ITR: How to spot and fix mismatches in Form 16 and Form 26AS before filing your tax return
Form 16 is a certificate issued by employers that furnishes details about the TDS (Tax Deducted At Source). However, Form 26AS also mentions TDS information. So, what exactly is the difference between the two?
Form 16 is a TDS certificate issued by the employer and mentions details regarding TDS deduction on salary. On the other hand, Form 26AS is issued by the government and gives broader details that encompass TDS deducted at multiple sources of income and TCS (Tax Collected At Source) collected by different collectors linked to your PAN.
FORM 16 FORM 26AS Issued by the employer Issued by the Income Tax Department Shows details of TDS deducted by the employer
Provides details on- Tax Deducted at Source (TDS)
Tax Collected at Source (TCS)
Advance Tax / Self-Assessment Tax
Income Tax Refund
TDS Defaults
Specified Financial Transactions
Verify your PAN number in both documents. Verify and match the salary income in Form 16 and Form 26AS. Check if the TDS deducted in Form 16 matches the TDS details in Form 26AS.
'Form 16 shows payments from employers under different heads and the TDS deducted against your salary. For instance, if you are in the old tax regime and you get LTA, HRA, or any other exempt item, you must verify whether it is reflected in the Form 16. If you haven't submitted documents like rent agreement or rent receipts to the finance department of your company, they will deduct higher TDS. Similarly, all the exempt items like health insurance, tuition fees etc. should be reflected accurately. If you have submitted the documents to the employer and still excess TDS is deducted, you must get in touch with your employer. The employer will have to revise its annual TDS return. If you have switched jobs, look out for the tax treatment on items like gratuities or leave encashment,' said Balwant Jain, tax & investment expert.
'In Form 26AS, ensure that TDS by the employer, TDS on bank interest, and advance/self-assessment tax are reflecting properly. In Form 16, verify that your PAN, employer details, salary breakup, deductions, TDS and taxable salary are showing properly. Also, combine Form 16 from multiple employers, if any, to avoid income mismatch at the time of ITR filing. This ensures correct tax credit and accurate return filing,' said Abhishek Soni, CEO, Tax2Win.
If both documents differ in the information, the employee should raise it with the employer or deductor responsible for deducting TDS from their income. "A mismatch in Form 26AS can occur due to various reasons. If the deductor quotes an incorrect PAN, the TDS won't reflect—this requires the deductor to revise the TDS return. Sometimes, TDS is deducted but not deposited to the government; in such cases, the deductor must pay and update the return. In case the amount of salary is not reported correctly by the employer, the wrong amount will reflect in 26AS. Contact your employer to rectify the same," Soni explained.
While filing your income tax return, matching both the documents ensures there's no under-reporting or overstating of income. Hence, matching Form 16 with Form 26AS is crucial to file your return accurately. In case of a discrepancy, the taxpayer may receive a defective return notice from the income tax department.
"It is important to match Form 16 and Form 26AS to ensure accurate reporting of income and TDS while filing your income tax return. Form 16 shows tax deducted by your employer, while Form 26AS reflects the actual tax deposited with the government. Any mismatch may result in the denial of TDS credit, incorrect tax liability, or a delay in the refund. Matching both forms helps identify errors, under-reported income, or duplicate entries and prevents notices, scrutiny, or penalties from the Income Tax Department," said Soni.
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