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TDS

TRACES Registration For The Taxpayer: The Complete Guide

In this article we will discuss the TRACEs system launched by the government and understand its features and it functioning

Overview

Population is a very large factor when it comes to considering digitization. So it goes without saying that digitization is not just an advancement but a necessity for a country as populous and yet enterprising as ours. With the highest number of taxpayers in the world, against a severely understaffed and underfunded tax department, digitization became a top priority in terms of solving the massive tax leaks in our tax revenue collection system. One of the aspects of the system that urgently needed some sort of digital solution was the TDS system. The TDS system is a very efficient way of plugging the leak in tax revenue when it came to income groups with a uniform source. The person who pays the taxable income is made responsible for calculating, deducting and remitting the taxable income before making the payment to the taxpayer. But the amount of set offs required too many regulations and compliances which in the larger picture was burdening the resources of businesses. So a comprehensive system was introduced by the authorities in the form of TRACES Portal.

When the onset of digitalization did not take place, all the legal work was manual, with the people having to wait for their turns for long hours just to file a form to complete the registration. But, the coming in of all the technological advancements and their incorporation for legal procedures has been of great benefit and relief to the government, making it easier for them to maintain records. Also, it has saved the time of all the individuals who had to visit the office for all the legal proceedings including the filing of TDS.

But, what all activities are carried out and how is all of this done? Let’s find out here!

What Is TRACES?

The full form of TRACEs is the TDS Reconciliation Analysis and Correction Enabling System. It is an online portal through which the income tax proceedings related to TDS TRACES Form 16B, Form 16A, and Form 26AS are carried out. One can view and download key tax documents such as Form 16A, Form 16 and Form 26AS.

Use Of The TRACES Portal

The TRACES portal is an online portal provided by the Income Tax Department of India for Tax Deducted at Source (TDS) and Tax Collected at Source (TCS). TRACES Portal allows taxpayers and deductors to perform a variety of tasks, including:

  • View and download Form 26AS
  • File for TDS/TCS statement corrections
  • View challan status
  • Check the status of various tax statements online
  • Submit refund request online
  • Download the consolidated (conso) file, Justification Report and Form 16 and Form 16A (for TDS deductors only)
  • Complete online correction of previously filed TDS Returns
  • Online correction of OLTAS Challan

Key Links on the TRACES Portal

The following are some of the key links on the TRACES Portal:

  • TDS/TCS Statement Correction
  • View/Download Form 26AS
  • View Challan Status
  • Request Refund
  • Download Consolidated File
  • Download Justification Report
  • Download Form 16/16A
  • Aggregate TDS Compliance Report
  • Request Status Check
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TRACES Portal Registration For The Taxpayer: The Complete Procedure

To access the services mentioned above through the TRACES portal, all individuals must get the TRACES Portal registration done at the portal. The steps involved in TRACES registration are as follows:

  • Open the TRACES portal to get the TDS TRACES registration done through the link of the portal
  • Next, on the webpage, on the left side in the login section, click on the option “Register as a new user”.
  • Under this, the individual can register as a taxpayer, deductor or PAO (Pay and Accounts Office).
  • For registration as a taxpayer, click on the taxpayer tab.
  • A new page opens up, where you register as a new user.
  • On this page, the individual needs to fill in the following details:
  • PAN details
  • Date of Birth (DOB)
  • Taxpayer’s name
  • TDS deduction/collection details
  • Challan details
  • Details of form 26QB
  • After filling in all the details, click on the option “Create Account”. A screen appears asking for the confirmation of all the details submitted. 
  • After the confirmation, one must submit all the details including the activation link and code on the register mail address and phone number.

TRACES Services Offered to Deductor

The TRACES portal offers a variety of services to deductors, including:

  • File TDS/TCS statements
  • Correct TDS/TCS statements
  • View challan status
  • Download consolidated file
  • Download Justification Report
  • Download Form 16/16A

TRACES Registration For Deductor

The steps for the TDS TRACES registration for deductor are as follows:

  1. Open the TRACES portal
  2. On the login column, click on the option of “Register as New User”.
  3. Next, from the various tabs, click on the “Deductor” tab.
  4. Fill in the required details on the page.
  5. After filling in the details, click on the submit option to complete the registration.
  6. Further, after completion of the TDS TRACES registration, an activation link and code is sent on the registered mail address and mobile number.
  7. One can use the credentials to log in on the TRACES portal.
  8. TDS TRACES Form 16B: Download through the portal

The TDS TRACES form 16B has to be submitted by the individuals after the TDS payment of tax on the immovable property. The TDS TRACES form 16B can be downloaded through the TRACES portal through the following steps:

  1. Open the TRACES portal.
  2. Login using your credentials.
  3. Under the downloads section, choose form 16B.
  4. After downloading the form 16B, it can be submitted to the government or used as per the requirements. 
  5. What is Traces Justification Report?
  6. This report specifies the errors/defaults that a deductor needs to rectify.  The rectification can follow by filing a statement of correction along with paying the requisite fees. 

How To Correct TDS/TCS Statements On TRACES Portal?

You can do the corrections for Personal Information, Deductee details, Challan correction, etc online. Here are the steps:

  1. Go to the TRACES portal.
  2. Under defaults Tab, choose ‘Request for correction’
  3. Put the details, i.e. quarter, financial year, form type. And also the recent accepted token number. Choose the category as ‘Online’.
  4. Now, you will get a request number.
  5. The request will be available under “Track Correction Request”
  6. When this status becomes “Available” click on Available/In progress and then proceed ahead with the correction
  7. Fill valid KYC details.
  8. Choose the ‘Challan Correction’ as a type of your category.
  9. Do the corrections in the file
  10. Click on “Submit for Processing”
  11. 15 digits token number will be generated and sent to the registered mail id.  

