Addressing Discrepancies between Form 16, Form 26AS, and AIS TAXCONCEPT

The due date for filing Tax Deducted at Source (TDS) return for the period of January to March is May 31. Since it takes one to two weeks for Form 26AS to get updated, a good time to file the Income Tax Return (ITR) is after June 15. However, suppose your Form 26AS is not updated even after June 15, you should check with your employer as declaring income less than Form 26AS or Annual Income Statement (AIS) and claiming higher credit of TDS increases the chances of an income tax notice.     

Part A of Form 16, which contains the details of tax deducted and deposited, is generated online based on the TDS return filed. This digital reconciliation ensures no difference between Form 16 and Form 26AS. “However, if there is a mismatch, it may be because the employer has prepared Form 16 offline or after issuing the Form 16 has revised the salary TDS return and not issued an updated /revised Form 16. The taxpayer must check their bank statements and payslips to ensure that TDS reflected in Form 16 and Form 26AS reconciles with the actual tax deducted by the employer,” says Neeraj Agarwala, Partner, Nangia Andersen India.

AIS, an extension of Form 26AS, provides comprehensive information beyond what is displayed in Form 26AS. While Form 26AS showcases details regarding property purchases, high-value investments, and TDS/TCS transactions conducted throughout the financial year, AIS goes a step further by including additional information such as savings account interest, dividends, rent received, securities/immovable property purchase and sale transactions, foreign remittances, interest on deposits, GST turnover, and more.

“The timing of TDS deductions and deposits may differ between the deductor and the tax department. The deductor may have deducted the TDS amount in one financial year, but it may have been deposited with the tax department in the subsequent year. This can lead to a mismatch between Form 16 and 26AS,” says Atul Sharma, Founder, Lex N Tax

There could, however, be several other reasons for the mismatch in TDS amount in Form 16 and 26AS. Atul Sharma, Founder of Lex N Tax, explains these: 

Errors in Filing: Mistakes or discrepancies in filing TDS details by the deductor can also result in a mismatch. It’s possible that the deductor has made errors while uploading the TDS information to the tax department, such as entering incorrect TAN (Tax Deduction and Collection Account Number) or PAN (Permanent Account Number).

Non-Reporting or Delayed Reporting: The deductor may have failed to report the TDS deductions to the tax department or there could be a delay in reporting. Consequently, the TDS amount may not be reflected in your Form 26AS, leading to a mismatch.

Multiple Deductors: If you have income from multiple sources or have changed jobs during the financial year, you may have multiple deductors deducting TDS on your behalf. In such cases, it’s essential to ensure that all deductors have correctly reported the TDS deducted against your PAN. If any deductor has failed to report or has made errors, it can cause a mismatch in Form 16 and 26AS.

Rectification Requests: If you have filed rectification requests or corrections for TDS-related issues with the tax department, it may take some time for the changes to reflect in your Form 26AS. During this period, there can be a temporary mismatch between the two documents.

What to do if TDS and other details are not matching in forms 16, 26As and AIS?  

According to Atul Sharma, if you find discrepancies between the TDS and other details in Form 16, Form 26AS, and the AIS, it is important to take the following steps:

Cross-Verify the Information: Carefully compare the TDS details, such as the deducted amount, the deductor’s name, TAN, and PAN, in all three documents. Look for any variations or inconsistencies that may be causing the mismatch.

Contact the Deductor: Reach out to the deductor, typically your employer or the organisation responsible for deducting TDS, to inform them about the discrepancies. Provide them with the relevant details and request them to rectify any errors or omissions on their part.

Request Revised Form 16: If the mismatch is due to errors in Form 16, ask the deductor to issue a revised Form 16 with the correct TDS details. Ensure that the revised form is duly signed and stamped by the deductor.

Coordinate with the Tax Department: Contact the income tax department and inform them about the discrepancies in Form 26AS and AIS. They may provide guidance on the necessary steps to rectify the issue and ensure accurate reporting of TDS. They may also request additional documentation or evidence to support your claim.

File a Grievance: If the deductor or the tax department does not respond or take appropriate action to rectify the discrepancies, consider filing a grievance with the income tax department. This can be done through the e-filing portal or by submitting a written complaint. Provide all the relevant details and supporting documents to strengthen your case.

Keep Records: Maintain a record of all communication, including emails, letters, or any other evidence of correspondence with the deductor and the tax department. These records will be useful if you need to escalate the matter or provide evidence of your efforts to rectify the discrepancies.

Remember, it is crucial to address the mismatch promptly to ensure accurate reporting of your TDS and avoid any potential issues during income tax assessments or refunds. However, the digital portal used by the income tax department ensures that there are no mismatches between Form 16 and Form 26AS. In the past there have been issues of mismatch and the income tax department has worked towards ensuring that this does not happen. “Accordingly, Form 16 is now required to be downloaded online and since this certificate is generated by using the details filed in the TDS return, the chances of there being a mismatch are extremely rare,” says Agarwala.

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