Are you filing Income Tax Return (ITR)? This is where you are trapped! Know what is Form 16 , Form 16A, Form 26AS, TDS statement

Filing your income tax return (ITR) can turn into a nightmare if the  new guidelines are not followed properly. However, here is how you can make it easy. ITR contains details of income as well as those from other sources - rent, home, bonus, savings account and many more. Every individual must carefully feed in the data in order to make a successful filing. A return of income is incomplete without filling in details of income tax payments made during the year. There are certain specific documents that one could rely on for filling up these details. 

These are Form 16 , Form 16A and Form 26AS. While all these documents contain details of taxes paid during the year either by way of TDS or by way of advance or self assessment, it is important to make sure that such details contained in Form 16/Form 16A match with the information contained in Form 26AS. 

There are various reasons that make taxpayers rush at the last moment to file their returns. Some try to get cracking and follow proper procedures for filing ITR on time either online or taking the help of Chartered Accountants (CAs). However, some simply get frustrated by the fact that it requires them to recall and keep track of what they spent their money on or saved. 

So, to cut through the confusion, let us read on to further understand why it is essential to carry out a comparison exercise between these documents, the consequences of discrepancies if any and how these can be corrected, as per Archit Gupta, Founder & CEO ClearTax.

 A brief understanding of Form 26AS

This is a statement that a taxpayer can download by logging into the online tax filing portal. It is a consolidated statement comprising details of all taxes deducted on various incomes of a taxpayer during a given financial year. It also has details of advance taxes and self assessment taxes if any, paid during the year. 
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, in parallel, 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 list for the concerned PAN. This list is Form 26AS. 

 A brief on TDS statements

Every deductor of income tax is supposed to file quarterly TDS returns which are statements comprising details of the deductees like name, PAN etc, nature of payment made, amount paid and the tax deducted thereon. These are called TDS statements. The deductors, on the basis of these statements filed, generate Form 16(for salary) and Form 16A (payments other than salary) annually and quarterly respectively. These are called TDS certificates and are to be furnished to the deductees to help them claim credit for TDS done, while filing their returns of income

Discrepancies between Form 16 / Form 16A and Form 26AS 

Taxpayers, while filing their returns, rely on documents like Form 16, Form 16A , Form 26AS for filling in the taxes paid schedule in the return. While doing so, they must carry out an exercise of comparing the TDS details contained in Form 16/16A with their Form 26AS to ensure that they match. Mismatches between the two statements could occur on account of various reasons of which certain significant one are:

• 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

Resolving mismatches

One may observe that in most of the occasions, the mismatch is attributable to a failure or default on the part of the deductor in filing TDS returns appropriately.

Therefore, in order to resolve the discrepancies, a taxpayer can approach the deductor who may carry out necessary corrections by filing a revised TDS return in order that all details of taxes deducted during the year get correctly reflected in the taxpayer’s Form 26AS.

In the event the deductor fails to revise returns despite several follow ups by the taxpayer, as a last resort, he can approach his jurisdictional assessing officer to have this resolved.

Need for resolving mismatches

If the aforementioned discrepancies remain unresolved, there are chances that you would not get credit for taxes that have actually been deducted. Consequently, you would either be required to pay additional taxes or the refund claimed by you in your return would come down.