Dear Members,
I have a query regarding TDS u/s 196. As per Income Tax Act, 1961 we do not need to deduct any tax on payments made to Govt., RBI, Corporations established under a Central Act which is exempt from income tax, etc.. However, if a person has wrongfully deducted a TDS, it has to be deposited with Govt. Exchequer. No issues in this case.
Twist comes when you have wrongfully deducted TDS and that too at lower rate, say @ 2% (i.e. less than @ 20% in case of No PAN as per section 206AA).
Now the TRACES has generated a demand for short deduction (i.e. 18% = 20%-2%) for wrong/no PAN provided. Have you guyz also encountered the same issues before? Kindly suggest me the solution to this issue?
Regards,
Mohan
CAclubindia
