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What To Do If Discrepancies Appear 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.

If discrepancy is due to deductor , then he may file TDS/ TCS correction statement and correct the same.

Source: Income Tax India’s Official Portal

What is Form 26AS?

It is a form issued under Rule 114-I, wherein the following information related to taxpayer is published:

a) Information relating to TDS and TCS;

b) Information relating to Specified Financial Transactions (SFT);

c) Information relating to payment of taxes;

d) Information relating to demand and refund;

e) Information relating to pending proceedings;

f) Information relating to completed proceedings;

g) Information received from any officer, authority or body performing any functions under any law or information received under an agreement referred under section 90 or section 90A;

h) Relating to GST return;

i) Foreign remittance reported in Form 15CC;

j) Information in Annexure-II of the Form 24Q of the last quarter

k) Information in ITR of other taxpayer

l) Interest on Income Tax Refund;

m) Information in Form 61/61A where PAN could be populated;

n) Off Market Transactions Reported by Depository/Registrar and Transfer Agent (RTA);

o) Information about dividend reported by Registrar and Transfer Agent (RTA);

p) Information about purchase of mutual fund reported by Registrar and Transfer Agent (RTA); and

q) Information received from any other person to the extent it may be deemed fit in the interest of the revenue.

Source: Income Tax India’s Official Website https://incometaxindia.gov.in/Pages/default.aspx

How To View Form 26AS Through Net Banking

This facility is available to a PAN holder having net banking account with any of authorised banks. View of Form 26AS is available only if the PAN is mapped to that particular account. The facility is available free of cost. Login to your bank’s internet banking website and click on the option provided to view Form 26AS.

Step – 1

To view 26 AS visit http://contents.tdscpc.gov.in/en/netbanking.html

Step – 2

Click on the bank with which you have internet banking facility and your PAN have been mapped correctly.

Step – 3

After clicking on the concerned bank name, a screen will appear that will prompt you to go to bank’s website.

Step – 4

Step – 5

Click on “Tax Credit Statement” to view details.

For more information, Please Click Here

Source: Income Tax India’s Official Website https://incometaxindia.gov.in/Pages/default.aspx

How To View Form 26AS Through Income Tax E-filing Portal

Perform the following steps to view or download the Form-26AS from e-Filing portal:

Step-1: Logon to ‘e-Filing’ Portal https://www.incometax.gov.in/iec/foportal/

Step-2: Go to the ‘My Account’ menu, click ‘View Form 26AS (Tax Credit)’ link.

Step-3: Read the disclaimer, click ‘Confirm’ and the user will be redirected to TDS-CPC Portal.

Step-4: In the TDS-CPC Portal, Agree the acceptance of usage. Click ‘Proceed’.

Step-5: Click ‘View Tax Credit (Form 26AS)’

Step-6: Select the ‘Assessment Year’ and ‘View type’ (HTML, Text or PDF)

Step-7: Click ‘View / Download’

Note: To export the Tax Credit Statement as PDF, view it as HTML > click on ‘Export as PDF’.

Breaking: Service Tax Liability Can Not Be Imposed Only On The Basis Of Form 26AS [Read Judgement]

In the case of M/s Luit Developers Private Limited vs Commissioner of CGST & Central Excise, Dibrugarh, the CESTAT Kolkata has held that:

I also find that the appellant is a Pvt Ltd Company and figures in Form 26AS are already included in Revenue from Operations in the Profit/Loss Account of Balance Sheet, which is a public document, and therefore no suppression can be alleged as held in Hindalco Industries Ltd (supra). I also find that the Department has not adduced any positive evidence to show malafide intention for evasion of service tax and therefore extended period cannot be invoked as held in Pushpam Pharmaceuticals Limited (supra).

Therefore, in view of the above discussions and decisions cited, the entire demand fails on merits as well as on limitation. Thus, there can be no imposition of Service tax, interest and penalty on the appellant. The impugned order cannot be sustained and is set aside. Accordingly, the appeal is allowed with consequential benefits.

To Download the Judgement, Please Click Here

Taxpayers receive notices: Data mismatch between AIS and Form 26AS the reason

Did you file an early income-tax return, before the Annual Information Statement (AIS) was launched? Chances are your tax return may have attracted a demand notice if you had ignored some essential income received during the financial year.

So far, one had to refer to the annual tax statement or the Form 26AS before filing returns. The AIS was launched only on November 1, 2021. While only high-value transactions and tax deductions at source are mentioned in Form 26 AS, the AIS contains all details of savings bank interest, dividends, capital gains and share transactions.

Many taxpayers got lower refunds this year due to data mismatch between Form26AS (from NSDL) and the pre-filled income tax forms (maintained by the income-tax department).

