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)

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Tags : CA Gautam Joshi (17) Form 16 (45) form no 16a (17) TDS (896)

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?

  8. vimal says:

    dear Bhupinder 

    File ur return as per ur form 16 when demand should be raised by income tax then send the application u/s 154 along with the copy of ur form 16…

  9. bhupinder says:

    my form 16 is different from form 26as ie showing paid up income as well as tds. I should file return as per which form

  10. A.V.MAHESH says:

    sir,
    In my company I TAX deduct by my salary as per form 16 but 26 a s shows wrong ,now demand amount adjust is adjust my refund amount how is salve this problem 

  11. A.V.MAHESH says:

    sir, in my company I Tax deduct in my salary but in 26 a s shows wrong now demand amount adjust in my refund amount , how is the solve ofmy problem

  12. Neeraj Singh says:

    Sir,
    earlier i have work with wipro and as a trainee and he has given me form 16A.

    in last November I have contacted with one of incomtax agent to fill this and he has been done this but i forget to save there details.

    And now its 9 month to complete but not get my amount.

    So please suggest me on this please as my amount was 20,000/-

    Regards,
    neeraj
    09986002060

  13. Nitin Sen says:

    I have deducted TDS of three parties and paid it vide challan no.01652 through online tds payment by Bank of India Nagpur Branch for month of April-12, 1st quarter. But wen I generate form 16A for 1st quater of these parties the said challan amount shows status of booking mismatched at their respective form 16A. So what can i do for this problem and provide me solution???

  14. dattatreyahg says:

    Great. No comment from anyone,least of all from TAXGURU on what I said on 4th May 2012. Looks like I have provided the most acceptable solution to a persistent problem on TDS.Dont I deserve a medal from FINANCE MINISTRY/CBDT for having solved their problem?! Think over and recommend my name for it.It may be called GRAND SOLUTION TO TDS PROBLEMS AWARD.

  15. dattatreyahg says:

    After years of effort to get answers to problems of tds (created by Form 26as),I have found a simple solution. Dont bother about what is not there in form 26as.Pay the full tax as though there is no tds and be done with it,as I have done. After all it amounts to paying 10% extra tax which you may treat as a kind of donation to the Govt. You will not get any exemption or rebate,but definitely you can sleep full 8 hours in comfort and you will not waste your precious time in trying to recover it.

  16. dattatreyahg says:

    My sincere opinion is that IT authorities are paid by govt( taxes collected from you and me) to administer EFFECTIVELY a system of tax collection without harassing the tax payer. In the context of TDS, they have failed in their effectiveness to a large extent in protecting the interest of TDS Deductees. Can you call this system effective when the Tax authorities absolve themselves of their basic duties of disciplining the TDS Deductors (for which they have legal powers), and throw that entire responsibility on the deductees(who have no such legal powers) by ADVISING the deductees to PERSUADE the deductors to act in the prescribed manner?!! This is the crux of the problem. Unless the tax authorities are made to understand the significance of(and are sensitised to) the spirit of CITIZENS CHARTER which is hailed as a great REFORM by no less a person than the Finance Minister, and they are made to work for what they are paid,and they are not allowed to transfer their own duties to be performed by deductees(without any legal powers), the CATCH22 situations they have created will continue to haunt the deductees. It is unfortunate that neither CBDT nor any other professional body has found it fit to highligt these issues in the spirit of finding a solution.

  17. dattatreyahg says:

    Is it of any use writing our problems here? Nobody has said anything so far from Taxguru’s side about any action taken . What a waste of time!

    • admin says:

      Dear Sir,

      The Comment section is for making interaction between our visitors possible. There are 100s of comment on this website daily and it it not possible to reply all.

  18. Srinivas says:

    I couldnt agree more on the volley of woes of deductees, despite their giving accurate PAN numbers to their employers( deductors). The following are the major ailments that are afflicting the deductees, who are the hapless lot as they dont get any response either from the employer or any statutory department specific help in the form of a stricture or notification or a demand or atleast a letter from the tax department to the employers.

