TRACES (TDS Reconciliation Analysis and Correction Enabling System) is a web-based platform administered by the Income Tax Department of India. Its primary purpose is to provide various TDS and TCS related services to tax deductors, tax collectors, and taxpayers alike. A few of these services include online correction of TDS statements, viewing status of TDS payment challan, downloading consolidated files of TDS statements, downloading justification reports pointing out errors in TDS statements, and the viewing of annual tax credit statements.
In this article, we shall be discussing in detail the purpose, conditions, and stepwise procedure for making corrections in TDS return statements by submitting online correction requests on TRACES, and also learn the process by which the statuses of such requests can be tracked on TRACES itself.
What is Form 26 QB?
Taxes that are levied by the Government on various types of incomes earned can be deducted and collected at the source of income itself. This is termed as TDS or Tax Deduction at Source, and TCS or Tax Collection at Source.
In this context, Section 194 IA of the Income Tax Act prescribes TDS and TCS for income earned on the sale of immovable property like land (except agricultural land) and buildings. According to this section, if an immovable property has been sold for a sale value beyond Rs.50 lakhs, the seller will have to pay 1% of the total sale value as income tax to the Government.
This tax will be deducted and collected as TDS by the buyer of the property, and paid to the Government on behalf of the seller. The statement of returns of such TDS payment will have to be filed by the buyer to the Income Tax Department in Form 26 QB, within 30 days from the date on which such tax was deducted by the buyer.
What details of Form 26 QB can be corrected?
Up until Financial Year 2013-14, there were no provisions under law to make changes or corrections in form 26 QB. However, in the year 2014-15, the Government amended section 194 IA of the Income Tax Act to introduce a new clause, whereby corrections could be made in Form 26 QB, only after the approval of the Assessing Officer. Although this provision was quite helpful for ITR filers, the process itself was extremely exhausting and time consuming.
Realising the hassle through which tax deductors had to go through every time they sought corrections in their TDS statements, the government, in the year 2016, introduced an online process of making corrections in form 26 QB on the web-based platform, TRACES.
Consequently, from 29th of February, 2016 onwards, TDS deductors registered on TRACES have been able to submit online correction requests in the TDS return statements and make necessary changes in no time.
The details that can be changed or corrected in Form 26 QB on TRACES have been listed in the table below.
| S. No. | Details in Form 26 QB that can be corrected |
|---|---|
|
1.
|
PAN of Buyer
|
|
2. |
PAN of Seller |
|
3. |
Financial Year
|
|
4. |
Amount Paid or Amount Credited
|
|
5. |
Date of Payment or Date of Credit
|
|
6. |
Date of Deduction
|
|
7. |
Property Details, including its complete address
|
|
8. |
Purchase Amount
|
What are the conditions to make corrections in Form 26 QB?
The correction request for Form 26 QB can be filed only after certain conditions have been met. Moreover, since the request is being submitted online, it needs to be verified either by the Digital Signature Certificate (DSC) of the buyer submitting the request, or the Assessing Officer under whose jurisdiction the buyer falls in. We have listed all the conditions regarding the processing and verification of Form 26 QB below. Without fulfilling these, you cannot proceed with filing the correction request for form 26 QB.
- You can file the correction request only after your statement of TDS returns in form 26 QB has been processed.
- You can submit the correction request only if you are the buyer of the property, and not its seller. However, the approval of the seller is required in the form of a No Objection Certificate for the correction request to be filed.
- If the seller of the property is known, the e-verification of the correction request for PAN of the buyer / seller can be done by the DSC of the buyer registered on TRACES, internet banking, or the approval of the Assessing officer.
- However, if the seller of the property is not known, and the buyer’s DSC is not registered, the only option for e-verification of the correction request for PAN details of the buyer / seller, is through the prior approval of the Assessing Officer.
- If the seller is known but the DSC of the buyer is unregistered, the buyer can opt for e-verification of correction request for PAN details of buyer / seller through internet banking or approval of the Assessing officer.
- If details related to the property (its address and name), buyer’s address, and the seller’s address are to be corrected, the same can be verified or auto approved by the DSC of the buyer / seller, irrespective of whether the DSC is registered or unregistered.
- If the DSC of the buyer is not registered, and the correction request has been filed for details like the purchase amount, date of payment of purchase amount, and the date of tax deduction, the request will be verified with the Assessing Officer’s approval only.
How to submit correction requests for Form 26 QB using DSC / AO approval?
