Income Tax Return: How to reconcile difference in Form16 & 26AS?

One of the common problems faced by the assessee while filing their Income Tax Return, whether, salaried employees or businessmen, is that TDS deducted on their income is not matching with the figures of TDS shown in form 26AS or TDS is not reflecting in form 26AS.

In the case of salaried employees, their taxes are deducted upfront every month by the employer in the form of Tax Deducted at Source (TDS). Further, the employer is under an obligation to deposit such tax deducted within the prescribed time to the government, file quarterly TDS return for such tax deducted and deposited and issue a certificate to the employee in form 16.

On the basis of such certificate in form 16, the employee can claim credit of taxes excess deposited while filing their respective Income Tax Return in India.

Further, the tax so deposited by an employer is normally reflected on the portal of tax department in the form of form 26AS.

In case of Tax return filing of individual employees, it must be ensured that the figures in form 16 is matching with the figures in form 26AS. Any mismatch in two figures will lead to issuance of notice from tax department.

Therefore, in order to avoid notices from tax department, it is essential to understand the reasons for mismatch in form 16 and form 26AS and how to rectify or reconcile such mismatch before filing ITR.

Reasons for the mismatch between form 16 and form 26AS 

Some of the reasons for mismatch between form 16 and form 26AS are as under:

  • Deductor of tax has not deposited the TDS so deducted.
  • Deductor has not filed TDS return although TDS has been deposited.
  • Clerical mistake in the TDS return like mentioning of wrong PAN of employee, wrong amount, wrong PAN and TAN of deductor, wrong challan identification number of TDS payment, wrong assessment year.
  • Wrong TDS amount claimed in the ITR filed.

Reconciling the figures of form 16 and form 26AS 

  • In case of mismatch in form 16 and form 26AS, first of all identify the reasons for such mismatch. If the mistake is on part of the employer, inform him about the mistake and ask him to rectify the mistake and file revised TDS return. On the basis of such correction, ITR filing shall be done.
  • In case a notice has been issued from the Income Tax Department for TDS credit mismatch, an online reply needs to be submitted after login to the portal. The assessee can choose the option of “Taxpayer is correcting data for Tax Credit Mismatch only” and fill in the relevant details.

In order to avoid legal hassles, it is advisable to do periodical checking of form 26AS to see whether TDS deducted by the employer is properly reflecting on the portal. In case it is not so reflected, an employer must be contacted immediately and reasons for such mismatch must be conveyed to employer so that he can make necessary corrections and file a revised TDS return. On the basis of reconciled figures only, an income tax return shall be filed.

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