    Major issues:

    – Employee provides correct PAN number
    – But gets a Form-16A issued with either incorrect PAN number in some form or the other
    – Even more important, even if the PAN number is correct on the Form16A, the TDS reflected would not match up or would not even exist on 26AS corresponding data.
    – Now there would not be any response either from the department to take notice of it or any response to employee’s requests to the employer
    – But CPC would merely and merrily be sending the notifications to the deductee ie employee that the TDS has not been credited and employee is liable to make the payments; even if the documentary proof of Form16A and all the correspondence with the department and employer is provided
    – Now unless the department, CPC and perhaps even the ombudsman collectively coordinate amongst themselves and integrate their information, employees would be continued to be under the spell of harrowing experiences
    – It is such a simple matter for the department or CPC to immediately issue a notification to the corresponding employer informing that there is indeed a discrepancy on the PAN and 26AS regarding TDS that is supposed to have been deducted on behalf of a particular PAN account holder and advise the employer for rectification. Thats it..I am not sure why the onus of prooving that the TDS indeed is deducted, collected and paid to the government is on employee when the whole process is carried out by the employer?
    – What should a normal employee do if the employer fails to respond despite repeated reminders, requests, registered post ack dues, specially when there is no statutory obligation or governmental nudge on the employer?
    – How can an employe stave off the possible retribution from the employer by merely inform that the PAN number provided by the employee is incorrect( just to safeguard their own interest)?
    – What else can a normal employee to do ensure that the TDS is indeed fully reflected as informed in the Form16A on 26AS as well and get the due credit on CPC databank?

    If any of you have any successful experiences in getting the positive response from the employer or department or CPC after producing all the documentary evidences, kindly share…for the benefit of scores of hapless employees who are indeed suffering on this double whammy( of foregoing the TDS and yet not having to get the credit due to the errors at employer side)

    Many thanks

  19. vijay punani says:

    drar sir,

    my assess only interest income F.Y.2009-10 BANK DEDUCTED TDS 19331.00 (55 ENTERIES) I FILED INCOEM TAX RETUN REFUND 7350.00 RS. ASSESS. NO RECEVED ANY REFUND TILL DATE THAN I SAW FORM 26AS 5 TDS ENTERY STATUS “U” UNMACHE
    SO WHAT I DO.? PLEAS HEL ME

  20. dattatreyahg says:

    TDS problems are created because of a lack of application of mind while converting from manual to computerised system. Complete lack of DOMAIN KNOWLEDGE (which is quite complex involving rights&responsibilities of,and interaction among deductor/deductee/ income tax dept/refund agency etc and documents like I T Return/TDS certificate/E-TDS quarterly& annual return/ correction return/form 26AS/demand or settlement reports etc) on the part of people who created the computerised system is glaringly visible.Some updation efforts have only taen care of tax -collection aspects without solving any of the problems of deductees.In fact,IT Dept has washed off its hands from its responsibility of reconsiling innumerable UNMATCHED entries remaining in Form26AS even after two years for which deductee cannot get refund. In effect he has been made to pay 10%+ more tax. To add insult to injury, Deductee is asked to sort out the matter with the unresponsive deductors.(My efforts in this regard with a Bank–three Emails to the Chairman/personal visits/telephone calls have not borne fruits). This is totally against the spirit of CITIZENS’ CHARTER flaunted by Finance Miniser on more than one occasion. Will TAX GURU do something at the highest level to break this CATCH22 situation and bring relief to deductees?

  21. amit says:

    my previous employer deducted tax from my income but did not credited as TDS (not shown in 26AS) now i have to file a return.

    Please advise me what should i do??

    Thanks

    • GAUTAM JOSHI says:

      Dear Amit,

      First check your 26-AS statement online and see again if recently whether your employer has done enrty of tax deducted at source in your case?

      If not, file the return on the basis of Form 16. Meanwhile, you also send a written to your employer why there is no entry appearing in 26 AS statement and take efforts by that way to get it done.

      I am quite sure, you will receive a miss match between your return filed and computation of IT officer as he will consider TDS amount as per 26 AS statment. Intimation will be sent to you within 6-7 months to you once you file your return stating that your tax is miss matched. However, don’t worry! What you can rely is nothing but Form 16 at this time.

      While rectifying the Intimation received from IT department, show the letter written to employer and write that you took enough efforts to get the entry done in 26 AS statement. I think this is the only method by which you can proove your genuine efforts and get relief. Your refund should have been granted on this basis.

      Warm Regards.

  22. vipul shah says:

    sir,
    when GOVT.DEDUCTOR ISSUED FORM 16A TO DEDUCTEE,BUT NOT FILING E-TDS RETURN ( 26 AS),
    AND I.T.O. REFUSE FOR T.D.S. REFUND ON GROUND THAT YOUR 26AS NOT SHOWING CREDIT AMOUNT DEDUCTED BY GOVT.DEDUCTOR.