The correction request for Form 26 QB can be filed only after certain conditions have been met. Moreover, since the request is being submitted online, it needs to be verified either by the Digital Signature Certificate (DSC) of the buyer submitting the request, or the Assessing Officer under whose jurisdiction the buyer falls in. We have listed all the conditions regarding the processing and verification of Form 26 QB below. Without fulfilling these, you cannot proceed with filing the correction request for form 26 QB.
- Login to TRACES portal: To Login into your TRACES account you are required to enter your registered User Id, Password, and PAN number.
- Navigate to Request for Correction: Now in order to access and fill the correction form you will have to go to Statements / Forms then go to ‘Request for Correction’.
- Select the Form Type: Then Select Form 26QB from the dropdown, and then go to “Online Correction” to submit the Correction Request.
- Review the Checklist: Before processing, you must review the checklist and then click on ‘Proceed’. This checklist mentions the same conditions that we have discussed in the previous section.
- Select the appropriate details: Now, fill in the Assessment Year, the Acknowledgement Number of the and PAN of Seller, and then click on ‘File Correction’ tab next to it.
- Submission of the Request: After all this, the Success page will appear on the screen and you will see that a ‘Request Number’ has been generated. You can track the status of the correction request using this number under the tab ‘Statements / Forms’.
- Navigate to Track Correction Request: Go to Statements / Forms > Track Correction Request
- Verify the status of Correction Request: Enter the Request Number or Request Date. Then Click on ‘View Request’. A list of requests pertaining to the search criteria will appear. Select the relevant row and if the status is ‘Available’, you can start the correction.
- Enter Challan details:
Enter Challan Details of any challan paid while filing Form 26QB. Click on ‘Proceed’
- BSR Code
- The date on which tax is deposited – enter in dd-mm-yyyy format eg: 10-Jan-2019
- Challan Serial Number – 5 digit number eg: 00025
- Challan Deposit Amount – enter the amount with decimal places eg: 1569.00
- Edit the details: Details as per Form 26QB filed will appear on the screen. Click on ‘Edit’ for correcting the details.If your DSC is not registered on TRACES or if you don’t have e-verification (internet banking), you will require the approval of the jurisdictional Assessing Officer. For this purpose, you will have approach the AO with the following documents:
- Hard copy of acknowledgement of correction of Form 26 QB
- PAN card of the buyer
- ID proof of the buyer
- Property purchase documents
- Proof of payment of TDS
- Save the corrections: Make the necessary corrections. Click on ‘Save’. Click on ‘Submit Correction Statement’ once you have finished with all the corrections.
- Confirmation message: Confirmation Screen will appear. The updated details will be highlighted in yellow colour. You should review the updated details once again and then finally click on the ‘Confirm the Details’ option.
- Submit correction request: Profile details will appear as updated on the portal. Click on “Submit Request” to Submit Correction Request by choosing the appropriate option.
Option 1: Validate Correction Request using AO Approval – Click on AO Approval. Click on ‘Submit Request’. A pop-up will appear to track correction status. Click on ‘Continue’. The AO Details will be available once the ‘Correction Status’ changes to ‘Pending for AO Approval’.
Option 2: Validate Correction Request using DSC – Click on DSC. Click on the option ‘DSC’. Click on ‘Proceed’. Then choose DSC i.e. Digital Signature Certificate of the Authorised Person. Click on ‘Sign’. To use DSC on TRACES, it is mandatory that you download and install WebSocket emSigner.
- Success!
Once you submit the correction request, a success message will appear on the screen.
How to check the status of the Correction Request made?
To check the status of the correction request you have to click on the statements or forms then Track Correction Request. Let’s see the different types of status that is reflected on the website.
- Pending for PAN Approval – Is shown when the Correction Statement is submitted for approval of the buyer or seller of the property.
- Pending for AO Approval – When the Correction Statement is pending for approval from the Assessing Officer, this appears as its status Users can check AO details in the column ‘Assessing Officer Details’.
- Submitted to ITD – Appears if the Correction Statement has been approved by AO, buyer or seller and has now been submitted to the Income Tax Department.
- Processed – When the Correction Statement is processed by TDS CPC, “Processed” appears as the status.
- Cancelled – If the Correction Statement is cancelled by the buyer, then “cancelled” appears as the status.
- Rejected – Appears when the Correction Statement is rejected by buyer, seller, AO or TDS-CPC.
We hope that this blog has been helpful for you to understand the Form 26QB Correction using AO approval or DSC, and hope that you can now file your TDS return statements more efficiently, easily, and in a hassle free manner.