Download Justification Report to Reply to TDS Demand Notice

Many deductors receive a TDS (tax deducted at source) demand notice from the Income Tax Department. A TDS demand notice could be sent for any one of the following defaults:

• Short payment
• Short deduction
• Interest on payments default under section 201(1A)
• Interest on short payment
• Interest on late payment
• Additional late payment interest
• Interest on deduction default under section 201(1A)
• Interest on short deduction
• Interest on late deduction
• Additional late deduction interest
• Short payment on account of late filing fee
• Additional late filing levy
• Interest under section 220(2)

The TDS demand notice does not inform the deductor about the reason behind the notice. To find out the reason for default, the deductor has to download a justification report from the TRACES website. The justification report contains all details about the TDS demand notice. ClearTDS will help you to download justification report and make corrections accordingly. Here is a step-by-step guide on how to download a justification report:

Step 1: Login to Cleartds, Go to “TDS returns” dash board under “Deductor”, then click on “Work on this return” to which the default notice belongs.  

You can find “Import from TRACES” at the bottom of the page.

Step 2: Under “Import from TRACES“, click on the ‘Request for Justification Report’ enter the TRACES username, password and Token number.

Challan details, PAN and Amount of TDS deposited  for three deductee’s are pre-filled if have filed the Original/correction TDS return through ClearTDS or else you will have to update manually.  

After filling the required information, click on “Submit Request to TRACES”, then enter the CAPTCHA code for final submission of request.

The request has sent to TRACES, it will be processed after 4 hours. You can download the justification report once the status is “Available”.

Step 3: Save the file on your computer and open it to find out why a TDS demand notice was sent to you. Make the corrections based on the reasons mentioned in Justification report. To make correction you can read this guide.