1. Overview
- Legal Provision: Allows TCS collectorsto file a correction statement to rectify errors in previously filed TCS returns (e.g., Form 27EQ).
- Purpose: Correct mistakes in PAN, amount, rate, or other details to ensure accurate tax credits for buyers.
2. Key Provisions
1. When to File?
- Errors in Original Return:
- Incorrect PAN, amount, rate, or challan details.
- Duplicate entries or missing transactions.
- Deadline:
- Before the end of the relevant financial year(e.g., by March 31, 2025 for FY 2024-25).
- Late filings may attract penalties.
2. How to File?
- Log in to TRACES(TDS-CPC portal).
- Download Original Statement(Form 27EQ).
- Submit Correction Statement(with updated details).
- Validate with DSC/EVC(mandatory for companies).
- Types of Corrections Allowed
| ERROR TYPE | ACTION REQUIRED |
| Wrong PAN | Update buyer’s correct PAN. |
| Incorrect Amount | Adjust TCS collected/deposited. |
| Wrong Challan | Link correct BSR code/deposit date. |
| Duplicate Entry | Remove redundant transaction. |
3. Penalties for Non-Compliance
| DEFAULT | CONSEQUENCE |
| Late Correction | ₹200/day (Section 234E) until filed. |
| Incorrect Corrections | ₹10,000–₹1,00,000 (Section 271H). |
| Willful Misreporting | Prosecution (Section 276BB). |
4. Practical Example
- Scenario: A seller mistakenly reported ₹1 lakh TCSinstead of ₹1.5 lakh in Q1.
- Correction: Files revised Form 27EQvia TRACES with the updated amount.
- Buyer Impact: Correct TCS reflects in Form 26ASfor ITR credit.
5. Recent Updates (2024–25)
- Auto-Matching with AIS: Corrections must align with Annual Information Statement (AIS).
- Pre-filled Corrections: TRACES suggests common errors for faster resolution.
Key Takeaways
✔ File corrections before FY-end (March 31).
✔ Use TRACES for seamless updates.
✔ Avoid penalties by timely rectification.
✔ Buyers benefit from accurate Form 26AS data.
