Short Deduction TDS Demand due to inoperative PAN of deductee at time of deduction.

[ROHIT GOEL]

Dear Sir/Maam

In FY 2023-24 we deducted TDS at 2%, but since the deductee’s PAN was inoperative at that time, the system raised a 20% short deduction demand. The PAN has now been made operative, but only after 31.05.2024, so we don’t fall under the relief window given in CBDT Circular 06/2024. Even after filing correction, the demand is still showing. What would be the correct way to handle this?

[Ganeshan Kalyani]

Did the recipient got the credit into his 26AS ?

AI Summary

Inoperative PAN causes short TDS demand despite later regularisation; correction filed but demand still appears in system. Short deduction of TDS arose because the deductee's PAN was inoperative at the time of deduction, producing a system short-deduction demand at a higher rate; the PAN was later regularised after the relief window expired, a correction statement was filed, but the demand continues to show, and a respondent asks whether the recipient received credit in Form 26AS.