Income tax return (ITR) filing: Why you must claim correct amount

Income tax return (ITR) filing: Most salaried taxpayers already have their taxes discharged by way of TDS (tax deducted at source) made by their employers. So, they do not really have any tax to pay at the time of filing of returns. However, it is important that you claim the right amount as credit for taxes deducted at source in the return of income. And what you claim must match with your Form 26AS. Let us understand why TDS claimed should match with Form 26AS, and what needs to be done if TDS does not reflect in Form 26AS at all.

Payment of taxes

Taxpayers pay their tax dues by way of:
TDS - Tax deducted at source by the person making payment to the taxpayer, for example, salary, rent, commission, interest, etc

Advance tax - In case where your tax dues after reducing TDS exceeds Rs 10,000, you have to pay advance taxes

Self-assessment tax - These are taxes you pay if you have tax dues at the time of filing return

How is Form 26AS organised and updated

This statement is available for download from your account on the income tax return filing portal. It is a reflection of all incomes that you have received during the year on which taxes have been deducted. It contains details of income and the TDS made thereon. Further, the advance tax and self-assessment tax details also get reflected here. Every taxpayer relies on this document while filing return of income for considering income to be offered and for claiming credit of tax deducted.

Every entity that has deducted taxes at source is supposed to deposit such taxes to the credit of the government. This deposit is done through banks. Banks are assigned the responsibility of uploading such TDS details into the Tax Information Network (TIN) central system. Deductors, parallely, are bound to file quarterly statements to TIN providing details of TDS made during every quarter. Basis these details, the TIN central system matches information related to tax payment. Those details that match are converted into a comprehensive ledger for the concerned PAN, which is Form 26AS.

How to address discrepancies

Form 16 and Form 16A are generated by deductors and provided to the taxpayer, after the end of a financial year or after every quarter.

These are generated through TRACES ( TDS Reconciliation, Analysis and Correction Enabling System) on the basis of the quarterly returns filed by deductors. Therefore, there is every chance that information contained in Form 16/Form 16A may not match with entries or even get reflected  in Form 26AS, as both are generated on the basis of different set of data. Form 26AS being the document that the income tax department would rely on, it is essential that you reconcile Form 16/Form 16A with Form 26AS and get discrepancies resolved before commencing your return filing process.

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Scenarios of missing TDS entries in Form 26AS arise mostly on account of a failure or default on the part of the deductor in filing TDS returns appropriately. Therefore, it is advisable that every taxpayer matches entries in Form 16/16A with entries in Form 26AS before filing returns. If you come across any differences, 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. If the deductor fails to revise returns, approach the jurisdictional assessing officer.

By Archit Gupta

(The writer is founder and CEO, ClearTax)