Resolving mismatches between TDS statement and Form 26AS

Tax Deducted at Source (TDS) deduction amount should be the same in Form 26AS and Form 16/16A. However, there might be inconsistencies in the TDS amount for various reasons, including clerical mistakes. Form 16 and 16A are tax credit statements confirming tax deductions from the income of an individual or company. Form 16 is issued annually on TDS from salary, and Form 16A is issued every three months for TDS on income from other sources. Form 26AS is a government record of the TDS deducted from an individual or company and deposited with the Income Tax (IT) Department.

What is a TDS statement?

Everybody who makes tax deductible payments must file quarterly TDS returns as applicable. This statement contains information about people who have received payment after tax deduction, or in other words, deductees. It also contains the nature of payment made to him and the tax deducted from his payment.

These are called TDS statements. Based on such statements filed, the deductors generate Form 16 (TDS on salary) and Form 16A (TDS on other income) annually and quarterly respectively.

What is Form 26AS?

Generally, every entity (individual or company) that has deducted taxes must credit that amount to the government via banks. Banks must upload these TDS details into the Tax Information Network (TIN) central system. The deductors, parallely, would file quarterly statements to TIN, providing quarterly TDS details.

Based on these details, the TIN central system matches information related to tax payment before converting into a comprehensive ledger for the concerned PAN. This is Form 26AS. Basically, Form 26AS statement provides a consolidated view of the total income earned by you as a deductee from various sources.

It also includes the TDS/ TCS amount that has been deducted from your income and credited to Income Tax Department. Apart from tax deductions, you may also pay taxes by way of Advance Tax and Self Assessment Tax. All such tax related information appears in Form 26AS.

Importance of rectifying mismatches

The Income Tax department provides a pre-fill service where all data is automatically captured using PAN matching. When Form 26AS is not up to date, taxpayers cannot use the pre-fill facility. Additionally, if there is a mismatch, the IT return will be rejected, and taxpayers will have to respond to the IT notification online and explain the reasons. It may also cause delays in processing returns, thus, delaying tax refunds. The tax return is a vital document. Thus, rectifying mismatches early will help taxpayers file ITR without any hassles.

Reasons for mismatches between TDS statement and Form 26AS

There are various occasions where the TDS information in the TDS statement and consequently in Form 16 or 16A may differ from what is available in Form 26AS.  Most common reasons for such mismatch(es) are listed below:

• Failure of the deductor to deposit TDS on time
• Incorrect amount entered in the TDS return
• Incorrect PAN quoted in the TDS return
• Mistake in the CIN (Challan identification number)
• The deductor’s PAN/TAN wrongly entered
• Mistake in the chosen Assessment year
• Omissions in the TDS return
• Incomplete details of the assessee in the TDS return
• Mismatch in the TDS quoted and the actual TDS deducted

Rectifying mismatches

• More often than not, such mismatches can be attributed to wrong information provided in the TDS return. So, please approach your employer/deductor to file a revised TDS return after making the necessary corrections.
• The Income Tax department allows the assessee to mention the reason for mismatch in the online portal in answer to a Notice sent by the department.

Consequences of mismatch

Computerized ITR processing income tax returns has made it easier to identify matches in Form 26AS and TDS statements. The income tax portal contains links that would provide access to 26AS, allowing the assessee to verify and cross check the details. Hence, please ensure that TDS details in TDS statements and Form 26AS match to avoid the following consequences:

• With the prefill facility made available in the website and utilities, all the data available in the 26AS is automatically filled in the ITR. In the event of mismatches, the value prefilled will mismatch with our actual computations.
• Omission of entries by the deductor will result in you not getting credit for taxes actually  deducted and this could result in a tax payable situation.
• There will be delay in processing your Income tax return.
• Receipt of refund of excess tax deducted will be delayed.

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