Check Form 26AS, reconcile with Form 16 before you file your tax return

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

Before a taxpayer files his Income-Tax Return (ITR), he should scrutinise Form 26AS and then 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 the taxes deducted from your income and the tax credits available to you. Anant Singh Ubeja, senior associate, SKV Law Offices, says, “Form 26AS acts as a governmental record of Tax Deducted at Source (TDS) from an individual or company and deposited with the I-T Department.”

Form 26AS is an annual statement. Aditya Chopra, managing partner, Victoriam Legalis Advocates & Solicitors, says, “Form 26AS is useful for verifying and reconciling the taxes deducted by your employer and other deductors with the amounts submitted to the I-T Department.” It also incorporates information regarding tax refunds, high-value transactions, and pending tax demands.

What should you compare?

An employer, who deducts tax under Section 192 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 says, “Verify the TDS details. 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 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 prefill facility inputs data from Form 26AS into the ITR, but discrepancies can arise between prefilled values and actual computations. Ankit Rajgarhia, principal associate, Karanjawala & Company, Advocates, says, “If entries by the deductor are omitted, tax may not get credited. This could 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 errors in Form 26AS, you must get them rectified. Chopra says, “Failure to rectify discrepancies could invite a notice from the I-T Department.”

To address these errors, contact the deductor, typically your employer, and provide the necessary documentation and evidence. The deductor will then make the corrections and issue revised TDS certificates. Ubeja adds, “A rectification request can also be submitted on the I-T website.”

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

Points to keep in mind

Form 26AS allows taxpayers 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 accurately calculate their income and claim the appropriate tax credits while filing their ITRs.”

It is advisable to review your Form 26AS regularly. Rajgarhia says, “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 deductors 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 of investment. Rajgarhia says, “These documents will come in handy in case of any scrutiny or queries 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 or 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’

Source: Incometaxindia.gov.in