ITR filing: How to rectify mismatches between Form 16 and Form 26AS

If you fail to match all your actual financial transactions with Form 26AS and Form 16 before filing income tax returns, and discrepancies are subsequently noticed, you won't get credit for taxes actually deducted. This could end up increasing your tax outgo.

The last date to file your income tax returns (ITRs) is August 31 The last date to file your income tax returns (ITRs) is August 31

Most salaried people think that the Form 16 is all that is needed to file income tax returns. However, according to experts, it is important to ensure that there is no discrepancy in the information that the IT department has in its possession and what you are providing through ITR filing. To do that you have to check your Form 26AS as it lists all incomes and TDS (tax deducted at source) paid.

Form 26AS is an annual statement maintained under Rule 31AB of the Income-tax Rules disclosing the details of tax credit in his account as per the database of Income Tax Department. It is your consolidated annual tax statement, something like a tax passbook that records all the taxes deposited against your Permanent Account Number (PAN).

The tax credit will cover TDS, TCS (tax collected at source) as well as tax paid by the taxpayer in other forms like advance tax, self-assessment tax, etc. Under the Income Tax Act, tax TCS is levied at 1 per cent on purchase of motor vehicles above Rs 10 lakh, jewellery exceeding Rs 5 lakh and bullion over Rs 2 lakh. TCS is also levied on other purchases at different rates. The taxman will "generally allow a taxpayer to claim the credit of taxes as reflected in his Form 26AS," the government's income tax filing website states.

How to download Form 26AS?

According to Cleartax, Form 26AS can be downloaded either on the TRACES website - an undertaking of the Income Tax Department for easy filing of TDS/TCS correction statements by deductors - or through the net-banking facility of authorised banks. The password for opening the downloaded Form 26AS will be your date of birth in DDMMYYYY format.

Check for mismatches

"Make sure that the details mentioned in this form tally with your ITR not only in terms of TDS amount but also regarding income figures as discussed with the deductor," said Rajat Mohan, Partner at AMRG & Associates, a Delhi-based CA firm. It may happen that the actual amount of TDS and TDS credit as appearing in Form 26AS may differ or the TDS credit appearing in Form 26AS may be less as compared to the taxpayer's actual TDS.

Here are the most common reasons for data mismatches between TDS statement and Form 26AS:

  • Non-furnishing of TDS details to the Income Tax Department by the deductor or failure of the deductor to deposit TDS on time
  • Quoting incorrect PAN details in the TDS return
  • Providing incorrect challan details or making a mistake in the Challan identification number (CIN)
  • Wrongly entering the deductor's PAN/TAN
  • Choosing the incorrect assessment year
  • Omissions in the TDS return or entering incorrect amounts
  • Incomplete details of the assessee in the TDS return

How to rectify errors in Form 26AS?

If you notice any discrepancies in your form, approach your employer/deductor and point out the same. The deductor can then file a TDS/TCS correction statement. "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," Cleartax added.

It is important to do this because in case of any mismatch, there will not only be a delay in processing your income tax return, but may also push up your tax outgo if you not getting credit for taxes actually deducted. Alternatively, if you are paying less tax than you are supposed to, the taxman is sure to come calling. Computerised ITR processing has made it easier to identify matches in Form 26AS and TDS statements.

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