What is the late fee under section 234E for TDS returns?
₹200 for every day the TDS/TCS statement is late, capped at the amount of tax deductible or collectible in that statement. The fee is levied in the processing intimation under section 200A, must be paid before or with the belated statement, and cannot be waived — though the cap means small-TDS statements have a limited exposure.
What is the interest rate under section 201(1A)?
Two rates apply: 1% per month or part of a month from the date the tax was deductible to the date it is actually deducted (non-deduction or short deduction), and 1.5% per month or part of a month from the date of deduction to the date of deposit (deducted but paid late). Because part of a month counts as a full month, verifying TRACES's month count is a standard step in the reconciliation.
How do I close a TDS demand on TRACES?
Download the justification report to see the deductee-wise cause of each default, fix data errors (PAN, section, certificate number, challan mapping) through a correction statement — either TRACES online correction or a conso-file revision filed through the RPU — and pay any genuinely payable balance with a properly tagged challan. Once the correction is processed, verify on TRACES that the demand shows as closed.
Why does TRACES show a short-deduction default when I deducted correctly?
The most common causes are an invalid or mismatched deductee PAN (which triggers the higher 20% rate under section 206AA in processing), a lower-deduction certificate under section 197 whose number was not quoted in the statement, or a wrong section code or flag. All three are cured through a correction statement rather than by paying the demand.
What if the deductee has already paid the tax on the income?
Under the proviso to section 201(1), the deductor is not treated as an assessee in default for the short/non-deduction if the resident deductee has included the income in its return, paid the tax due, and a certificate from an accountant in Form 26A is furnished. Interest under section 201(1A) still applies from the date the tax was deductible to the date the deductee paid it.
