TRACES or TDS Reconciliation Analysis and Correction Enabling System is a web-based platform administered by the Income Tax Department of India. It provides an all-inclusive interface to all stakeholders associated with TDS / TCS, including tax deductors, tax collectors, and taxpayers and enables them to avail a number of facilities like the ability to correct TDS statements online, see the status of TDS payment challans, download TDS statement consolidation files, download justification reports highlighting errors inTDS statements, and viewing annual tax credit statements.
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This blog is centred around one of the most significant facilities of TRACES, the online correction of TDS statement of returns filed in Form 26 QB, and its e-verification using Internet banking. E-verification of correction requests can be done in three different ways, viz. using a DSC, through Assessing Officer’s approval, and through internet banking, which we will discuss in detail in this blog.
What is form 26 QB?
Taxes levied by the government on various types of income earned can be deducted and collected at the point of income generation itself. This is termed as tax deducted at source (TDS) and Tax collected at source (TCS).
In this context, Tax deduction and collection at source has been mandated for income received from the sale of immovable property, such as land (apart from agricultural land), and buildings, by Section 194 IA of the Income Tax Act of 1961. The section states that if the sale value of an immovable property exceeds Rs. 50 lakhs, the seller must pay to the government 1% of the total sale price as income tax. The buyer of the property will deduct this tax as TDS from the payment he makes to the seller, and pays it to the Income Tax Department, in the name of the seller.
Moreover, the buyer will also be required to file a statement of returns for the TDS in form 26 QB, within 30 days from the date on which the tax had been deducted.
What details in Form 26 QB can be corrected?
There were no legal provisions in place prior to Financial Year 2013–14 to allow corrections for TDS returns filed in form 26 QB. This caused a lot of problems for property buyers filing their TDS returns in this form. Consequently, in order to overcome these problems, the government added a new clause to section 194 IA of the Income Tax Act through the Finance Act of 2014-15, allowing corrections for the form, only after the approval of the jurisdictional Assessing Officer.
Although ITR filers found this provision to be very useful, the procedure itself was extremely exhaustive and time-consuming. So, the government, in the year 2016, introduced an online correction facility for form 26 QB on the web-based platform, TRACES.
As a result, starting on February 29th, 2016, TDS deductors who are registered on TRACES can submit online correction requests for form 26 QB and make the necessary revisions in little to 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 for making 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.
Stepwise process for making corrections in Form 26QB using E-Verification (Internet Banking)
Step 1: Log in to your Internet banking account
Login to your Internet banking account on the official website of your Bank. Then click on ‘View 26AS.’ Then you will be directed to a new page, where you will have to click on the “E-Verified Services on TRACES” option. As soon as you click on this option, you will be directed to the official website TRACES.
Step 2: Log in to your TRACES account
Login to your registered TRACES account using your User ID, Password, and PAN / TAN details.
Step 3: Go to “Request for Correction”
Go to the “Statements and Forms” tab on your screen and choose “Request for Correction” from the dropdown.
Step 4: Select Form 26QB
You will be required to select the form that you wish to correct, and then click on “proceed”.
Step 5: Review the checklist
A checklist will appear on your screen, mentioning certain conditions required to be met before you proceed with the correction request. We have already discussed these conditions in the previous section. You are required to review the checklist, and once you are done, you can ‘Proceed’.
Step 6: Enter details
You will be required to enter details like Assessment Year, Acknowledgement Number and the PAN number of Seller. Once you have entered all the details, you can click on ‘File Correction’ and continue.
Step 7: Success Message
Success page will appear on the screen with a ‘Request Number’ generated for your correction request. You can use this request number to track the status of your request.
Step 8: Track the correction request
Use your Request Number to track the status of your correction request, the process for which we have discussed in the next section. Note that you can proceed with making corrections in form 26 QB, only after the status of your request shows “Available”. If the status shows as ‘Submitted’, you can wait for 24 to 48 hours for the status to change to ‘Available’, after which you can proceed with the correction of the form
Step 9: Enter Challan details
Before you proceed to make changes in the form, you are required to enter details of the challan paid during the submission of Form 26QB. These details include the Bank Branch Code, the date of tax deposition, serial number on the challan and amount of tax deposited through the challan. After having entered all these details accurately, you can ‘Proceed’ with the correction form.
Step 10: Correct the details
The details filled in Form 26QB will appear on the screen. Click on ‘Edit’ for correcting the details. We have already discussed the details that you can correct and the conditions for correcting such details in the sections above.
Step 11: Confirm the changes made
The updated details will appear on the screen highlighted in yellow colour. You can recheck them and once you are sure that the details are accurate, you can click on ‘Confirm the Details‘ option. Your correction request will be submitted and you can download the acknowledgement of the request on TRACES itself.
How to check the status of the Correction Request made?
To check the status of your request, you can follow these simple steps:
- Go to ‘Statements and Forms’
- Choose the ‘Track Correction Request’ from the dropdown.
- Enter the Request Number or Date of submission of request to view your request. If you are unable to recall them, you can click on “View All” and then fetch your request from the list of all correction requests that appear on the screen
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 tenant or landlord 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, tenant or landlord 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 Tenant, then “cancelled” appears as the status.
- Rejected – Appears when the Correction Statement is rejected by Tenant, Landlord, AO or TDS-CPC.
Conclusion
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.
