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A vendor reports that TDS deducted from their bill is missing in their Form 26AS, and the deductor's junior accountant does not know where to look.
Vendor credit depends on the deductor's matched challan and processed return quoting the right PAN, quarter and section; check these four in order.
Vendor complaint log with invoice, TDS amount, quarter, challan identification, return token number, PAN quoted and justification report finding.
Each complaint is traced to one cause and fixed with a challan correction or correction statement, and the vendor gets proof within a day.
Short answer: Check four things, in order: (1) was the challan deposited and matched to your return, (2) was the quarterly return filed and processed, (3) did you quote the vendor’s correct PAN, and (4) did you report it in the right quarter and section. The vendor cannot fix any of these. In most cases the fix is a correction statement from you.
This is the other side of the “my TDS is missing” problem: you are the deductor, and the vendor is waiting.
What is the vendor seeing, and what do I check?
| Vendor sees | Check in your records | Usual fix |
|---|---|---|
| No entry at all | Return filed? Processed? | File or wait for processing |
| No entry, return processed | Vendor’s PAN in the return | Correction statement with the right PAN |
| Lower amount than deducted | Amount reported vs amount deducted | Correction adding the missing amount |
| Entry in the next quarter | Date of deduction reported | Usually fine within the same year; explain to vendor |
| Entry marked unmatched | Challan details in the return (BSR, date, serial, amount) | Correct challan details in the return |
| Nothing, and challan under wrong section or year | Challan’s section and year fields | Challan correction, then correction statement |
Where do I see how my return was processed?
On TRACES, the department’s TDS portal, log in with your TAN and look at:
- Statement status, which shows whether each quarterly return was processed;
- Justification report, a file that lists every default the system found, such as unmatched challans, short deduction or late deduction, line by line.
Start with the justification report for the quarter the vendor named. It usually points straight at the problem line.
What do I send the vendor quickly?
Within a day, send:
- the challan details: BSR code, deposit date and challan serial number;
- the return acknowledgement (token) number;
- the quarter and the amount reported.
This tells the vendor the money is with the government and you are fixing the reporting. It also stops repeated follow-ups.
Worked example: ₹14,000 deposited under a wrong head
You paid a vendor ₹7,00,000 (before GST) in August for contract work and deducted 2% under Section 194C: ₹14,000. On 6 September your team paid the challan, but selected the wrong minor head (for example, the code for tax on regular assessment instead of TDS payable by taxpayer).
- The money reached the government on time.
- But the challan cannot be used against a TDS return.
- Your Q2 return (due 31 October) lists the vendor, but the challan does not match. The vendor sees nothing usable.
Fix in two steps: first get the challan corrected (through your bank or the assessing officer, depending on the field and how long ago it was paid), then file a correction statement linking it. Until then, the justification report may show a short payment, and interest under Section 201(1A) of the 1961 Act at 1.5% per month can be raised on the shortfall.
What to read next
- I paid the TDS challan but it is not linked to any return: what does unconsumed mean?
- TDS correction return: how to fix errors after filing
- How do I fix a TDS return after filing?
Catching these errors before vendors do is cheaper than fixing them later. TransactIG reconciles TDS and puts mismatches between deductions, challans and returns in an exception queue; see TDS reconciliation software.
Content authored by practitioners with experience at Amazon India, Intuit QuickBooks, and the Tata Group. Meet the team →