What is the TRACES Justification Report?

The TRACES Justification Report is a report that deductors can generate to explain any discrepancies between their TDS/TCS payments and the TDS/TCS credits reflected in Form 26AS. This report is required to be submitted along with the TDS/TCS return if there are any discrepancies.

Form 16/16A Download from TRACES

Deducors can download Form 16/16A from the TRACES website. Form 16 is a certificate that deductors are required to issue to their employees to show the amount of TDS deducted from their salaries. Form 16A is a certificate that deductors are required to issue to other deductees, such as contractors and professionals, to show the amount of TDS deducted from their payments.

TRACES Login Using Registered TAN

Deductors can log in to the TRACES website using their registered TAN. TAN is a 10-digit alphanumeric number that is assigned to deductors by the Income Tax Department.

TRACES Services for Tax Payer

The TRACES portal offers a variety of services to taxpayers, including:

  • View and download Form 26AS
  • Request refund
  • Check the status of various tax statements online

TRACES Form 26AS Download by Tax Payer

Taxpayers can download Form 26AS from the TRACES website. Form 26AS is a statement that shows all the TDS/TCS credits that have been deposited against the taxpayer’s PAN. This statement is useful for taxpayers to verify that their deductors have deposited the correct amount of TDS/TCS on their behalf.

TDS TRACES Portal Services offered to PAO

The TRACES website offers a variety of services to Paying Authorities (PAOs), including:

  • View TDS/TCS statements filed by deductors
  • Verify TDS/TCS payments
  • Issue TDS/TCS refunds

Online Correction Services Status on TRACES Portal

Taxpayers and deductors can check the status of their online correction requests on the TRACES website.

Steps for Aggregate TDS Compliance Report

The Aggregate TDS Compliance Report is a report that deductors are required to generate and submit to the Income Tax Department. This report provides a summary of all the TDS/TCS payments made by the deductor during a financial year.

Request Status Check on TRACES Portal

Taxpayers and deductors can check the status of their various requests on the website. This includes the status of TDS/TCS statement corrections, refund requests, and online correction requests.

FAQs

How many times can an individual get their TAN registered on the portal?

The individual can complete the registration only once for a specific TAN.

How many user accounts can an individual make using one TAN?

An individual can make 4 user accounts under one TAN.

What is the full form of TRACES in income tax?

TRACES stands for TDS Reconciliation Analysis and Correction Enabling System.

What does TRACES do?

TRACES is an online portal provided by the Income Tax Department of India for Tax Deducted at Source (TDS) and Tax Collected at Source (TCS). It allows taxpayers and deductors to perform a variety of tasks, including:
● View and download Form 26AS
● File for TDS/TCS statement corrections
● View challan status
● Check the status of various tax statements online
● Submit refund request online
● Download the consolidated (conso) file, Justification Report and Form 16 and Form 16A (for TDS deductors only)
● Complete online correction of previously filed TDS Returns
● Online correction of OLTAS Challan

What is the difference between NSDL and TRACES?

NSDL is a depository that provides services for electronic storage and transfer of securities. TRACES is an online portal provided by the Income Tax Department for TDS and TCS.
The main difference between NSDL and TRACES is that NSDL is a depository, while TRACES is a portal. NSDL provides services for electronic storage and transfer of securities, while TRACES provides services for TDS and TCS.

Is it mandatory to register in TRACES?

It is mandatory for deductors to register in TRACES if they are deducting TDS/TCS from payments made to others. Taxpayers are not required to register in TRACES, but they can access the portal to view and download Form 26AS and check the status of their various requests.

What are TDS and TRACES?

TDS stands for Tax Deducted at Source. It is a system of tax collection in India where the person who makes a payment deducts tax at the source and deposits it with the government on behalf of the payee. TRACES is an online portal provided by the Income Tax Department for TDS and TCS.

What is the full form of 26AS?

26AS is a statement that shows all the TDS/TCS credits that have been deposited against the taxpayer's PAN. This statement is useful for taxpayers to verify that their deductors have deposited the correct amount of TDS/TCS on their behalf.

What is the process of TRACES?

The process of TRACES is as follows:
● Deductors deduct TDS/TCS from payments made to others and deposit it with the government.
● The government updates the taxpayer's Form 26AS with the TDS/TCS credits that have been deposited.
● Taxpayers can access TRACES to view and download Form 26AS.
● Deductors can access TRACES to file TDS/TCS statements, correct TDS/TCS statements, view challan status, and download consolidated files, Justification Reports, and Form 16/16A.

What are the kinds of TRACES?

There are two kinds of TRACES:
● TRACES for deductors
● TRACES for taxpayers

How do I get 26AS?

Taxpayers can get Form 26AS from the website or from the Income Tax Department website.

What is TDS in income tax?

TDS stands for Tax Deducted at Source. It is a system of tax collection in India where the person who makes a payment deducts tax at source and deposits it with the government on behalf of the payee

Conclusion

As such, apart from the above-mentioned services that can be accessed through the TRACES portal, there are several other services as well. The TRACE portal is one of the most convenient and hassle-free methods for the registration, viewing, and downloading of the legal forms. Additionally, the corrections on these forms can also follow through the online portal.

However, given the technical nature of the procedure involved and the punitive consequences of non-compliance, it is always advisable to consult a trained and experienced expert to guide you through the process and ensure that there are no discrepancies. If you are looking for any kind of assistance with regards to your tax requirements, get in touch with us and we will ensure that you receive the right kind of help depending on your requirements.

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