How to Handle Salary Mismatch Between Form 16 and ITR
- Dipali Waghmode
- Nov 4
- 9 min read
When filing an Income Tax Return (ITR), ensuring that the salary declared matches the figures in Form 16, the Annual Information Statement (AIS), and Form 26AS is essential for smooth processing. Any mismatch can trigger refund delays, error notices, or scrutiny by the Income Tax Department. Salary mismatches often occur due to incorrect TDS reporting, multiple employers, or missing income entries. Understanding how to identify and resolve such discrepancies can help taxpayers maintain compliance and avoid complications during ITR processing.
Table of Contents
Understanding Form 16, AIS, and Form 26AS
Form 16, AIS, and Form 26AS are the three key documents that determine the accuracy of your income tax return. Form 16 is issued by your employer and reflects details such as gross salary, exemptions, deductions under Chapter VI-A, and the total tax deducted at source (TDS) on your income. It is essentially a certificate that confirms how much tax has been deducted and deposited with the government on your behalf.
The Annual Information Statement (AIS) is maintained by the Income Tax Department and provides a complete record of all income sources linked to your PAN—salary, interest from savings accounts, dividends, securities transactions, and other high-value financial activities. It is broader than Form 16 because it captures multiple income streams beyond employment.
Form 26AS is a consolidated statement that contains all TDS, TCS (Tax Collected at Source), advance tax, and self-assessment tax details. It serves as an official record of the taxes deposited against your PAN. Together, these documents must align to ensure a smooth and error-free ITR filing. Any difference between them can lead to mismatches, refund delays, or scrutiny from the Income Tax Department.
Common Reasons for Salary Mismatch Between Form 16 and ITR
Salary mismatches between Form 16 and ITR are common and can arise due to multiple reasons. One frequent cause is delayed or incorrect TDS reporting by employers. When employers fail to submit their TDS returns accurately or on time, the figures reflected in Form 16 may not match what appears in Form 26AS or AIS.
Employees who switch jobs during the financial year also face discrepancies, as one employer might not include income from the previous job while filing TDS returns. Another reason could be inaccurate salary entries, such as unreported bonuses, arrears, or allowances.
Additional income, like interest from savings accounts, freelance payments, or rent, can also appear in AIS but may not be reflected in Form 16, creating a difference in total income. Lastly, technical errors such as mismatched PAN details, clerical mistakes, or delays in AIS updates can result in salary mismatches that require attention before filing the return.
Step-by-Step Process to Fix Salary Mismatch
Resolving a salary mismatch between Form 16 and ITR requires a methodical approach. Follow these steps to ensure that all discrepancies are identified and corrected before submission.
Verify Form 16 and Salary Slips Start by cross-checking the salary components in Form 16 with your payslips and bank credits. Ensure that basic pay, HRA, special allowances, and deductions such as professional tax or PF contributions are correctly reflected. Verify that both Part A (TDS summary) and Part B (salary details) of Form 16 align with your actual earnings and deductions for the financial year.
Cross-Check AIS and Form 26AS Data Log in to the Income Tax e-filing portal and access your Annual Information Statement (AIS) and Form 26AS. Compare the salary and TDS details with those in Form 16. Pay close attention to additional income sources such as interest, dividends, or rent, which may appear in AIS but not in your salary records. These additional entries need to be incorporated in your ITR.
Contact Employer or Deductor for Corrections If a discrepancy arises from the employer’s side, reach out immediately to request a correction. Employers can revise their TDS returns under Section 200(3) of the Income Tax Act, 1961. Once the revised TDS return is processed, the corrected details will appear in your Form 26AS.
File a Revised ITR Under Section 139(5)
If the employer does not correct the issue in time, you can still file or revise your ITR with the accurate income details. A revised return under Section 139(5) allows you to rectify errors or omissions before the end of the assessment year. Ensure that you only claim the TDS that appears in Form 26AS to prevent future discrepancies or notices.
Example: Salary Mismatch Due to Job Change or Bonus
Consider a situation where a taxpayer worked for two employers during the financial year. Employer A reported a salary of ₹4,00,000 and deducted TDS accordingly, while Employer B reported ₹6,00,000 but did not update their TDS return. The AIS shows a total income of ₹10,00,000, but Form 26AS reflects TDS only from Employer A.
