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TDS correction statement and default resolution on TRACES

  • When TRACES shows a TDS default or a payee cannot see their credit, the fix is a correction statement.
  • Deadline: Within two years from the end of the tax year in which the original statement was due (Sec 397(3)(f)). Default orders are time-barred after six years, or two years from the end of the year of the correction statement, whichever is later.
  • Done in 3 to 5 working days after TRACES access; online corrections process within about 24 hours
  • Prepared by your Savvy, checked by a CA
  1. TRACES login with admin rights
  2. What does the intimation or justification report list
  3. Download the justification report
  4. Correction request number and 15-digit token
The law and the stepsPay and start · ₹2,499As needed, + 18% GST

Answer in brief

When TRACES shows a TDS default or a payee cannot see their credit, the fix is a correction statement. We read the justification report, pay what is really due, correct challans and PANs on TRACES, and get the demand cleared.

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From the official sources

What the law says, and what trips people up

From the official portal's manuals and FAQs, with the source for each point.

The law

  • Income-tax Act 2025, Sec 397(3)(f)

    Correction statement allowed to fix discrepancies or update information within two years from the end of the tax year in which the statement was dueSource

  • Income-tax Act 2025, Sec 399 (processing, corresponds to old Sec 200A)

    Statements and corrections are processed for arithmetic errors, apparent incorrect claims, interest and fee; intimation within one year from the end of the tax year of filingSource

  • Income-tax Act 2025, Sec 398 (old Sec 201)

    Assessee in default; interest 1% and 1.5% a month; no default if payee filed return, included income and paid tax, with an accountant's certificate; order limits six years or two years from correctionSource

  • Income-tax Act 2025, Sec 427 (old Sec 234E)

    Late filing fee ₹200 a day capped at tax deductibleSource

  • Income-tax Act 2025, Sec 461 (old Sec 271H)

    Penalty for incorrect information in a statement: ₹10,000 to ₹1,00,000Source

  • Government fee

    No fee for filing a correction. Any short payment, interest or late fee shown in the intimation is paid by challan (https://newblog.tdsman.com/?p=5030).

  • Late fee or penalty

    Late fee under Sec 427 at ₹200 a day for the original statement if it was late (https://www.incometaxindia.gov.in/w/section-427-5). Interest under Sec 398(3) on short or late payment (https://www.incometaxindia.gov.in/w/section-398-5).

On the portal

  1. Login to TRACES as deductor
  2. Defaults > Request for Justification Report Download; download and open in the utility
  3. Defaults > Request for correction; enter tax year, quarter, form, category Online and latest token; note the request number
  4. When status shows Available, open it, validate KYC and make corrections (challan, PAN, deductee rows, interest or fee)
  5. Submit for processing as admin; token is emailed
  6. Defaults > Track Correction Request to check status
  7. For offline correction: request conso file, prepare in utility, validate and submit

What trips people up

  • Short payment shown though tax was paid

    Check challan tagging; move rows to a challan with balance or correct challan detailsSource

  • Lost the token number

    Download the conso file, which carries itSource

  • Cannot download conso file because a nil challan is unmatched

    Tag a challan with balance to the nil challan firstSource

  • No data available for KYC

    Contact the jurisdictional TDS Assessing OfficerSource

  • Booked challan amount cannot be changed

    Fix utilisation or use a different challan; the challan total stays fixedSource

  • Clarification Requested status left unanswered

    Reply within 7 calendar days or the request closesSource

People ask

Can I correct based on the Default Summary alone?

Yes, but TRACES advises downloading the latest justification report first.Source

Is there a limit on adding deductee rows?

No, as long as the tagged challan has enough balance.Source

Do I need DSC for every correction?

DSC is needed except for challan correction, challan addition and interest payment.Source

How long do corrections stay open?

Two years from the end of the tax year in which the statement was due.Source

What does the justification report contain?

Detailed defaults to be fixed by a correction statement and payment of dues.Source

IDFD

How we solve it: 4 steps

Every line tracked live.

Step 1 of 4 · What we need from you

Tap each one you already have

Ready0 / 7
  • TRACES login with admin rights
  • Latest token number or ARN
  • Challan and PAN-amount details for KYC
  • Registered DSCOptional
  • Intimation or demand notice
  • Books, ledgers and challan copies
  • Correct PANs from deducteesOptional

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As needed. Delivered in 3 to 5 working days after TRACES access; online corrections process within about 24 hours. Due: Within two years from the end of the tax year in which the original statement was due (Sec 397(3)(f)). Default orders are time-barred after six years, or two years from the end of the year of the correction statement, whichever is later.

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