Latest news with #Tax2Win
Mint
25-06-2025
- Business
- Mint
ITR: How to spot and fix mismatches in Form 16 and Form 26AS before filing your tax return
ITR: For salaried individuals, Form 16 is a crucial document for filing the income tax return (ITR). As per the regulations, employers must file their e-TDS return for the January–March quarter by 31 May. After filing, they must issue Form 16 to employees within 15 days, making 15 June the final deadline for issuing Form 16. So, most employees would have received their Form 16 by now. 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.
&w=3840&q=100)
Business Standard
10-06-2025
- Business
- Business Standard
Tax filing for elderly: Don't overlook or incorrectly claim key deductions
The tax-filing season has begun. Senior citizens should take advantage of the deductions and exemptions available to them. Here's a concise guide to help them make the most of these benefits and file their tax returns accurately. Higher deduction limits Medical deductions: Senior citizens enjoy higher deductions on medical insurance premiums. The deduction limit is Rs 25,000 for those below 60 years. 'It is Rs 50,000 for senior citizens. And if they pay the premium for a dependent senior parent, they can claim an additional Rs 50,000,' says Deepak Kumar Jain, founder and chief executive officer (CEO), Tax benefits for preventive health checkups of up to Rs 5,000 can be claimed within the Rs 50,000 limit under Section 80D. 'If no medical policies have been taken for senior citizens, medical expenses incurred for them (paid other than in cash) can be claimed as a deduction under Section 80D,' says Abhishek Soni, co-founder, Tax2Win. Senior citizens can also claim up to Rs 1 lakh under Section 80DDB for specified diseases, compared to Rs 40,000 for those aged 59 and below. Deepak Kumar Jain informs that this applies to diseases like cancer, Parkinson's, and chronic renal failure. 'If a resident senior citizen, super senior citizen, or their dependant suffers from pre-specified diseases, they can claim a deduction for expenses incurred on treating those diseases,' says Soni. Interest income: Under Section 80TTB, senior and super senior citizens can claim a deduction of up to Rs 50,000 on interest income from savings accounts, fixed deposits, or recurring deposits held in banks and post offices. 'People in this category have retired from service and may not have a regular source of income other than interest from deposits. Hence, providing a higher deduction would enable them to have more disposable income for meeting needs such as health care,' says Sethuraman. Reverse mortgage proceeds are tax-free under Section 10(43). Senior citizens opting for the new tax regime must forgo many of these deductions. 'These include deductions from 80C to 80U, and the higher exemption limits. However, the rebate under Section 87A will still be available,' says Soni. Exempt from filing ITR For individuals aged 59 and below, the basic exemption limit is Rs 2.5 lakh. 'It is Rs 3 lakh for senior citizens and Rs 5 lakh for super senior citizens under the old tax regime. If their income is below this limit, they are not required to file ITR,' says Sudhakar Sethuraman, partner, Deloitte India. Section 194P exempts individuals aged 75 and above from filing tax returns. However, all these exempt categories may still have to file ITR if they meet certain conditions (see box). Those with only pension and interest income from the same bank are not required to file returns. Senior citizens with income below the taxable limit can submit Form 15H to ask banks not to deduct TDS (tax deduction at source). Deepak Kumar Jain suggests filing ITR even if no TDS is deducted. Resident senior citizens not having income from business or profession are exempt from paying advance tax. 'They can pay self-assessment tax at the end of the year instead,' says Deepak Kumar Jain. Points to remember Senior citizens must carefully report all sources of income. 'Include pension, rental income, and capital gains,' says Shubham Jain, associate director, Nangia Andersen. He observes that seniors often miss out on deductions specific to them or claim them incorrectly. Retain payment proof such as premium receipts for insurance, interest certificates, medical bills, and capital gains statements. Deductions should be claimed for payments made in the relevant financial year. 'Changes to the capital gain tax regime, especially regarding indexation benefits on the sale of land or a building introduced this year, should be kept in mind when reporting income,' says Shubham Jain. Seniors must accurately report income to avoid discrepancies with Form 26AS and the annual information statement (AIS). Review both these documents carefully before filing ITR to prevent triggering automated notices. 'Even small interest income, if skipped, can create a mismatch and delay your refund. The portal now highlights mismatches. Use that to your advantage,' says Shubham Jain. Seniors must choose the correct ITR form based on income type, such as pension, interest, rent, or capital gains. After filing, validate the return using an Aadhaar-enabled one-time password to avoid processing delays. Seniors must select the tax regime best suited to their income sources and deductions. Finally, a thorough review before submission can help avoid common errors. Mention bank details accurately to ensure timely refunds. File ITR even if income below exemption limit Made current account deposits above Rs 1 crore
