How to close short TDS Payment defaults and Consequences:

Immediate Attention:
Online Correction facility at TRACES should be used for closure of Short Payment defaults. CPC (TDS) processes such statements within 24 hours of submission of such corrections.

To facilitate non-intrusive TDS Compliance, Short Payment Defaults ought to be closed at the time of submitting requests to download Conso Files and TDS Certificates from the web portal TRACES.

Since the due date for Q4 filing of TDS statements and subsequent distribution of
TDS Certificates is approaching fast, you are requested to close the above
defaults without any further loss of time.
Consequences of failure to pay the demand:
As per the provisions of section 220 of the Act, Any amount, specified as payable
in a notice of demand shall be paid within thirty days of the service of the notice.
If the amount specified in any notice of demand is not paid within the period
limited under sub-section (1), the assessee shall be liable to pay simple interest
at one per cent for every month or part of a month comprised in the period
commencing from the day immediately following the end of the period mentioned
in sub-section (1) and ending with the day on which the amount is paid.
If any person fails to deduct or pay the whole or any part of the tax, then, such
person shall be liable to pay, by way of penalty, a sum equal to the amount of
tax which such person failed to deduct or pay under Section 271C of the Act.
Failure to pay tax to the credit of Central Government is punishable with fine as
per the provisions of section 276B/ 276BB.
Section 278A of the Act prescribes for punishment for second and subsequent
offences, if any person has been convicted of an offence under section 276B.
Action to be taken:
Use Challan ITNS 281 to pay the demand with your relevant Banker, if there are
no challans available for consumption. Please wait for 2/3 days for the challan to
be updated with TRACES.
Please download the Justification Report from our portal TRACES to view your
latest outstanding demand.
Please use the Online Corrections facility on TRACES to submit corrections, to
payoff/ close the demand.
To avail the facility, please Login to TRACES and navigate to Defaults tab to
locate Request for Correction from the drop-down list. You can refer to our e-
tutorials for necessary help.
In case of Short Payment Defaults due to Unmatched Challans, please use Tag
Unmatched Challan facility using Online Corrections.
In case of Short Payment Defaults due to Insufficient Challans, please use Move
Deductee facility using Online Corrections. With use of this feature, a portion of
the Deductee Rows can now be moved to any other Unconsumed OLTAS challan
with adequate balance.