    NOW WITHOUT ANY FAULT OF DEDUCTEE,ITO REFUSE TDS REFUND.WHAT IS YOUR ADVISE FOR DEDUCTEE TO GET TDS REFUND ?. GOVT.DEDUCTOR MAKE PAYMENT THROUGH BOOK ENTRY.HOW TO
    VIEW TAX CREDIT WHEN GOVT.DEDUCTOR MAKE PAYMENT THROUGH BOOK ENTRY ?

    AN EARLY REPLY IS REQUESTED.

    VIPUL

  23. Gautam Joshi says:

    For viewers,

    On 8th July 2011, income tax government portal i.e incometaxindia.gov.in website shows the following highlights on the above subject matter which actually put further burden on the part of tax deductee to get the correct compliance done from tax deductor and government takes no responsibility of the same:

    Last Updated: 08 July 2011
    Check your tax credits in 26AS statement before filing IT return for faster processing and quick refunds
    ——————————————————————————————————————————–
    Taxpayers are advised to verify the tax credits available in 26AS statement before filing the Income Tax Return. It will facilitate faster processing and quick refunds. In order to avoid the TDS mismatch i.e if your claim of TDS is higher than the tax credits available in 26AS statement, please contact the Deductor for filing of the correction TDS statement.

  24. dattatreyahg says:

    TDS system of collection of tax has serious defects which has been hurting deductees very badly. It is because of the total lack of application of mind in drafting the rules. Computerisation (Form26AS) made matters worse.On top of it, a DO letter from a member of CBDT sometime June/July 2010,presumably to sort out these problems,compounded the problems,instead of solving the problems.As it stands to-day,the deductee is totally at the mercy of deductor for any mistake committed by the deductor. IT Dept does not haul up deductor to ensure protection to deductee. Deducting,but not depositing/ depositing,but not giving tds certificate/making mistakes in e-TDS return &not caring to scrutinise it for corrections/not sending corrections even after pointing it out……these are going on unabated and deductors are going scot-free. Unless ‘Taking action by IT Dept on deductors’ is made automatic and integrated into the system itself,the woes of deductee will not end.The new CBDT Chief appeared to set things right as soon as he took over and even gave a dead-line to CITs (20th May 2011,if I recall correctly),but nothing seems to have happened on the ground.

  25. Joginder Sain Sud says:

    Dear Mr. Joshi,

    For F.Y 2010-11, my bank namely Bank of India, Pune main branch has shown income of Rs. 33750 in form 16A which I neither earned nor received. I wrote to bank and met manager twice but bank has done nothing to rectify the mistake. What is the remedy for me.

    • Gautam Joshi says:

      Dear Mr. Sud,

      Banks at the end of the year, on request, issue a statement of total interest earned by the account holder. Do take this statement from the bank first and then ONCE AGAIN write a letter to bank manager (DO NO FORGET TO TAKE AN ACKNOWLEDGEMENT OF THIS LETTER AND SAVE AN ACKNOWLEDGED COPY WITH YOU) about difference of income in interest statement given by bank and 26AS statement. I think this will force bank manager to correct 26AS statement. The moment bank manager change errors at his part and revise TDS returns automatically your 26AS statement online will show correct interest amounts.

      Even after doing such exercise if your bank manager is not correcting the mistake on his part, you file your return of income ignoring such wrong or inflated values of income. There are all chances you get an intimation from the income tax department for paying the difference amount of tax between income you shown in ITR and income coming excess in Form 26AS. Don’t worry and file rectification u/s 154 showing the error done by the bank with attaching the written proof of letters sent to bank manager.

      Though this procedure is cumbersome and long hope but no other solution is I think available.

      Warm Regards.

  26. PARAMESWAR NAYAK CA(FINAL) says:

    Dear Mr Gautam joshi

    Whether form 16 is generated on line or only 16A is generated on line kindly clarify.

    Thanks
    Paramewar Nayak
    Jajpur Orissa

  27. RAKESH KUMAR JAIN says:

    Dear Mr. Gautam Joshi,

    What is the solution for the problem, if Deductor (Bank) enters correct value for TDS but wrong value of Interest Paid in 26AS?

    Thanks. RAKESH

    • Gautam Joshi says:

      Dear Mr. Jain,

      Banks at the end of the year, on request, issue a statement of total interest earned by the account holder. Do take this statement from the bank first and then write a letter to bank manager (DO NO FORGET TO TAKE AN ACKNOWLEDGEMENT OF THIS LETTER AND SAVE AN ACKNOWLEDGED COPY WITH YOU) about difference of income in interest statement given by bank and 26AS statement. I think this will force bank manager to correct 26AS statement. The moment bank manager change errors at his part and revise TDS returns automatically your 26AS statement online will show correct interest amounts.

      Warm Regards.

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