Payment under wrong TAN ? – Procedure to Correct it

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Payment under wrong TAN


Payment under wrong Tax Deduction Account Number (TAN) of TDS amount is one of the common issue face by lot many taxpayers. It often happen if the payment is done by businessmen having multiple firms/business as well as by accountant & Professional who renders payment services on behalf of numerous clients.
Often, mistakes occur and the payment of one TAN is done in the TAN of other persons. Question arises, how to rectify the TAN in the TDS challan form?

The present article is in the reference to the TAN challan correction procedures  whether paid online or offline.

 Meaning of OLTAS:

Under OLTAS (On Line Tax Accounting System) maintained and serviced by NSDL, the physical as well as online challans of all Direct Tax payments received from the deductor / taxpayers are digitized on daily basis by the collecting banks and the data transmitt to TIN (Tax Information Network) through link cell and processed by RBI’s Central Account Section based at Nagpur (CAS).

Procedure of challan correction by banks and A.O. (for physical & online challans):

To remedy this situation, a new Challan Correction Mechanism for physical & Online challans has been put in place. Under this mechanism, for income tax payments made on or after 1.9.2011, the following fields can be got correct through the concerned bank branch:

  ♦ Assessment Year

  ♦ Major Head Code

  ♦ Minor Head Code

  ♦ TAN/PAN

  ♦ Total Amount

  ♦ Nature of payment (TDS Codes)

The time window for the correction request by tax payer is as follows :

Sr.No Correction required in Field name Period of Correction Request (from

Challan Deposit Date)

1 TAN/PAN 7 days
2 Assessment Year 7 days
3 Amount 7 days
4 Other fields (Major head, Minor head, Nature of payment) Within 3 months
 

If Physically deposited.

Note: If the time window given above Lapses then no need to worry ,TDS Department has enabled an online mechanism served through TRACES( TDS Reconciliation, Analysis and Correction Enabling System)  where the tax deductor can request for the correction for the above fields expect TAN & PAN correction which is proceesed with the desired value in a day or two without visiting the TDS cell.

Now the Question arises that how to correct TAN/PAN online or offline?
Here comes the remedy to the above question if the TAN/PAN is quote wrong while making the payment to the Government. It creates an immense issue. The rectification of such rights are assigne to the Assessing Officer ( A.O.) only  and no online resolution is available till date and it seems that soon it will be available on the TRACES portal.
Presently, to correct the TAN follow the following procedures for the sure outcome:
If the amount is wrongly deposited on a valid TAN & the party is Known to us:
  1. The Tax deductor must know his/her Assessing Officer (A.O) if not known then see the Ward no of the assessing officer in the TAN allotment Letter provided by the Income tax Department.
  2. An Application from the correct TAN holder stating to correct the TAN.
  3. The Xerox Copy of the challan stating BSR Code, Date and challan No, duly signed by the authorized signatory.
  4. Bank Statement through which the tax amount was deposite online.
  5. A NOC (No objection Certificate) from the TAN holder on who’s the Tax amount has been wrongly credit duly sign and stamp.
If the amount is wrongly deposited on a valid TAN & the party is unknown to us:
Instead of Point No. 5, Indemnity BOND (Only in case where party is unknown and if the TAN is not valid)
After preparation and procurement of the above data submit the letter to the Assessing officer, he /she will assess and will put a note online which is a 7-14 days procedure and then the TAN will be rectified.
After following above procedure, taxpayer can check it online on traces or OLTAS and can tag or consume the same for closure of the demand aroused due to short payment u/s 201.
Hope the information served will make your compliance’s uncomplicated and if any doubt on this matter please feel free to contact me at cassrpn@gmail.com

Disclaimer: The article is not for advertisement purpose but to serve knowledge to the Indian Dedicated Tax Payers and Deductors.


Disclaimer: Author of this write up intends to impart the knowledge of the amendment. Made by the Government regulatory and step taken to ease the compliance. Author is nowhere liable for any damage or indirectly. And it is advisable to the viewers to consult their professional expertise to seek the advice.   

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