What Are TDS Traces?

Introduction

TDS (Tax Deducted at Source) is a tax collection mechanism implemented by the Indian government to ensure timely tax payments by individuals and entities. TDS is a significant source of revenue for the government and plays a crucial role in the country's fiscal management. On the other hand, TDS TRACES refer to the platform that facilitates the verification and correction of TDS-related information. This blog delves into the various aspects of TDS TRACES and how they impact taxpayers.

What are TDS TRACES?

TRACES (TDS Reconciliation Analysis and Correction Enabling System) is an online portal of the Income Tax Department, India. The platform connects all stakeholders involved in administering and implementing Tax Deducted at Source (TDS) and Tax Collected at Source (TCS). 

Alongside facilitating TDS correction and verification, TDS TRACES is a go-to source for downloading crucial tax documents such as Form 16, Form 16A, and Form 26AS. 
 

Uses of the TRACES Website

Now that you know TDS TRACES meaning, let’s learn about its uses.

●    One of the primary uses of the TRACES website is to download and view 26as traces upon login, which is a consolidated tax credit statement.
●    You can file TDS/TCS statement corrections and view challan status.
●    Taxpayers can check the status of various tax statements online and even submit refund requests through the TRACES website.
●    The website also provides a facility for TDS deductors to verify if the PANs for which they are deducting TDS are receiving credit.
●    Other features include viewing all deposit challans to the government, revising TDS returns if incorrect data has been filed, and accessing rates and tables for section-wise TDS Rates, TCS Rates, and Income tax slab Rates.
●    The TRACES website also allows users to view all filed returns from FY 2007-08 onwards, request refunds for unconsumed challans, find all Notices/Communications issued from Assessing Officers, and download certificates such as Form 16 and Form 16A.
 

Key Links on the TRACES Website

When you log into the TDS TRACES website, you will find the following key links:

●    Summary of the deductor's account on the dashboard
●    TAN (Tax Deduction and Collection Account Number) registration online
●    Forms for filing TDS online
●    TDS statement correction online
●    Default Resolution
●    Viewing the 26AS form
●    Registration and resolving grievances

TRACES offers three key categories of facilities/services:

●    Taxpayer services
●    Deductor services
●    PAO (Pay and Accounts Office) services
 

How to Register for TRACES as a Taxpayer?

Here’s how to register for TRACES as a taxpayer.

1.    Go to the TRACES website at www.tdscpc.gov.in and click the “Register as New User” link on the homepage.
2.    On the registration page, select “Taxpayer” as the user type from the drop-down menu.
3.    Fill in the required details such as PAN, name, date of birth/incorporation, and contact details. You will also need to create a password for your account.
4.    After entering all the details, click the “Submit” button to complete the registration process. You will receive a confirmation email with a link to activate your account.
 

How to Register for TRACES as a Deductor?

Here’s how to register for TRACES as a Deductor:

1.    Go to the TRACES website at www.tdscpc.gov.in and click the “Register as New User” link on the homepage.
2.    On the registration page, select “Deductor” as the user type from the drop-down menu.
3.    Enter your Tax Deduction and Collection Account Number (TAN) and click “Proceed.”
4.    Verify your TAN details and click on “Proceed” to continue.
5.    Fill in your details, such as name, designation, date of birth, mobile number, and email address.
6.    Create a strong password for your account and select two security questions and answers.
7.    After entering all the details, click the “Submit” button to complete the registration process. You will receive a confirmation email with a link to activate your account.
 

How to Login to the TRACES Portal?

Here are the steps for TDS TRACES login.

1.    Go to the TRACES website at www.tdscpc.gov.in.
2.    On the homepage, click the “Login” button located at the page’s top right corner.
3.    Select your user type (Taxpayer or Deductor) from the drop-down menu.
4.    Enter TDS TRACES login Credentials such as User ID, Password, and TAN/PAN (as applicable).
5.    Enter the captcha code displayed on the screen and click on “Log in.”
6.    Verify your details and click on “Proceed” to continue.
7.    Select your role (Regular or AO) from the drop-down menu if you are a Deductor.
8.    After successfully logging in, you will be redirected to your dashboard where you can access various features and services of the TRACES portal, such as view 26as TRACES login.

TRACES Justification Report

The Justification Report on TDS TRACES is a critical document that provides detailed information on any errors or discrepancies detected by the Income Tax Department (ITD) while processing the deductor's TDS statement for a specific quarter of the fiscal year. This report is a reference for the deductor to identify and rectify the errors to remain compliant with the tax regulations. 

The report includes comprehensive data on the nature and extent of the errors detected, enabling the deductor to take corrective measures, such as filing a correction statement and paying the requisite interest, fees, or other dues. Additionally, the report also allows the deductor to provide clarifications to the tax authorities regarding any discrepancies found, further streamlining the correction process and ensuring TDS compliance.
 

How to Generate a TRACES Compliance Report?

The TDS Compliance Report is a comprehensive tool for identifying defaults across all TANs associated with an entity-level PAN.  Here’s how you can generate the report.

1.    Login to TRACES as a taxpayer to initiate the procedure.
2.    Click on the 'Aggregated TDS Compliance' tab.
3.    Choose from the available options to generate the report based on either default or fiscal year.
4.    Click the 'Submit Request' button to proceed.
5.    Download the corresponding Excel file from the 'Requested Downloads' section in the 'Downloads' menu once the request has been submitted.
 

What is the Request for Resolution Facility?

The "Request for Resolution" feature empowers taxpayers to address their grievances with ease. Utilising this service involves a straightforward process, which is as follows:

Step 1 - Login to TRACES as a taxpayer with your registered user ID and password to gain access to the feature.
Step 2 - Navigate to the 'Request for Resolution' tab.
Step 3 - Choose the category of concern for which you require resolution.
Step 4 - Select the relevant assessment year.
Step 5 - Provide the necessary information and submit your request.
Step 6 - Following the submission, a ticket number is generated, confirming that your request has been successfully received.
 

Ticket Status on TRACE

Below is the outcome of TDS TRACES' ticket status check options.

●    Open: The ticket has been assigned to an assessing officer, who will respond within a certain period.
●    In Progress: There has been clarification provided by the requestor/assessor.
●    Clarification Asked: There has been a request for clarification from the tax authorities. Within 30 days, the ticket will be closed if no response is provided.
●    Request for Closure: It indicates that the assessee has received clarification from the deductor and has been notified. The ticket will be automatically closed if no action is taken within 30 days.
 

Form 16/16A Download from TRACE

Follow these steps to download forms 16/16A. 

1.    Visit the TRACES website at www.tdscpc.gov.in and log in as a Deductor using your User ID, Password, TAN/PAN, and captcha.
2.    Go to the “Downloads” tab and select “Form 16/16A” on your dashboard.
3.    Select the Financial Year and PAN for which you want to download the TDS certificate and click on “Go.”
4.    Verify the details of the Authorised Person that will appear on the screen and click on “Submit.”
5.    A success page will appear with a generated Request Number. Go to the “Downloads” tab and enter the Request Number or Request Date to view your request. If the status of your request is “Available,” click on the download button to download your Form 16/16A.

Please note that only Deductors can download Form 16/16A from TRACES. If you are a Taxpayer, you must request your Deductor to provide you with Form 16/16A.