TDS and TCS compliance consolidates TAN, PAN, higher-rate defaults, tax deposits, reporting statements and correction mechanisms.

Section 397 consolidates TDS and TCS compliance relating to TAN, PAN, tax deposits, prescribed statements and reporting. Persons responsible for deduction or collection must generally obtain and quote TAN, while deductees and collectees must furnish PAN. Failure to furnish PAN attracts higher deduction or collection rates, invalidates specified declarations and restricts lower or nil rate certificates, subject to prescribed exceptions. Deductors, collectors and specified employers must deposit tax, file prescribed statements, report certain non-resident payments, and may furnish correction statements. Collectors remain liable to deposit tax even if it has not been collected.

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