Filing TDS (Tax Deducted at Source) returns is an essential compliance requirement for every business, organization, and individual responsible for making specified payments under the Income Tax Act. Timely and accurate filing of TDS returns ensures transparency, prevents penalties, and maintains good standing with the Income Tax Department. However, many taxpayers in Mumbai face challenges due to errors and omissions during the filing process.
In this detailed guide, we’ll explore the common errors to avoid during TDS Return Filing in Mumbai, their impact, and how professional assistance such as the TDS Return Filing Service in Mumbai offered by Mohit S. Shah Co can help ensure error-free compliance.
Understanding TDS Return Filing in Mumbai
Before addressing the common mistakes, it’s important to understand what TDS return filing involves. When a person or entity deducts tax at source, they are required to deposit this amount with the government and report the details in the form of a TDS return.
These returns must include:
TAN (Tax Deduction and Collection Account Number)
PAN (Permanent Account Number) of the deductor and deductee
Details of tax deducted and deposited
Challan details and payment particulars
Section codes under which tax is deducted
The process is governed by strict timelines and regulations. Even small errors can result in notices, penalties, or mismatches in Form 26AS.
Common Errors in TDS Return Filing
Below are the most frequent mistakes that deductors make while filing TDS returns in Mumbai, and tips to avoid them.
1. Incorrect TAN or PAN Details
One of the most common and critical mistakes is entering an incorrect TAN or PAN. The TAN is mandatory for all TDS transactions and identifies the deductor, while the PAN ensures accurate credit to the deductee.
Impact:
Returns are rejected by the system.
Mismatch in Form 26AS for the payee.
Possibility of penalty under Section 272B.
How to Avoid:
Always verify TAN and PAN details through the official NSDL or TRACES portal before submission. A professional TDS Return Filing Service in Mumbai like Mohit S. Shah Co ensures all identifiers are validated before uploading the return.
2. Wrong Challan Details
Each TDS payment made to the government generates a unique challan with a Challan Identification Number (CIN). Entering incorrect challan numbers, BSR codes, or payment dates is a frequent error.
Impact:
The challan may not match the TDS payment record.
Credit might not reflect in the system.
The return may be treated as defective.
How to Avoid:
Reconcile your challan details with your bank statements before filing. Always cross-check entries against the OLTAS (Online Tax Accounting System) records.
3. Incorrect Section Code
Each payment type (such as salary, contractor payment, rent, or professional fees) falls under a specific section of the Income Tax Act. Using the wrong section code leads to misclassification of the payment.
Impact:
Incorrect reporting of payment nature.
Difficulties in reconciling with Form 26AS.
Possible notices from the Income Tax Department.
How to Avoid:
Understand the section codes that apply to your transactions (e.g., 192 for salary, 194C for contractor payments, 194J for professional fees). Consulting experts in TDS Return Filing in Mumbai ensures proper categorization under the correct section.
4. Mismatch Between TDS Amount Deducted and Deposited
Sometimes, the amount deducted from payments does not match the amount deposited to the government. This may happen due to data entry mistakes, partial payments, or reconciliation errors.
Impact:
Rejection of TDS returns.
Short payment penalties and interest under Section 201.
How to Avoid:
Regularly reconcile deductions with deposits using TRACES or NSDL tools. Maintaining accurate books of accounts can prevent such mismatches.
5. Late Filing or Payment of TDS
Many deductors in Mumbai miss due dates for either depositing TDS or filing returns. The Income Tax Department levies interest and late fees for such delays.
Impact:
Interest at 1.5% per month for late payment.
Penalty of ₹200 per day under Section 234E for delayed filing.
How to Avoid:
Set internal reminders and adhere to statutory deadlines — generally the 7th of each month for payment and quarterly filing deadlines as per the TDS calendar.
6. Wrong Deductee Details
Providing incorrect names, PANs, or addresses of the deductee is another common issue. It results in credit mismatch for the recipient and leads to unnecessary disputes.
Impact:
Form 26AS of the deductee will not show correct TDS credit.
Possible rectification and resubmission required.
How to Avoid:
Always verify deductee details before submission. Collect updated PAN cards and ensure accuracy at the source.
7. Failure to Revise Defective Returns
If the Income Tax Department identifies errors, it marks the return as defective. Many taxpayers fail to file a correction statement or revised return promptly.
Impact:
Return remains invalid until corrected.
Continuous mismatch in TDS records.
How to Avoid:
Monitor the TRACES portal regularly for any error notifications and revise returns immediately to avoid compliance issues.
8. Incorrect Financial Year or Quarter
Selecting the wrong financial year or quarter during filing is a simple but costly error.
Impact:
Wrong mapping of TDS records.
Incorrect reflection in the annual statement.
How to Avoid:
Double-check the financial year and quarter selection before uploading the file.
9. Improper File Format or Validation Issues
TDS returns must be filed in a specific file format (.txt file validated using the File Validation Utility). Any deviation leads to rejection.
Impact:
Return not accepted by the TIN system.
Delayed compliance and potential penalties.
How to Avoid:
Use the latest File Validation Utility (FVU) version provided by NSDL. Professionals providing TDS Return Filing Service in Mumbai ensure every return passes validation before submission.
How Mohit S. Shah Co Helps Ensure Error-Free TDS Returns
At Mohit S. Shah Co, we understand that even minor mistakes in TDS returns can lead to unnecessary complications and financial penalties. Our specialized TDS Return Filing Service in Mumbai is designed to simplify the process through:
Accurate Data Verification: Each detail — TAN, PAN, challans, and section codes — is verified before submission.
Timely Filing: We ensure all returns are filed within statutory deadlines to prevent late fees or interest.
Error Rectification: In case of mismatches or defective returns, we assist in quick correction and resubmission.
Regulatory Updates: Our team stays updated on changes in TDS provisions, forms, and filing requirements.
By partnering with professionals, businesses can focus on their operations while ensuring complete compliance with TDS regulations.
Conclusion
TDS return filing is more than a routine compliance task — it’s a responsibility that demands accuracy and timely execution. Common mistakes like incorrect PAN, wrong challan details, or delayed filing can lead to unnecessary notices and penalties.
Businesses in Mumbai can greatly benefit from expert assistance in managing these requirements. With the reliable TDS Return Filing in Mumbai services provided by Mohit S. Shah Co, deductors can ensure seamless compliance, eliminate errors, and maintain transparency in all tax-related matters.
