Rectifying TDS Mismatch with Form 26AS Using ITR-U: Step-by-Step Guide

TDS (Tax Deducted at Source) mismatch is a common issue faced by taxpayers during Income Tax Return (ITR) filing. It occurs when the amount of tax deducted at source, as per the TDS certificates or Form 16/16A, does not match the records reflected in the Income Tax Department’s system. This mismatch can result in delays in the processing of refunds, or the filing may even be rejected if the discrepancy is not resolved. Understanding what TDS mismatch is, why it occurs, and how to rectify it is essential to ensure smooth and accurate tax filings.

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Table of Contents

• What is TDS Mismatch and Why Does it Occur?

• How to Identify TDS Mismatch?

• Steps to Rectify TDS Mismatch Using Form 26AS and ITR-U

• Important Points to Remember

• Conclusion

• FAQs

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What is TDS Mismatch and Why Does it Occur?

TDS mismatch occurs when the tax deducted at source (TDS) by your employer or other deductors, as shown in the TDS certificates, does not align with the data recorded in the Income Tax Department’s records. In simpler terms, this means the TDS amounts that are supposed to be credited to your account don’t match the details available to the authorities.

Several reasons can cause TDS mismatch:

• Late or Incorrect TDS Filing by Deductors: If the person or organization deducting TDS (such as an employer or bank) does not file their TDS returns on time, or if they enter incorrect information, it can lead to discrepancies in the TDS records.
  

• Incorrect TDS Amount Reported: There may be errors in the TDS amounts reported by the deductor, leading to a mismatch between your records and the Income Tax Department’s records.
  

• TDS Not Reflected in Form 26AS: TDS deductions might not be accurately reflected in your Form 26AS (the tax credit statement), especially if there’s a delay in the deduction being reported to the Income Tax Department.
  

• Multiple Deductors or Multiple TDS Certificates: If you have more than one employer or source of income, sometimes the aggregation of TDS from multiple sources can cause errors, leading to a mismatch between the reported and the actual TDS amounts.

How to Identify TDS Mismatch?

Identifying TDS mismatch is crucial to ensure your ITR is filed correctly and on time. Here’s how you can spot TDS mismatches:

• Check Form 26AS: Form 26AS is the tax credit statement that contains all the details of TDS deducted and deposited by your employer or other deductors. It is available on the Income Tax Department’s website and can be accessed through the e-filing portal. If the TDS deducted is not reflecting correctly in Form 26AS, it may lead to a mismatch.
  

• Compare TDS Amounts in Form 16/16A with Form 26AS: Form 16 (for salaried employees) and Form 16A (for non-salaried income) are issued by your employer or the deductor. Compare the TDS amounts mentioned in these forms with those shown in Form 26AS. Any discrepancies in the figures are clear indications of TDS mismatch.
  

• Look for “Unmatched” or “Incorrect” Records: When filing your ITR, the system may highlight any mismatches or discrepancies in the TDS information. If any TDS is missing or incorrectly reported, the e-filing portal will alert you during the submission process.
  

• Income Tax Department Communication: If the TDS mismatch is significant, the Income Tax Department may send you a communication regarding the mismatch. You may be asked to either provide clarifications or rectify the discrepancies to avoid delays in processing your refund.

Steps to Rectify TDS Mismatch Using Form 26AS and ITR-U

Once you’ve identified a TDS mismatch, here are the steps to rectify it:

• Download Form 26AS: First, log in to the Income Tax Department’s e-filing portal and download your Form 26AS. This will show the TDS credits as per the Income Tax Department’s records. Compare these records with the TDS shown in your Form 16 or Form 16A.
  

• Verify TDS Details with Your Deductor: If there is a mismatch, get in touch with the deductor (employer, bank, etc.) to ensure they have correctly reported the TDS. Sometimes, the mismatch may be due to an error on their end, such as entering incorrect PAN or challan details.
  

• Request a Correction: If the deductor finds any error, they must file a correction request using Form 24Q (for TDS on salary) or Form 26Q (for TDS on other payments). The correction should reflect the correct TDS information, and it will then be updated in Form 26AS.
  

• File a Revised ITR (ITR-U): If the TDS mismatch is discovered after submitting your original ITR, you can file a revised return under Section 139(5) or use ITR-U for an updated return. ITR-U allows you to update your tax return and rectify any errors or omissions, including mismatched TDS details.
  

• Wait for Updated Form 26AS: After the correction is made by the deductor, Form 26AS will reflect the correct TDS information. Once updated, you can file your ITR with the accurate details.
  

• Ensure Refunds are Processed: After rectifying the mismatch, ensure that your refund process is not delayed. The Income Tax Department may take time to process the updated returns, but with correct TDS details, your refund should be processed smoothly.

  
  

Important Points to Remember

• Check TDS Regularly: Always keep track of TDS deductions and ensure that they are accurately reflected in Form 26AS. Monitoring your Form 26AS periodically will help you identify any discrepancies early on.
  

• Avoid Last-Minute Filing: To prevent rushing through the process and missing out on crucial details, file your return as early as possible. This will allow you time to rectify any mismatches that may arise.
  

• Ensure Correct PAN Details: Incorrect PAN details provided by the deductor can cause a TDS mismatch. Always verify that the deductor has entered your PAN correctly in their TDS records.
  

• Follow Up with Deductors: If there is a mismatch, immediately contact your deductor for corrections. Delays on their part can affect your filing and refund processing.
  

• Use ITR-U for Corrections: If you need to make corrections after filing, use the ITR-U form. This ensures your return is updated with the correct TDS details.

