A detailed understanding of TRACES for TDS

Introduction to TRACES

TRACES stands for TDS Reconciliation Analysis and Correction Enabling System and has been set up by TDS Centralised Processing Cell of the income-tax department.

The TRACES website can be visited at https://contents.tdscpc.gov.in/

TRACES integrates the following components:

  1. Tax Information Network
  2. Automated TDS Challan Matching
  3. TDS Defaults Processing
  4. IVR/ Call Centre
  5. Web Portal

The portal has been created using the latest technology to enhance swift interaction between the deductor, deductee, income-tax department, and CPC.

Deductors / Collectors, PAOs and Tax Payers will have to register on TRACES to create their account and view functionalities enabled for each user. Deductors/collectors will be able to view the status of challans. TRACES also enables deductors/collectors to view TDS / TCS credit and verify PAN of Tax Payers linked to the deductor/collector.

Tax Payers will be able to view the annual tax credit for their PAN for the TDS / TCS amount deducted by deductors (Form 26AS). Tax Payers can also view if deductor has filed the statement for a particular FY and Quarter and whether their PAN is included in the statement filed by deductor and download Form 16B as a buyer.

Highlights of the Portal

  • Dashboard giving summary of Deductors account
  • Online registration of TAN
  • Online filing of TDS Statements
  • Online corrections of TDS statements
  • Default Resolution
  • View Form 26AS
  • Download Form 16/16A/Consolidated TDS File
  • Grievance registration and resolution
  • 26QB Correction
  • Refund Functionality

The portal is for use by the following types of users:

  • Deductors / Collectors
  • Tax Payers
  • Pay Account Office (PAO)

The various services given by TRACES is as below;

  1. Registration on TRACES – Deductors and Taxpayers will be able to register on TRACES. This will enable them to create their own account profile and view the activities under the respective TAN/PAN. After successful registration on the website, the user will be able to login to their account.
  2. Electronic filing of TDS Statements (Original and Corrections) – Regular & Correction return filing of TDS statements, electronically, is available.
  3. View Statement Processing Status and TDS Defaults – After the statement is filed, deductor can view the status of statements. If a statement has been processed with defaults, the user can download intimation sent by TDS CPC for the statements having defaults.
  4. View Tax Credit Statement (26AS) – View Tax Credit Statement (26AS) helps taxpayers to view TDS Deductions details and payment of taxes.
  5. Digital TDS Certificates – Deductor can download TDS certificates (Form 16/16A) after processing of TDS statement and provide to taxpayers. These deductions also reflect in 26AS of taxpayers for claiming deductions in Income Tax Return.
  6. Justification Report for details of TDS Defaults – Justification report provides a consolidated report of defaults for a statement. Once a return has been processed with defaults, a Justification Report is prepared for the deductor to view the default justifications. This assists the deductor in the filing of the correction statement for rectification of the identified defaults.
  7. Consolidated File for submitting corrections – TRACES provides an option to deductors to download the consolidated file as per NSDL to enable filing of correction statement through TIN-FC.
  8. Aggregated TDS Compliance Report – Aggregated TDS Compliance Report helps taxpayer for knowing defaults against multiple TANs associated with PAN of Deductor.
  9. Online TDS Statement Corrections – Online Correction statement available on TRACES for deductors for fast submission and processing of the statements.
  10. TDS Refunds – Deductors will be able to submit their refund requests through TRACES. A refund request can be submitted for a maximum of five challans.

You can also see how it works in Saral TDS: