TDS Mismatch ITR Form 26AS

If there is TDS mismatch in ITR Form 26AS, there can be negative outcomes such as delayed refund, tax notice, penalty or extra tax

Taxation continues to be a matter of anxiety for many people. Despite millions being spent on improving the taxation software systems, bugs and issues remain. One of the common problems taxpayers face every year is the TDS mismatch in ITR Form 26AS. Let’s find out why this problem occurs and how you can rectify it.

What is TDS Mismatch ITR Form 26AS?

The TDS mismatch in ITR Form 26AS relates to the TDS claimed by you and the figures mentioned in the official tax credit records shown in Form 26AS. The latter is essentially your consolidated tax credit statement. After you file your tax return, the Income Tax department will match your claimed TDS amount with the figure displayed in Form 26AS. If there is a discrepancy, your refund could be reduced or delayed.

You could also receive a notice, asking you about details of the TDS claimed by you. The Form 26AS shows various details such as TDS/TCS credited (by deductors like employers, banks, companies) and advance tax/self-assessment tax paid. Form 26AS also lists various other details such as refunds and high-value transactions (via AIS integration). While you can claim any amount as TDS, the Income Tax department will only consider the amount shown in Form 26AS.

Common reasons why TDS mismatch occurs

This is why it becomes necessary to clear the TDS mismatch in Form 26AS. From the deductor side, the TDS mismatch in Form 26AS can occur due to factors like incorrect PAN, wrong TDS amount, delayed filing of TDS returns, error in challan deposit or CIN (Challan Identification Number) and failure to file correction/revised TDS return.

From the taxpayer side, a TDS mismatch can occur due to false TDS claims, error in filing the income tax return and timing differences (TDS appears in 26AS after you file ITR). There can be other reasons as well such as mismatch between Form 16/16A and 26AS, double entries or omissions in deductor’s filing and issues related to crypto/exchange TDS, rent, freelance payments, etc.

What happens if there is TDS mismatch in Form 26AS?

You may not face legal action, but there can be unnecessary stress if there is TDS mismatch in Form 26AS. For example, you may be required to pay extra tax or your refund could be reduced or delayed. The Income Tax officer could send you a defective return notice. Your return could be put to extra scrutiny or you may receive penalty notices (under Section 270A in extreme cases of mismatch treated as under-reporting). You may not be able to use the pre-fill facility in future filings.

How to know there is TDS mismatch in Form 26AS?

You just have to access your income tax filing account and view the Form 26AS. You can then compare it with the Form 16/16A. You can also use the ‘Tax Credit Mismatch’ service available on the income tax website. This compares your filed ITR with 26AS.

How to resolve TDS mismatch in Form 26AS?

It is always better to resolve TDS mismatch in Form 26AS before you file your return. This significantly reduces the complications that can occur in the future. If there is an issue from the deductor side, you need to contact them and ask them to fix the issue. In many cases, the Form 26AS can take a bit longer to show the updated TDS amount. As such, it is recommended that you wait a few weeks till the Form 26AS shows the correct TDS numbers you are expecting.

If you have already filed your income tax return, the mismatch can be corrected by contacting the deductor. If you have received a notice, respond promptly with clarification and supporting documents. In case the error is from your own side, you can file a rectification request.