In this case, the taxpayer should first request Employer B to file a revised TDS return. If it is not updated before the filing deadline, the taxpayer must still report the total salary of ₹10,00,000 in the ITR but claim only the TDS reflected in Form 26AS. Once the employer updates their filing, a revised ITR can be submitted to claim the remaining TDS.
Consequences of Ignoring Salary Mismatch in ITR
Ignoring a salary mismatch can result in several complications. The Income Tax Department may issue a notice under Section 143(1) or Section 139(9), seeking an explanation for the discrepancy. Refunds may be delayed until the mismatch is resolved, and repeated inconsistencies can trigger deeper scrutiny or assessment proceedings.
A mismatch also increases the likelihood of receiving a defective return notice, which can lead to penalties if not corrected in time. To maintain compliance and avoid unnecessary notices, taxpayers should verify all documents before filing and ensure accurate reporting of salary and TDS figures.
Preventing Salary Mismatch in Future ITR Filings
The easiest way to avoid mismatches in future filings is through proactive verification. Before filing your ITR, always download and review Form 16, AIS, and Form 26AS from their respective portals. Ensure that all entries—salary, bonuses, deductions, and TDS—are consistent across documents.
If you have multiple income sources or switched employers, inform each employer of your previous salary and TDS deductions to ensure accurate reporting. Regularly check the Income Tax portal for updates and keep digital copies of payslips and bank statements as evidence.
Role of TaxBuddy in Preventing Form 16 and ITR Mismatch
TaxBuddy’s AI-driven platform simplifies the reconciliation process between Form 16, AIS, and Form 26AS. The system automatically compares data from these documents, flags inconsistencies, and provides step-by-step correction suggestions before filing.
Its expert-assisted plans ensure that every detail—from salary components to TDS entries—is verified by professionals, reducing the risk of notices or refund delays. TaxBuddy’s seamless user interface allows taxpayers to upload Form 16, and the platform instantly highlights mismatched entries for correction, ensuring a stress-free filing experience.
Conclusion
Handling salary mismatches between Form 16 and ITR becomes easy when taxpayers stay proactive and informed. Regular verification, timely communication with employers, and accurate reporting are essential for preventing errors and delays. Using automated tax filing platforms like TaxBuddy ensures that your salary, TDS, and other income details align perfectly across all documents, minimizing the chances of receiving notices.
For anyone looking for assistance in tax filing, it is highly recommended to download the TaxBuddy mobile app for a simplified, secure, and hassle-free experience.
FAQs
Q1. Does TaxBuddy offer both self-filing and expert-assisted plans for ITR filing, or only expert-assisted options?
TaxBuddy provides flexibility to users by offering both self-filing and expert-assisted plans. The self-filing option allows taxpayers to independently file their returns using the platform’s AI-driven tools that automatically extract and validate data from Form 16 and Form 26AS. For those who prefer professional support, the expert-assisted plan assigns a dedicated tax expert who reviews every detail, ensures accuracy, and handles all follow-ups, including post-filing notices. This dual-option system caters to both tech-savvy users and individuals seeking end-to-end expert handling.
Q2. Which is the best site to file ITR?
While several platforms assist in filing ITRs online, TaxBuddy stands out for its combination of automation and human expertise. Its AI-based engine automatically reconciles income, TDS, and deduction data, while tax professionals verify the return for compliance. The platform offers a seamless upload feature for Form 16, smart error detection, and free notice support after filing. Moreover, TaxBuddy maintains data security through end-to-end encryption, making it one of the most reliable and secure ITR filing platforms in India.
Q3. Where to file an income tax return?
An income tax return can be filed either on the official Income Tax e-filing portal (www.incometax.gov.in) or through an authorized platform like TaxBuddy. The Income Tax portal is suitable for those comfortable with manual data entry and reconciliation, while TaxBuddy simplifies the process by automatically extracting and validating data from your Form 16, AIS, and Form 26AS. Its guided interface ensures accuracy in deductions, exemptions, and TDS reporting, reducing the chances of mismatch or defective returns.
Q4. What should I do if my employer doesn’t update Form 16?
