After a TDS statement is processed, the department issues a justification report listing any defaults — and a demand for the amount due. Almost all of these defaults come from a few repeat mistakes. The good news: each one can be prevented with a routine check before you file.
The most common TDS defaults
- Short deduction — tax deducted at a lower rate than applicable, often because the PAN was missing or invalid.
- Short payment — the challan amount is less than the tax reported in the statement.
- Late deduction or late payment — interest for every month or part of a month of delay.
- Late filing — a daily fee for statements filed after the due date.
- Unmatched challans — challan details in the statement do not match the bank’s records.
- PAN errors — invalid or unverified PANs, which also stop the deductee from getting credit.
Your pre-filing checklist
1. Get PANs right
Collect PAN from every deductee before making the payment, and verify it. If a deductee does not furnish a valid PAN — or the PAN is inoperative because it is not linked with Aadhaar — tax generally has to be deducted at a higher rate, and a lower rate applied by mistake becomes a short-deduction default.
2. Apply the correct rate and certificate
Check the nature of each payment and the applicable rate. Where a deductee holds a certificate for lower or nil deduction, verify that it is valid for that payment, amount and period before applying it.
3. Deposit tax on time
Tax deducted in a month is generally due by the 7th of the following month; tax deducted in March is due by 30 April. Deposit on time to avoid interest, and keep the challan details for mapping.
4. Map every challan correctly
Each deduction in your statement must point to the challan used to pay it — BSR code, date of deposit, challan serial number and amount. A single typo can leave a payment unmatched and create a short-payment demand.
5. File before the due date
Quarterly TDS statements are due by 31 July, 31 October, 31 January and 31 May. Filing early also gives you time to fix rejections before the deadline.
6. Review the justification report and correct quickly
After processing, download the justification report, fix any genuine errors through a correction statement and pay any remaining shortfall with interest. Prompt corrections stop small issues from piling up across quarters.
Make prevention automatic
Each check above is simple, but doing them by hand for hundreds of deductees every quarter is where mistakes creep in. Software that verifies PANs in bulk, maps challans automatically and predicts defaults before filing turns this checklist into a routine.