Find
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.
ITR
Short deduction default from wrong TDS rate
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Provisions
Sec 201, Income-tax Act 1961 (now Sec 398, Income-tax Act 2025); Sec 194J, Income-tax Act 1961 (now Sec 393, Income-tax Act 2025); Sec 194C, Income-tax Act 1961 (now Sec 393(1) Table Sl. No. 6(i), Income-tax Act 2025)
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.
Close
- Find the rows in the justification report
- Check section code and rate on each row against the contract or invoice
- Correct the section code where it was a reporting error
- If TDS was really short, pay the difference with interest
- File a correction statement
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