If your employer fails to update or correct Form 16, you should still report the correct salary and TDS information in your ITR. Use your payslips, bank statements, and employment records to determine the accurate figures. However, only claim TDS amounts that are reflected in Form 26AS since this is the data verified by the Income Tax Department. You can also request your employer to file a revised TDS return under Section 200(3) to ensure that the corrected details appear in your Form 26AS before final submission.
Q5. Can I correct a mismatch after filing my ITR?
Yes. If you discover an error or mismatch after filing, you can correct it by submitting a revised return under Section 139(5). The revised return must be filed before the end of the relevant assessment year or before the completion of the assessment, whichever is earlier. The revised return replaces the original return and should include the correct income, TDS, and deduction details. Platforms like TaxBuddy allow users to easily revise returns by updating only the mismatched data without re-filing from scratch.
Q6. How do I know if my ITR has been marked defective due to a mismatch?
If your ITR contains discrepancies such as mismatched income, missing TDS details, or invalid figures, the Income Tax Department may label it as defective under Section 139(9). You will receive an email and SMS notification specifying the reason for defect and the corrective steps to follow. You can view this notice by logging into the e-filing portal under “e-Proceedings.” After rectifying the mismatch, you must re-submit your corrected return within the given time frame to prevent it from being treated as invalid.
Q7. Will the Income Tax Department issue a notice for salary mismatch?
Yes. When there is a substantial difference between the income reported in your Form 16, AIS, and ITR, the Income Tax Department may issue a notice under Section 143(1) or Section 139(9). These notices are primarily for clarification and correction, not penalties, provided you respond within the stipulated time. Salary mismatches often arise due to unreported bonuses, arrears, or errors in TDS reporting by the employer. Prompt verification and communication with your employer can resolve most issues without further scrutiny.
Q8. Can I claim TDS that’s not reflected in Form 26AS?
No. Only TDS entries visible in your Form 26AS are eligible for credit. This form acts as the official confirmation that the tax deducted from your income has been deposited with the government. If your employer or deductor has not updated the TDS details correctly, you must request them to revise their TDS return. Claiming unreflected TDS may lead to a mismatch notice or disallowance during processing. TaxBuddy automatically matches your Form 26AS with Form 16 to prevent such incorrect claims.
Q9. Does a small mismatch in salary require revision?
Minor differences caused by rounding off or negligible timing variations in crediting salary usually do not require filing a revised return. However, if the mismatch alters the taxable income or affects deductions and TDS calculations, it is advisable to correct it. Filing an accurate return ensures faster refund processing and reduces the likelihood of receiving a defective return notice. TaxBuddy’s smart comparison feature detects even minor deviations and alerts you before submission, minimising post-filing issues.
Q10. How can I check if my employer filed a revised TDS return?
To confirm whether your employer has filed a revised TDS return, log in to the Income Tax e-filing portal and download the latest version of Form 26AS. If the employer’s correction has been processed by TRACES, the updated TDS entries will appear in your account. The processing may take a few weeks, depending on the employer’s filing schedule and TRACES system updates. Regularly monitoring your Form 26AS ensures you claim only valid and updated TDS credits.
Q11. How does TaxBuddy prevent ITR mismatches?
TaxBuddy uses advanced AI algorithms to cross-verify data from multiple sources—Form 16, Form 26AS, and AIS—to ensure consistency before filing. The platform instantly flags mismatched entries, missing deductions, or incorrect TDS figures. Users receive detailed correction suggestions and real-time validation reports. The expert-assisted plan further includes manual review by tax professionals who confirm that income, exemption, and deduction entries are perfectly aligned, ensuring the return is accurate, compliant, and free from potential notices.
Q12. Is manual filing riskier than using a platform like TaxBuddy?
Manual filing increases the likelihood of input errors, incorrect calculations, or mismatched entries between Form 16 and Form 26AS. Even minor mistakes can lead to notices, refund delays, or defective return status. In contrast, filing through an AI-driven platform like TaxBuddy minimizes risks by automating data import, validation, and error detection. Additionally, expert review ensures compliance with the latest tax laws and budget changes. This combination of automation and expert oversight makes TaxBuddy a safer, more reliable choice for every taxpayer.
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