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Do’s and Don’ts for TDS Returns

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Do's and Don'ts for TDS Returns

What is TDS TRACES? 

TDS Reconciliation Analysis and Correction Enabling System is an online portal provided by the Income Tax Department. The aim of this facility is to enable both taxpayers and deductors of TDS to view their paid taxes online and work accordingly for reconciliation for purposes of filing returns and seeking refunds. 

The Income Tax sector has in its arsenal many factors and comprises many components which help an individual with filing income tax, refunds and understanding the procedure. The TDS that is tax deducted at source and the TCS tax collected at source are of the most importance. To bring to the citizen a hassle-free and seamless process of tax collection and reconciliation TRACES was introduced.

Taxpayers can view all transactions regarding taxes that have been deducted at source, including salaries. Tax that has been collected beforehand the taxpayer can also view that, including advance taxes paid and self-assessment taxes deposited, can be viewed by logging into one’s account at TDS TRACES.

Form 16 or 16A can also be downloaded from TRACES, which we know is tangible and official proof of taxes deducted at source. Annual tax statement (Form 26AS) which shows and records all taxes paid can also be downloaded including advance taxes and self-assessment tax. 

The Tax Information Network organized and operated by the government needs certain special systems to work efficiently to file details of transactions as an Annual Information Report (AIR). These have in them transactions in cash, shares, properties, mutual funds, credit cards and bonds. Taxpayers can see and also download the AIR linked to their PAN from TRACES.

How to register with TDS TRACES

Individual taxpayers who want to view taxes deducted from their earnings, should first register their details with TRACES  by providing details of their PAN, email, and mobile numbers and create an online account with a username and password. 

The system then generates an email for activating the account and then the individual is able to operate the TRACES account according to his personal needs regarding taxation.

  • Registration with TRACES is mandatory to file a Correction Statement or find information and file reconciliation forms. It helps to file online corrections. Once a person is registered the individual can avail most of the facilities provided by traces. A taxpayer can also view TDS/TCS credit, verify form 16, view refund status and many more functions are provided by Traces
  • Register as New User
  • TAN of the deductor, entering the  Verification code
  • Enter the Token number 
  • Authentication code is generated after KYC information details are verified.
  • Confirmation page shall be displayed
  • Finally, a successful registration message will be received by the person registering.

Facilities available at TDS TRACES

Services available for taxpayers:

  1. Form 26AS download
  2. TDS certificate verification
  3. Form 16B download
  4. Download of aggregated TDS compliance report

Services available to deductors:

  1. Challan status
  2. Form 16 download
  3. Downloading of Justification Report
  4. Online correction
  5. TDS refund
  6. Checking TDS or TCS credit against a PAN number.

To view the TDS challan status on TRACES an individual needs to:

  1. Login to the individual  account
  2. Go to Statements or Payments Menu
  3. Click on Challan Status
  4. Enter Challan details
  5. Checking the challan status using CIN and BIN

Once the procedure is complete the details will appear. An unclaimed or claimed challan status can be viewed by the deductor on TRACES.

Downloading Form 26AS from TRACES

Form 26AS, or the tax credit statement is one of the most important documents in the case of filing an individual’s taxes.  Form 26AS can be viewed and downloaded from the TRACES website in a simple and hassle-free process.

The procedure to download Form 26AS from the new income tax portal is mentioned below:

  • Visit the TRACES website
  • Click on Login
  • Enter the User ID. The user must enter the Aadhaar number and  the PAN number to complete the login process. Before a person can log in, one must complete the registration process.
  • Once entering the User ID, click on Continue
  • Select ‘e-file’
  • click on ‘Income Tax Returns’
  • Click on ‘View Form 26AS’.
  • Select ‘Confirm’ next
  • Next page, click on ‘Proceed’.
  • Click on ‘View Tax Credit (Form 26AS)’
  • Choose the ‘View Type’ and ‘Assessment Year’ next
  • Choose the format next.
  • Select ‘View/ Download’ to complete the process.

TRACES Justification report:  

The justification report records details of errors and defaults on part of the deductor in the process of filing the TDS return. TRACES allows the deductor to view and understand the justification report. The information can also be used by the deductors to get clarifications.

In a simple way the website is an easy way in which the users are more free and at ease to handle their tax related queries and problems.

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