CA Gautam Joshi

It hurts isn’t it when somebody deducts our tax monthly or quarterly even if our total income during the year does not exceed maximum exemption limit. TDS being an early collection for government becomes tedious both for employer and employee especially when employee’s total income during the year does not exceed maximum exemption limit.

Form 16 or 16A are provided by employer to employee as a proof of tax deduction. At the end of the financial year, tax payers file their income tax returns (ITR) from the income tax details provided in form 16 or 16A.

On the other side, as a part of e-governance, tax payer is provided 26AS annual statement showing his total TDS deducted during the year. This facility is available on income tax portal www.incometaxindia.gov.in.

Now, 26AS annual statement shows correct TDS only when employer has deposited the same TDS which is deducted from the tax payer’s income and filed quarterly return in time and that too correctly. The ambiguity is ITR filed by tax payer (especially amount of TDS) is assessed with 26AS annual statement and not with form 16 or 16A provided by employer. This has resulted into wrong ITR processing and delay in genuine refund claims. In line of this tax payers receive intimations for difference of TDS between form 16/16A or 26AS annual statement and finally have to file rectification u/s 154 showing reasons of non-reconciliation of TDS amount between form 16/16A or 26AS annual statement.

1. Should government introduce any amendment to resolve this issue?

If not amendment, government should at least strengthen the penal provisions of non-filling or filling erroneous TDS returns. Though F.Y. 2011-12 budget has place significant influence on these issues, instances found where field officers have shown reluctance in raising inquiries to employers not filling or filling erroneous TDS returns.

It would be a revolutionary change in law if the tax payers who suffer from this non-reconciliation of TDS amount are given powers to intimate the name and details of employers to income tax officers to initiate penal provisions against them in this regard.

2. Is there any pre-caution for tax payer while filling ITR?

Tax payer before filling his ITR must reconcile his TDS certificates i.e. form 16 or 16A with online tax credit available in 26AS annual statement. If TDS amounts very, he should first request (in writing and take an acknowledgement of receipt) his employer to correct the non-compliance on his part and if the same has not been complied; intimate this fact (in writing and take an acknowledgement of receipt) to employer’s jurisdictional income tax officer and file his ITR in time without worrying for compliance from employer. If intimation is received from the income tax office later, tax payer should rectify the error u/s 154 and provide form 16 or 16A with his written efforts to make employer comply his duties.

(Article was First Published on 28.06.2011)

More Under Income Tax

Posted Under

Category : Income Tax (27495)
Type : Articles (16980)
Tags : CA Gautam Joshi (17) Form 16 (48) form no 16a (17) TDS (1024)

0 responses to “Form 16/16A v/s 26AS online annual statement”

  1. rahul says:

    Dear sir,

    I am a LIC agent. My TDS is deducted from monthly commission which i get.
    I have to claim it. Pl advice how to fill the return. Post is not ready to give TDS paid certificate & form16a saying it is available online.
    if yes how to dowload online.

  2. raghu says:

    Dear Sir,

    Pls clarify is TDS certificates ( Form 16A ) is collection is Mandatory / or Not only FORM 26AS is enough for financial year.Because TDS certificates having same details of Form26AS.

  3. T V Krishnamurthy says:

    Constitution of India is at fault.
    Difference between form 16 and form 26AS is due to errors in system of reporting and compiling TDS details. Such errors should be corrected by income tax department officials. If department officials do NOT perform their duties with due diligence they cannot be punished as public servants cannot be punished for ommissions and commissions in performance of duties.
    In case of TDS deductor being a pubic servant(in PSU) the problem is compounded as the official resposible for deduction cannot be punished.
    In case TDS deductor is a private employee the the problem gets resolved if the difference is large and the deductee takes a loss if difference is small.
    As a result the Constitution of India is unfortunately and sadly not worth the paper it is written on. We have accepted this in public in CNG case when judges ignored fundamental right to work (including practice a trade) of Delhi citizens by ordering public transport off the roads rather than punishing State Transport Officials who ignored judicial directions.
    Issue of TDS differences is similar. There is NO remedy under the Constitution of India.

  4. Neelam Srivastava says:

    tell me what is the use of form 26 as and why deducted tds and what is tds & what is the profit & loss.

  5. Kishore Nair says:

    Hi.

    I was employed with Strive India Education Foundation from 29th July 2013 up to May 2014 as an Associate Professor (finance – MBA) at Universal Business School Karjat.

    1. They have not deposited my TDS for the months of March, April and May 2014.(perpertual defaulters)

    2. They still have to furnish me with my form 16

    What are the consequence of the above when i file my ITR for AY 2014-2015? What are the remidies avialble to me.

    Best wishes

    Kishore Nair – kishore.nair57 @ yahoo.com

  6. Imtiyaz Hussain says:

    Dear Sir, my 26 AS shows higher paid amount/credits by the employer than actually gross paid. whereas the part B of the form 16 shows the correct amount.

    how to get this corrected. What is the solution ? should I file return now or wait for the correction in form 26AS by the employer ?

    As I understand from this forum it is a common problem faced by many taxpayers.

    With regards,

    Imtiyaz Hussain

  7. Suresh Patil says:

    There were instructions from IT department to assessing officers that for year 2010-11, if difference in 26AS and TDS certificate given to deductee is less than 5000, refund can be given without further verification.
    Can any expert explain & advise whether such circular can help tax payers to get refund without the need of fully matching the tax deduction with AS26?

Leave a Reply

Your email address will not be published. Required fields are marked *