Income tax return (ITR) filing: Why checking Form 26AS is necessary

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A taxpayer should ensure that the income tax return or ITR is in sync with Form 26AS, say experts

July 31 is the last date for filing income tax return (ITR) for assessment year 2018-19 or financial year 2017-18. Form 26AS is an essential document salaried individuals should check before filing their ITR. “Form 26AS is important piece of document for filing of ITR. Taxpayer must ensure that the entries appearing in his Form 26AS must belong to him and any mismatch in data must be corrected before filing of ITR in order to avoid any kind of notice from the Income Tax Department,” says Rahul Singh, assistant manager at Taxmann.com.



What is Form 26AS?

Form 26AS is basically a consolidated tax credit statement that has all details of various taxes deducted on your income at source. You can access Form 26AS from the tax department’s website. Some banks also provide access to Form 26AS for their account holders.

“Form 26AS is the tax passbook which enlists the detail of taxes deposited on account of taxpayer during the financial year. These taxes can be in form of TDS (tax deducted at source), TCS (tax collected at source), advance-tax and self-assessment tax. A taxpayer can check from his Form 26AS whether the payer has actually deposited the TDS amount with the government,” says Rahul Singh of Taxmann.

Why checking Form 26AS is important before filing income tax returns (ITR)

A taxpayer should ensure that the income tax return or ITR is in sync with Form 26AS. In case of any discrepancy, the income tax department may issue tax notice to seek explanation for such discrepancies in the figures of income or TDS appearing in Form 26AS and income tax return.



“A taxpayer must ensure that the entries appearing in his Form 26AS must belong to him and any mismatch in data must be corrected before filing of ITR in order to avoid any kind of notice from the Income Tax Separtment,” says Rahul Singh of Taxmann.

Besides that “there are a few transactions which are required to be reported by the banks or financial institutions to the Income Tax Department. For example, deposit of cash in bank account, buying a house property, etc. These financial transactions are reported in ‘Statement of Financial Transaction’ (‘SFT’) only when they cross the threshold limit. These transactions also appear in Form 26AS under AIR (annual information return) column,” he adds.



What happens if there is a mismatch

If there is a mismatch in the amount of TDS claimed in income tax return and the amount of TDS appearing in Form 26AS, the assessing officer will provide credit only for that amount which appears in Form 26AS. “In this case, the taxpayer shall be issued a demand notice requiring him to deposit the tax equivalent to mismatch in the amount of TDS. However, if tax is refundable to him/her, it shall be reduced by the amount of TDS wrongly claimed in the ITR,” says Rahul Singh of Taxmann.



There can be many reasons for shortfall in TDS reflected in Form 26AS. “Tax deductor might have failed to submit the amount of TDS with the government or after submitting TDS, he failed to submit TDS return, or wrong PAN was quoted by the deductor in TDS return. Thus, in such situation, a taxpayer should contact the tax deductor to rectify the discrepancies found in Form 26AS,” he adds.

In cases, where excess TDS is reflected in Form 26AS, it might be due to wrong details submitted by tax deductor. “It is advisable not to claim the credit of such excess TDS amount as it can be rectified by the tax deductor at any time by filing revised TDS return. If a taxpayer has been given credit of such excess TDS amount, which is later on reversed, the income tax department may issue a demand notice to recover the TDS which was wrongly allowed to the taxpayer,” says Rahul Singh of Taxmann.



How to download Form 26AS

Form 26As can be downloaded by logging into your e-filing account on the income tax department’s tax filing website. Thereafter, go to ‘My Account’ tab and select Form 26AS from the drop-down menu. The taxpayer will then be directed to TDS Reconciliation Analysis and Correction Enabling System (TRACES) website. Then the person needs to select the assessment year and format in which he/she would like to view Form 26AS.

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