Reconcile Form 26AS with 16 before filing tax return

Claiming excess tax credit in your return could trigger a notice from the taxman

Before a taxpayer files her income-tax return (ITR), she should scrutinise Form 26AS and compare it with Form 16. Any discrepancy between the two can invite a notice from the income-tax (I-T) department. Hence, rectifying mismatches is crucial.

What is Form 26AS?

Form 26AS serves as a consolidated tax statement that offers an overview of taxes deducted from your income and tax credits available to you. “Form 26AS acts as government records of tax deducted at source (TDS) from an individuals or company and deposits with the I-T Department.”

Form 26AS is an annual statement. “Form 26AS is useful for verify and reconciling the taxes deducted by your employer and other dedicators with the amounts submitted to the I-T Department. “It also incorporates information regarding tax refunds, high-value transactions, and pending tax demands.

What you should compare

An employer, who deducts tax under Section 192 of the I-T Act from an employee’s salary, must issue a TDS certificate in Form 16. This certificate can be downloaded from TRACES (TDS Reconciliation Analysis and Correction Enabling System). It is a detailed record of the tax deducted based on the TDs statement furnished by the employer.

A revised format of Form 26AS was introduced in June 2020 to present data to taxpayers in a structured manner. Chopra advises to verify the TDS details carefully. “Ensure that the TDs reflected in Form 26AS matches with the TDS in Form 16. Confirm that the taxes deducted by your employer have been correctly deposited into the government’s account,”

Taxpayers should also ensure that the income declared in Form 26AS matches with the income reported in Form 16. Check for differences in salary, perquisites, deductions or allowances.

Ubeja adds that it’s common to find inconsistencies in the TDS amount for a variety of reasons, one of them being clerical errors. The automatic prefillfacility inputs data from Form 26AS into the ITR but discrepancies can arise between prefilled values and actual computations. “ If entries by the deductor are omitted, tax may not get credited. This can create a tax payable situation.” Discrepancies or mismatches can delay the processing of ITR and issuance of tax refunds.

How to rectify errors

If you identify in Form 26AS. You must get them rectifies. Chopra says, “Failure to rectify discrepancies could invite a notice from the I-T Department.”

To address these errors contact the dedicators will then make the corrections and issue revised TDS certificate. Ubeja adds, “A rectification request can also be submitted through the I-T website.”

Sometimes, the I-T Department sends a notice to the taxpayer if it finds discrepancies in Form 26AS. “The I-T Department offers a convenient online portal where you can provide the reason for the discrepancy in response to the department’s notice. This allows for quick resolution of the issue, ensuring your tax records are accurate and compliant.”

Points to keep in mind

Form 26AS allows taxpayer to view all financial transactions involving TDS or TCS (tax collected at source) for the relevant financial year. Chopra says, “With Form 26AS, taxpayers can calculate their income accurately and claim the appropriate tax credits while filing the ITRs.”

IT is advisable to review your Form 26AS regularly, “Don’t wait until the last minute. Instead cultivate the habit of monitoring your Form 26AS throughout the year. This will enable you to stay updated on the TDS deductions made by various dedicators made by various dedicators and verify if they have been correctly deposited with the I-T department.” Finally, maintain all documents related to your income, investments and deductions, including receipts, invoices and proofs and investment. ”These documents will come in handy in case of any scrutiny or query from the I-T Department. “If your documents are well organised, tax filing becomes simpler and accurate. 

HOW TO ACCESS FORM 26AS

Perform the following steps to view download form 26AS from the e-filing portal:

 Log on to ‘e-filing’ portal: https://www.incometax.gov.in/iec/foportal/

Go to the ‘My Account’ menu, click ‘view Form 26AS (Tax Credit)’ link

Read the disclaimer, click ‘confirm’ and you will be redirected to the TDS-CPC portal.

Here, first give your consent and then click on ‘Proceed’

Click ‘view Tax Credit (Form 26AS)’

Select the Assessment Year’ and ‘View type’ (HTML, Text or PDF)

Click ‘view Download’

For More Details: Pooja Manoj Gupta, visit www.giia26.com
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