By now most salaried individuals would have received their Form 16 from their employer.
Although Form 16 will have details of tax deducted at source (TDS) by the employer, it is essential that they check their Form 26AS, i.e., the statement showing TDS details from various other deductors. It is important to check the Form 26AS for any errors. Here is how to get the errors rectified for the income tax return process to be smooth.
What is a TDS certificate?
Every entity that deducts TDS issues a certificate to the deductee with details including the amount deducted. The figures in the TDS certificates should match with those shown in your Form 26AS. If they don’t, the mismatch may give rise to enquiries from the income tax department. Hence, it is imminent that one checks Form 26AS to reconcile figures with the TDS certificates.
Errors in Form 26AS
Checking the Form 26AS before filing ITR helps as it might contain some errors. “This could be due to various reasons such as, non-filing of TDS return by the deductor or non-payment of TDS by the deductor, quoting wrong assessment year or wrong PAN, providing incorrect challan details in the TDS returns submitted by the deductee, not depositing TDS to the Income Tax Department, deducting TDS but not depositing it in favor of the co-owner in case of joint ownership, etc.”, informs Neha Malhotra, Executive Director, Nangia Advisors LLP. Such errors could lead to under or over reporting of income or taxes in Form 26AS, which in turn could lead to an inquiry being raised by the IT department.
Also, there could be several other reasons. According to Archit Gupta, Founder & CEO ClearTax, “Advance tax and self-assessment tax not reflecting in Form 26AS at all and possibility of reflection of credits of TDS made in respect of some other PAN appearing in your Form 26AS,” could be some of those errors.
Here’s how to rectify the error if the PAN has been wrongly quoted. “This error could come up if either the PAN has been wrongly quoted in the tax payment challan or the bank has made an error in entering the PAN while digitising the challan data or the bank has not uploaded the digitized information to TIN (Tax Information Network). To address this, one can use the challan status enquiry facility provided at TIN website to verify whether the challan bearing Challan Identification Number (CIN) given in the counterfoil available with you has been uploaded to TIN. In case you observe that the PAN available in the uploaded data is not your PAN, you may approach your Assessing Officer in this regard,” informs Gupta.
Mismatch between Form 26AS and TDS certificates
At times, the figures shown in the TDS certificates may not match with one’s Form 26AS. If you are a salaried individual, check the TDS certificate that your employer would have provided to you as Form 16. “There are several reasons for mismatch between Form 26AS and the TDS certificates (Form 16/ 16A), some of them are non-filing of TDS Return by the person deducting TDS as a result of which TDS does not properly reflect in Form 26AS, quoting of wrong TAN of deductor or wrong PAN of the deductee, non-provision of challan details, furnishing incorrect amount of TDS, etc.,” says Malhotra.
How to get the errors rectified
An incorrect entry especially with regards to PAN or an amount may lead to unnecessary delays in filing the ITR. One needs to get them rectified before filing to avoid future hassles. “Practically, the remedy for rectifying the mismatch lies in requesting the deductor to reconcile the same. You will have to request the deductor to revise the TDS return. The deductee has no power under the Act, to enforce the deductor to the revision of the returns so wrongly filed,” says Malhotra. In case there is a discrepancy in the TDS certificate issued by your bank where you have a fixed deposit, ask the banker to rectify it. “TDS certificates should be accurate as they may be required to be shown as proof of TDS claimed, in case your return gets picked up for scrutiny,” says Malhotra.
Authenticity of Form 26AS
If a banker or any other tax deductor is issuing you the Form 26AS, check its authenticity. Such a document in a plain paper or the letter head of the bank may not hold water. Malhotra informs, “As directed by the Circulars of Central Board of Direct Taxes, it is mandatory for all deductors including a banking company to issue TDS certificates after generating and downloading the same from TRACES Portal. Certificates issued in any other form or form or manner will not comply to the requirements referred in the Income-tax Act 1961 read with relevant Rules and Circulars issued in this behalf and will thus be invalid. Only the TDS certificates (Form 16/16A) downloaded from TRACES are valid. These certificates, downloaded from TRACES, are in a specific format.”
Filing with revised form 26AS
Finally, once the revised TDS gets uploaded and the revised figures are reflected in Form 26AS, only then can you file the return. You may have to wait a little longer for this. “Note that it does take some time for the person who has deducted your TDS to file revised TDS return. Even after uploading the Revised TDS Return, Form 26AS too does not instantly get updated,” says Malhotra.
What you should do
Make sure you compare the figures in Form 26AS with that of Form 16 and Form 16A before you finish the tax filing exercise. “TDS certificates in Form 16 and Form 16A are equally crucial and it is essential to compare the entries in Form 26AS with those in your TDS certificates to make sure you are claiming the right credits and also offering all your income appearing in Form 26AS to tax,” says Gupta.