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A junior accountant uploaded a TDS return and sees a status they do not understand, and is unsure whether anything needs doing.
A return is first received and checked for format, then processed by the Centralised Processing Cell, which matches challans and deductions and either clears it or raises defaults through a Section 200A intimation.
Token number and acknowledgement of each upload, TRACES deductor login, challan register and deduction register for the quarter.
A clear next step for each status: wait, download the justification report, pay a demand or file a correction.
After you upload a TDS return, it is first accepted and then processed, either without defaults or with defaults. Accepted only means the file was received in the right format. Processed with defaults means the department matched your challans and deductions and found a gap, such as a short payment or a late fee, that needs your attention.
TRACES is the TDS portal run by the Centralised Processing Cell (CPC-TDS). That is where you see the processing result. Status labels can vary a little between the e-filing portal and TRACES, so read the wording on screen carefully.
What does each status mean, and what do I do?
| Status (typical wording) | What it means | What to do |
|---|---|---|
| Accepted | File received and passed format checks | Keep the token number; wait for processing |
| Rejected | File failed checks at upload | Fix the error shown and upload again |
| Processed without defaults | Challans and deductions match | Nothing; vendor credit will appear |
| Processed with defaults | A gap was found | Download the justification report and fix the cause |
A default is not always a real shortfall. It can be a challan that was not linked properly, or a PAN typo. That is why the next step is to read the justification report, not to pay at once.
Where do I find the token number, and why keep it?
When you upload, you get an acknowledgement with a token number. Store it with the quarter’s working papers. You need the token number of the original return to file a correction statement later. Losing it means extra steps on TRACES before you can correct anything.
How long does processing take, and when do vendors see credit?
Processing typically takes a few days to a few weeks. Around due dates (31 July, 31 October, 31 January and 31 May) it can take longer. If defaults are found, CPC-TDS issues an intimation under Section 200A and the amount shows as a demand on TRACES.
Your vendors see the credit in their TDS credit statement (Form 26AS, or Form 168 from tax year 2026-27) once the return is processed. If a vendor says the credit is missing, first check the status of your return.
Unpaid demands carry consequences. Late fee runs at ₹200 per day under Section 234E, and interest for late deposit runs at 1.5 percent per month under Section 201(1A).
A worked example: a Q1 return uploaded on 30 July
You upload your April to June return on 30 July. It reports ₹1,86,000 of TDS across 42 deductee rows and 3 challans.
- 30 July: status shows accepted. You save the token number.
- Around mid-August: status changes to processed with defaults. The demand is ₹1,500.
- You download the justification report. It shows ₹1,500 of interest at 1.5 percent on one ₹1,00,000 deduction (₹1,00,000 times 1.5 percent equals ₹1,500) deposited one month late.
- You pay ₹1,500 against the demand. The other ₹86,000 of TDS was correct.
- Vendors see their ₹1,86,000 of credit; the demand clears after payment is linked.
Because the return was filed by 31 July, no Section 234E fee applied.
What to read next
- What is a TDS justification report and how do you read it?
- TRACES portal reconciliation
- How do I fix a TDS return after filing?
- TDS reconciliation software: TransactIG reconciles TDS in your books against challans and credit statements and flags gaps before the processing result does.