TDS - TDS Notice & Responses

What is a TDS Notice?

A TDS Notice is an official intimation issued by the Income Tax Department to a deductor — i.e., an individual, business, or organization responsible for deducting tax at source (TDS). These notices are generally sent due to:

Non-deduction or short deduction of TDS
Non-payment or delayed payment of TDS
Failure or delay in filing quarterly TDS returns
Mismatch between TDS returns and Form 26AS
Other compliance-related irregularities

Receiving a TDS notice requires timely and accurate response to avoid penalties and prosecution. At VETRI AUDIT SERVICES PRIVATE LIMITED, we specialize in end-to-end support for TDS compliance and notice handling.

Common Types of TDS Notices

Notice Type	Relevant Section	Purpose
Notice for non-deduction or short deduction	Section 201(1A)	Recovery of tax not deducted or deducted at a lower rate
Notice for late payment or non-payment	Section 201(1A)	Interest recovery for delay or default in depositing deducted TDS
Notice for non-filing of TDS returns	Section 272A(2)(h) / 271H	Penalty notice for not filing or delayed filing of TDS returns
Notice for mismatch in TDS returns	Section 201A	Addressing discrepancies between filed returns and Form 26AS
Reassessment notice	Section 148	Reopening of assessment due to TDS-related irregularities

How to Respond to a TDS Notice

Dealing with a TDS notice involves careful documentation, analysis, and strategic response. Here's our step-by-step process:

1

Understand the Notice

Read the notice thoroughly to identify the issue, applicable tax period, and demand details.

2

Verify Records Internally

Check your TDS deduction registers
Validate Form 16/16A issued
Confirm TDS return filings (Form 24Q/26Q)
Match challan payment details with Form 26AS

3

Draft a Detailed Reply

If TDS was deducted and deposited: attach challan copies, TDS certificates, and filing acknowledgments
If TDS was short/not deducted: deposit tax with interest and provide payment proof
If it's a clerical error: revise the TDS return and seek rectification

4

Submit Response

Upload the response and attachments on the Income Tax E-Filing Portal or as per the instructions in the notice .

5

. Maintain Records

Keep a backup of all responses, submissions, and acknowledgments for future reference

Timeframe to Respond

Most notices require a response within 15 to 30 days of receipt
In case of complex issues, you may request an extension by citing valid reasons and supporting documents.

Consequences of Not Responding

Failure to act on a TDS notice may lead to:

Accrual of interest and penalties
Initiation of penalty proceedings
Expense disallowance during assessments
Prosecution for serious or wilful defaults

Early resolution is critical to avoid long-term financial and legal implications.

Best Practices to Avoid TDS Notices

Proactive compliance can help you steer clear of TDS-related issues. We recommend:

Deducting TDS at correct rates as per Income Tax Act
Depositing TDS within due dates
Filing accurate quarterly TDS returns (Form 24Q/26Q/27Q)
Issuing Form 16/16A timely to deductees
Periodically reconciling with Form 26AS and correcting mismatches

How VETRI AUDIT SERVICES Can Help

At VETRI AUDIT SERVICES PRIVATE LIMITED, we offer comprehensive TDS support services, including:

Regular TDS compliance and filing
Systematic reconciliation of TDS data with Form 26AS
Expert representation and response drafting for TDS notices
Advisory on interest, penalty calculations, and corrective action
End-to-end documentation and e-filing assistance

With our expert team by your side, you can ensure peace of mind and seamless compliance with TDS regulations.

Contact us today to resolve your TDS notice or to stay compliant with TDS obligations.

TDS Notice & Responses