TDS Default Notice explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
A TDS default notice is issued when there are shortfalls, late deductions or mismatches in your TDS returns. Here is how to handle it.
Common TDS defaults
- Short deduction or short payment of TDS
- Late deduction or late deposit (interest applies)
- Late filing of the TDS return (₹200/day under Section 234E)
- PAN errors causing mismatches in Form 26AS
How to handle it
- Log in to TRACES and review the default/justification report
- Pay the shortfall, interest and late fee via challan
- File a correction statement to fix errors (PAN, challan, amounts)
- Reconcile and confirm the default is cleared
Tip
Deduct at the right rate, deposit by the 7th, and file returns on time to avoid these defaults.
Frequently Asked Questions
Why did I get a TDS default notice?
Due to short/late deduction, late deposit, late return filing or PAN mismatches.
How do I resolve a TDS default?
Review it on TRACES, pay the shortfall, interest and fee, and file a correction statement.
What is the late fee for TDS returns?
200 rupees per day under Section 234E until filed.
Where do I check TDS defaults?
On the TRACES portal (justification report).
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