Home › Ask a CA › Defaults, interest & notices

I received a short-deduction default on TRACES — what should I do?

Category
Defaults, interest & notices
Answered by
A CA firm
Bottom line
Download the justification report, find the cause (usually a PAN error or wrong rate), deposit any shortfall with interest, and file a correction statement; then reply to the intimation.

A short-deduction default usually arises from an incorrect or inoperative PAN (triggering 20%), a wrong rate, or a missed threshold. Start by downloading the justification report from TRACES to see the exact rows flagged.

Fix the cause: correct the PAN through a correction statement, or deposit the differential tax with 201(1A) interest and tag the challan. Then respond to the intimation with the supporting evidence. A ready notice-reply letter pack speeds this up.

General information for FY 2026-27 under the Income-tax Act 2025, not advice on your specific case. Verify against the latest law or ask a CA before acting.