excess amount should be carried forward to the next quarter or adjusted as per the correct procedure.
### Summary
1. **Correct TDS Return**: - Remove incorrect deductee details from the Q3 return while retaining the challan information. - Resubmit the corrected return and ensure accurate Form 27A generation.
2. **Form 16A**: - Issue Form 16A with the correct details and inform the deductee about the discrepancy. - Adjust the excess TDS in the Q4 return or carry forward to subsequent periods.
3. **Handling Excess and Adjustments**: - Adjust excess TDS against current or future liabilities of the same deductee or carry forward the credit. - Deposit TDS for each deductee separately and ensure correct reporting.
4. **Consultation**: - For specific scenarios and complex adjustments, consult a tax advisor or a professional to ensure compliance with TDS regulations and correct reporting.
By following these steps, you can effectively manage and rectify TDS reporting issues, ensuring that your tax records and filings are accurate and compliant with regulations.
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