Steps to Claim and Rectify a Wrongly Deposited Challan

Steps to Claim and Rectify a Wrongly Deposited Challan

This blog provides an insightful overview of rectifying a common yet specific error in income tax challan payments, particularly when a payment meant for NON-TDS/TCS (CHALLAN NO./ITNS 280) is mistakenly deposited under TDS/TCS (CHALLAN NO./ITNS 281).  Here’s a more structured breakdown of the steps discussed:

Understanding the Issue

• Nature of the Mistake: The payment is deposited under a TAN (Tax Deduction and Collection Account Number) instead of a PAN (Permanent Account Number).
• Challenges: Such errors cannot be rectified directly via the TRACES portal or by the TDS department itself.

Steps to Claim and Rectify a Wrongly Deposited Challan:

• Understand the Unique Issue: The key mistake here is the payment made under a TAN (Tax Deduction and Collection Account Number) instead of a PAN (Permanent Account Number).
• Rectify Using TRACES Portal (if applicable): Minor errors like incorrect sections or TAN-related issues can be rectified directly on the TRACES portal. For this, log in to the TRACES portal and request corrections if available. However, for TAN to PAN correction, the TRACES portal cannot handle this issue, and manual intervention is required.
• Draft and File a “TAN to PAN Correction” Request: Prepare a detailed application titled “TAN to PAN Correction”. Address this application to the Assessing Officer (A.O.) under the PAN jurisdiction of the taxpayer. Include details such as:
  • Incorrect TAN used.
  • Correct PAN.
  • Challan details (Challan Identification Number, amount, and payment date).
  • Nature of the error and request for correction.
• Submit the Request to the Assessing Officer: File the written application with the relevant A.O. who handles the PAN. Ensure the challan is unclaimed before filing the application, as claimed challans cannot be transferred.
• O. Sends the Request to TDS Department: The A.O. will process the application and forward a request to the TDS Department to transfer the challan from TAN to PAN.
• TDS Authority Approves the Transfer: Upon receiving the request from the A.O., the TDS authority will process the correction and transfer the challan from the TAN account to the PAN account. Once done, the challan will reflect under the taxpayer’s PAN.
• Further Correction by A.O. (Type of Payment): After the TAN-to-PAN transfer, the A.O. needs to correct the Type of Payment to ensure it reflects appropriately (e.g., Advance Tax, Self-Assessment Tax, etc.). Types of payments include:
  • 100: Advance Tax
  • 300: Self-Assessment Tax
  • 400: Tax on Regular Assessment, etc.
• Final Credit to PAN: Once all corrections are complete, the A.O. will ensure the taxpayer receives credit for the challan in the PAN account.

Ensure the challan is unclaimed before filing the correction request. Maintain proper documentation, including proof of payment and acknowledgment of the challan. Communicate proactively with the A.O. and follow up to ensure timely processing. This procedure will help rectify the error and ensure the credit of the wrongly deposited challan is reflected under the correct PAN and payment type.

COMPARISON OF OLD SECTION V/S NEW SECTIONS

Request for Correction of Challans from TAN to PAN for the Assessment Year(s) [Specify Year(s)]

The CIT/DCIT/ACIT (As per the case)
Ward/Circle/Range
[Office Address]

From:
[Assessee’s Name]
[Address]
[Contact Details]

Subject: Request for Correction of Challans from TAN to PAN for the Assessment Year(s) [Specify Year(s)]

Dear Sir/Madam,

With reference to the subject above, we wish to bring to your kind attention that certain tax payments, such as Dividend Distribution Tax (DDT), Self-Assessment Tax, or other payments, were inadvertently deposited under TAN No. XXXX01234X instead of the correct PAN No. XXXX0123X. The payment was made using Challan No. ITNS-281 instead of Challan No. ITNS-280.

The details of the challans requiring correction are tabulated below:

Assessment Year	BSR Code	Challan Date	Serial No.	Amount (₹)	Correction Required
[Enter Details]	[Enter Details]	[Enter Details]	[Enter Details]	[Enter Details]	Transfer from TAN to PAN

Since all the above-mentioned challans remain unclaimed by the assessee, we kindly request your office to transfer the payment credits from TAN No. XXXX01234X to PAN No. XXXX0123X. This will ensure the requisite credit of taxes is correctly reflected in our account.

We have enclosed the necessary supporting documents for your consideration:

1. Copy of Challans
2. Bank Statement or NOC
3. Indemnity Bond(s)
4. Any other supporting documents, as required.

In case the Department requires, the reply and enclosures can also be submitted in CD format (within 2 MB as a single PDF).

We request you to kindly process this correction at the earliest. The assessee shall be highly obliged for your assistance.

Thanking you,

Yours Faithfully,

[Name of Assessee]
[Designation, if applicable]
[Signature]