What is 26AS and procedure for discrepancies in actual TDS and TDS credit as per Form 26AS

[Sandeep Rawat]

Form 26AS

A taxpayer may pay tax in any of the following forms:

(1)   Tax Deducted at Source (TDS)

(2)   Tax Collected at Source (TCS)

(3)   Advance tax or Self-assessment Tax or Payment of tax on regular assessment.

The Income-tax Department maintains the database of the total tax paid by the taxpayer (i.e., tax credit in the account of a taxpayer). Form 26AS is an annual statement maintained under Rule 31AB of the Income-tax Rules disclosing the details of tax credit in the account of the taxpayer as per the database of Income-tax Department. In other words, Form 26AS will reflect the details of tax credit appearing in the Permanent Account Number of the taxpayer as per the database of the Income-tax Department. The tax credit will cover TDS, TCS and tax paid by the taxpayer in other forms like advance tax, Self-assessment tax, etc.

Income-tax Department will generally allow a taxpayer to claim the credit of taxes as reflected in his Form 26AS.

Procedure to be followed in case of discrepancies in actual TDS and TDS credit as per Form 26AS

Every person deducting tax at source has to furnish the details of tax deducted by him to the Income-tax Department. The details will cover the name of the deductee, Permanent Account Number of the deductee, amount of tax deducted, amount paid to the deductee, date of payment of TDS to the credit of Government, etc. On the basis of the details of TDS provided by the deductor, the Income-tax Department will update Form 26AS of the deductee.

Many times the actual amount of TDS and TDS credit as appearing in Form 26AS may differ and it may happen that the TDS credit appearing in Form 26AS may be less as compared to actual TDS, this may happen due to reasons like non-furnishing of TDS details to the Income-tax Department by the deductor, deducting the tax in incorrect Permanent Account Number, etc. In such a case the deductee should approach the deductor and request him to take the necessary steps to rectify the discrepancy due to above reasons.

The Income-tax Department updates the TDS details in Form 26AS on basis of details provided by the person deducting the tax (i.e., the deductor), hence, if there is any default on the part of deductor like non -furnishing of TDS details (i.e., TDS return) to the Income-tax Department, deducting the tax in incorrect Permanents Account Number, etc. then Form 26AS will not reflect the actual TDS. In such a case, the taxpayer may not be able to claim the credit of correct TDS. Hence, the taxpayers are advised to confirm the tax credit appearing in Form 26AS and should reconcile the difference, if any.

For further clarification and professional assistance, feel free to contact at [email protected]

(Mr. Sandeep Rawat has vast experience & knowledge in dealing with Direct and Indirect Taxation. He is Cofounder & Managing partner at SRTConsultancy & Co. )

Discussions to this article

[Ganeshan Kalyani]

TDS is in fact tedious. If the deductor does error in filing the tds return the deducted will be denied the credit. The deductee has to approach the deductor and follow up continuously to get the details filed under correct PAN. Government has left the deductor and deductee to solve the error amongst themselves. They have in fact shifted the responsibility on the parties to the transaction. It is good we can say.