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 diductors, 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 in TDS statements, and viewing annual tax credit statements.
This blog is intended for one of the most significant facilities of TRACES, the online correction of TDS statement of returns filed in Form 26 QC, and its e-verification using Internet banking. E-verification of correction requests can be done in three different ways, namely through DSC, through the approval of the Assessing Officer, and through internet banking.
What is Form 26 QC?
The government can deduct and collect taxes at the point of income generation on a variety of earned incomes. TDS, or tax deducted at source, and TCS, or tax collected at source, are the terms used to define these.
The Income Tax Act’s Section 194 IB mandates tax deduction and collection on income received from renting or leasing property. In accordance with this section, the landlord or lessor of a property that has been rented to an individual or a Hindu Undivided Family for a monthly rental fee that exceeds Rs. 50,000 is required to pay the government 5% of the entire rent received in the form of income tax.
This amount will be deducted as TDS by the tenant, and paid to the government on behalf of the landlord / lessor.
Additionally, the Income Tax Department must receive the statement of returns for such TDS payment in form 26QC filed by the tenant within 30 days from the end of the month in which the tax was deducted. However, form 26 QC must be submitted within 30 days from the end of the financial year if the tenant has paid the full rental amount for that entire financial year at once. The tenant can also file Form 26 QC within 30 days from the date on which the property has been willingly vacated by the tenant or due to the expiry/termination of the rent agreement.
What details can be corrected in form 26 QC?
The provision for online corrections in form 26 QC on TRACES was introduced in Financial year 2017-18. Using this facility, you can correct or update any detail mentioned in the application. A list of such details that can be corrected has been mentioned below.
- Details of the tenant (Name, address, and PAN)
- PAN details of the landlord / lessor (Name, address, and PAN)
- Date of rent payment received
- Date of TDS deducted
- Amount paid as TDS
- Details of the Property let out (Type of property and its address)
- Rental charges to be paid every month
- Rental charges paid in the previous month
What are the conditions to make corrections in form 26 QC?
The correction request for form 26 QC can only be filed by the tenant who is paying the rent of the property. However, for changing or updating certain details like the date and amount of rent received, PAN of the landlord, or PAN of the tenant, and the amount of TDS deducted, the approval of the landlord will be required. To submit the correction request you are required to fulfil the following prerequisite conditions:
- Your correction request can only be submitted if form 26 QC has been processed.
- Your request needs to be verified before submission for which 3 different options are available, through DSC, by obtaining the approval of the jurisdictional Assessing Officer, or by internet banking.
- If the DSC of the tenant is registered on TRACES, and the landlord is known, the tenant can opt for any of the above mentioned options.
- However, if the DSC of the tenant is not registered on TRACES, and the landlord is also unknown, the tenant has no choice but to opt for approval of the Assessing Officer.
- If the Digital Signature is not registered but the landlord is known, the tenant can either opt for verification through internet banking, or obtaining the approval of the Assessing Officer.
- If details related to the property (its address and name), tenant’s address, and the landlord’s address are to be corrected, the same can be verified or auto approved by the DSC of the tenant and landlord, irrespective of whether their DSCs are registered or unregistered.
- If the DSC of the tenant is not registered, and the correction request has been filed for details like the rent amount, date of payment of rent amount, and the date and amount of tax deduction, the request will be verified with the Assessing Officer’s approval only.
Steps for Form 26QC Correction on TRACES using Netbanking
Follow the steps given below to submit Form 26QC for correction on TRACES using the net banking or e-verification method.
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 26QC
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 landlord. 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 QC, 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 26QC. 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 26QC 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.
We hope that this blog has been helpful for you to understand the Form 26QC Correction using e-verify internet banking, and hope that you can now file your TDS return statements more efficiently, easily, and in a hassle free manner.