Answer

1. F

   Facts

   A short deduction default appears when the rate applied in the statement is below the rate CPC expects for that section and deductee. It often comes from a wrong section code, a missing lower deduction certificate, or a PAN issue.

2. P

   Provisions and law

   • Sec 201, Income-tax Act 1961 (now Sec 398, Income-tax Act 2025)A deductor who fails to deduct or pay TDS is treated as an assessee in default
   • Sec 194J, Income-tax Act 1961 (now Sec 393, Income-tax Act 2025)TDS on fees for professional or technical services
   • Sec 194C, Income-tax Act 1961 (now Sec 393(1) Table Sl. No. 6(i), Income-tax Act 2025)TDS on payments to contractors
3. A

   Analysis

   Check the section code on each row. Example: a 2% rate under Sec 194C (now Sec 393(1) Table Sl. No. 6(i)) is correct for a firm contractor, but if the row was coded as professional fees under Sec 194J (now Sec 393), CPC expects 10% and shows a short deduction of 8%. Correct the section code if the payment really was a contract. If you actually deducted too little, deduct and pay the difference with interest.

4. C

   Conclusion

   1. 1Find the rows in the justification report
   2. 2Check section code and rate on each row against the contract or invoice
   3. 3Correct the section code where it was a reporting error
   4. 4If TDS was really short, pay the difference with interest
   5. 5File a correction statement

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.