Conclusion

TDS mismatch is a common issue that can complicate the process of tax filing and delay the processing of refunds. However, identifying and rectifying the mismatch is crucial to ensuring your ITR is accurate. By following the steps outlined, such as downloading Form 26AS, verifying TDS details, contacting your deductor for corrections, and using ITR-U for updating your return, you can resolve the issue efficiently. Staying on top of your TDS records and filing early will help avoid any complications down the line, ensuring that your tax filing is smooth and your refund is processed without delays. For anyone looking for assistance in tax filing, it is highly recommended to download theTaxBuddy mobile appfor a simplified, secure, and hassle-free experience.

Frequently Asked Question (FAQs)

Q1: What should I do if I notice a TDS mismatch after filing my ITR?

If you notice a TDS mismatch after filing your ITR, you should file a revised return using ITR-U to update the TDS details. This allows you to correct the discrepancies in the TDS amounts, ensuring that your tax filing is accurate. It’s essential to carefully check your TDS credits before filing, but if you discover an error later, a revised return is the best way to resolve the issue. Make sure that the correct TDS details are reflected in your Form 26AS before filing the revised return.

Q2: How can I ensure my TDS records are correct before filing?

To ensure that your TDS records are accurate before filing your ITR, regularly review your Form 26AS, which is a consolidated statement that reflects the TDS credits for which tax has been deducted at source on your income. Compare this with the details provided in your Form 16 or Form 16A (for salary and non-salary TDS, respectively). If any discrepancies are noticed between Form 26AS and the forms provided by your employer or deductors, contact them to rectify the issues before filing.

Q3: How long does it take to correct a TDS mismatch?

Correcting a TDS mismatch can take some time, depending on the deductor's ability to update their TDS filings. If the error is on your employer’s end, they must file a correction in their TDS return, which can take a few days to weeks depending on their processing times. Once the correction is made, Form 26AS will reflect the updated TDS details. After this, you can file a revised return. It’s important to monitor the changes in Form 26AS to ensure that everything is updated correctly before resubmitting your return.

Q4: Can a TDS mismatch delay my tax refund?

Yes, a TDS mismatch can delay the processing of your refund. The Income Tax Department processes refunds based on the TDS details reported in your return. If there is a mismatch between the TDS credits reflected in Form 26AS and the information submitted in your ITR, the department may flag the discrepancy, delaying your refund until the mismatch is corrected and verified. To avoid delays, it’s important to ensure that your TDS details are accurate before filing.

Q5: How can I rectify TDS errors on Form 26AS?

Rectifying TDS errors on Form 26AS requires the deductor (such as your employer or any other party who deducted TDS) to file corrections with the TDS return. If your employer hasn’t reflected the correct TDS amount, they need to file a correction in their TDS return using the appropriate forms, such as Form 24Q (for salaries) or Form 26Q (for other TDS). Once the correction is made, your Form 26AS will reflect the accurate TDS details, and you can then proceed to file or revise your ITR accordingly.

Q6: Is there a penalty for TDS mismatch?

While there is no direct penalty specifically for a TDS mismatch, failure to resolve the mismatch can cause delays in your tax filing and refund processing. This could potentially result in late filing penalties if your filing is delayed due to unresolved TDS issues. It's crucial to address any mismatches before filing to avoid further complications, including delays in receiving refunds or potential scrutiny from the Income Tax Department.

Q7: How do I track TDS credits in my ITR?

TDS credits are reflected in your Form 26AS, which you can access through the Income Tax Department's e-filing portal. This form provides a detailed record of all TDS deducted and deposited by your employer or other deductors. You should regularly check this document to ensure that all TDS credits are correctly reflected before filing your ITR. If there are any discrepancies, it’s essential to contact the relevant deductor for correction before proceeding with your filing.

Q8: Can I correct the mismatch directly with the Income Tax Department?

No, you cannot directly correct a TDS mismatch with the Income Tax Department. The responsibility for correcting TDS errors lies with the deductor. You can only update your ITR once the deductor has made the necessary corrections to their TDS filings. Therefore, if there is an issue with your TDS credit, you should first contact your employer or the relevant deductor to resolve it, and then you can file a revised return once the details are corrected.

Q9: What if my employer hasn’t reflected the correct TDS in Form 26AS?

If your employer has not reflected the correct TDS in Form 26AS, you should immediately contact them to rectify the issue. They will need to file a correction in their TDS return, ensuring that the accurate TDS amount is updated. If they do not resolve the issue promptly, you can’t file your return with accurate TDS details, which could lead to discrepancies and delays in processing your refund. Always ensure your Form 26AS is up to date before filing your ITR.

Q10: How does TDS mismatch affect my tax filing?

A TDS mismatch can create discrepancies in your tax filing, especially if the TDS credits reflected in your ITR do not match those shown in Form 26AS. This can cause the Income Tax Department to reject your return or delay its processing. A mismatch can also result in the need for filing a revised return, which further delays the process of finalizing your tax filing. To avoid this, always verify your TDS records before filing to ensure accuracy.

Q11: Can I file an ITR if my TDS is not updated in Form 26AS?

It is highly advisable to wait until your TDS is updated in Form 26AS before filing your ITR. Filing your return without the correct TDS details can lead to errors, which could result in your return being rejected or delayed. If your TDS details are missing or incorrect, contact your employer or the relevant deductor to update the information in Form 26AS before submitting your return.

Q12: What if the TDS mismatch is not resolved in time?

If the TDS mismatch is not resolved before the filing deadline, your refund could be delayed. The Income Tax Department will not process refunds until the discrepancies are cleared, which may involve further verification or filing a revised return once the TDS details are corrected. If the issue isn’t resolved in time, you may need to take corrective action by filing a revised return after the TDS mismatch is rectified, potentially causing further delays in receiving your refund.