Kirti Misal, 38, had forgotten to mention the savings bank account interest from an old account that she hardly uses. “I didn’t have the passbook or online access for that account. In the rush to file the returns, I didn’t mention the savings interest,” she says.

Since Kirti filed her return in October 2021, she didn’t have access to the AIS and has engaged a chartered accountant to respond to the notice.

“The recently-launched AIS is a comprehensive document and contains a vast amount of information such as savings bank interest, dividends. The existing Form 26 AS used to feature only the FD interest and wouldn’t capture the details of dividends. So, those who didn’t have the AIS information available before and filed the returns only based on Form 26 AS have been receiving notices,” says Karan Batra, founder, Chartered Club.

The differential in actual taxable amount and the reported transaction amount has led to many notices.

Ahmedabad-based Chartered accountant, Raju Shah, says, “There are many adjustment-linked notices that we have received for our clients. So, with regards to capital gains, the actual cost has been considered in AIS. But under capital gains, an indexed cost is to be considered. Due to the difference in the net and gross taxable income, an income tax notice has been received under Section 143 (1).”

Shah had to respond to the notice within 30 days, but the income tax portal wasn’t permitting uploads of response, so he resorted to the manual response method.

Similarly, there is a difference in share sale transactions too. “The value of actual taxable sale never matches as per the AIS as the gross amount is mentioned including brokerage and other costs. The notices are computerised, based on the AIS figures and hence even indexed costs aren’t considered,” says Paras Savla, partner at KPB & Associates.

“Double reporting (amount reflected under two PANs) is being done for specified financial transactions when it comes to joint holding in shares and mutual funds,” Savla adds.

What to do?

So, if you have received such a notice via email or post then check the timeline to respond to the notice and avoid delay. Assess whether the mistake is actual or a different calculation has been considered.

“For bank account interest, reporting of dividends, the tax assessee is responsible. With or without AIS, it has to be reported,” says Shah.

If the tax demand is valid, then go ahead and follow the due procedure. In case you need to file for rectification or report any mismatch, then the online option is available once you log into the new income tax portal.

How to avoid notices

If you are yet to file your tax return, then do check both the Form 26 AS and the AIS before filing the tax return. Do not forget to take into account all the bank accounts for the purpose of savings bank account interest and dividends. Remember, some income would not be taxable, but yet has to be declared in the income tax return.

This is critical in the current year, as the assessees have not much time to revise the return. This is because due date for filing original ITR is 31st December 2021 (extended) and for revised ITR, it is 31st March 2021.

Income Tax Department Rolls Out New Annual Information Statement (AIS) On Compliance Portal

Income Tax Department rolls out the new Annual Information Statement (AIS) on the Compliance Portal. It provides a comprehensive view of information to taxpayer, with facility to capture online feedback. Please click on link ‘AIS’ under the ‘Services’ tab on incometax.gov.in to access. New AIS includes additional information relating to interest, dividend, securities & mutual fund transactions, foreign remittance etc. The reported information has been processed to remove duplicate information. Taxpayer may submit online feedback if info found to be incorrect.

Only Amount Reflected in Form 26AS Does Not Mean that Assessee is the Actual Beneficiary Unless It is Established: ITAT

In the case of Dr Swati Mahesh Vinchurkar vs DCIT, ITAT Surat bench has held that:

We have considered the rival submissions of the parties and have gone through the orders of the lower authorities carefully. There is no dispute that the assessee is resident of Surat. The assessee is qualified Doctor being Pediatric (Child Specialist). While filing her return of income the assessee has shown income from profession and other sources. During the process by CPC, the additions were made in the hand of assessee on the basis of TDS shown in Form-26AS. We find that in response to the notice of CPC, the assessee denied of having such income and that her response was ignored. Before ld CIT(A) the assessee again specifically contended that she has not earned such income nor any work was performed by her. We find that despite specific contention of the assessee, the ld CIT(A) instead of verifying the facts confirmed the additions by taking view that it seems that CPC had considered the appellant explanation before making disallowance and that there is prima facie evidence. We find that both the authorities below acted in a mechanical way. There is no consideration of the contentions raised by the assessee that she has not worked or earned any income from such deductor. In our view once the assessee denied that she has not earned such income as reflected in her Form-26 AS, the onus shift on the revenue authorities to prove such income of the assessee. The addition is based solely on the basis of TDS shown in Form-26AS, ignoring the submissions of the assessee. The ld. AR for the assessee vehemently argued before us that the deductor if more than 1000 KM away from the place of practice of assessee. Considering the peculiar facts of the present case, we find merit in the submissions of the ld AR for the assessee that the assessee had entered into any such transactions and the lower authorities have not made any verification or effort to verify such transactions and there is certain mistake of entering the wrong PAN, which belongs to the assessee and the addition made in the income is uncalled for.

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