1. Tax Deducted at Source: How deductee can identify mismatch in credit status

Tax Deducted at Source: How deductee can identify mismatch in credit status

On verification of Form No 26AS, if there is any inconsistency between the TDS details as provided by the deductor and TDS details available with the government records, then the deductee should intimate the same to the deductor.

Updated: August 2, 2016 7:40 AM
The deductee is entitled to claim the credit of tax deducted by the deductor. The deductee should claim the correct amount of TDS as deducted by the deductor. (PTI) The deductee is entitled to claim the credit of tax deducted by the deductor. The deductee should claim the correct amount of TDS as deducted by the deductor. (PTI)

On verification of Form No 26AS, if there is any inconsistency between the TDS details as provided by the deductor and TDS details available with the government records, then the deductee should intimate the same to the deductor.

Mismatch in tax credit status of a deductee can occur because of the following reasons:

* Non-quoting of PAN or quoting of incorrect PAN of the deductee by the tax deductor in his quarterly TDS statement submitted to the Income Tax Department.

* Non-filing of statement by the deductor, taxpayer may check status of filing of TDS statement by the deductor through online on TDS/TCS credit at traces (www.tdscpc.gov.in).

Mismatch results in tax demand from income tax department/reduction in the amount of refund due to the taxpayer. A tax payer must avoid mismatch by viewing TDS/TCS credit and Tax Credit Statement (26AS) online (TRACES) to ensure that the statement has been filed by the deductor and ask the deductor to file correction statement quoting the correct PAN.

Deductee to claim the correct credit of TDS

The deductee is entitled to claim the credit of tax deducted by the deductor. The deductee should claim the correct amount of TDS as deducted by the deductor. To claim the credit of TDS, the deductee has to mention the details of TDS in his return of income. Deductee should take due care to quote the correct TDS certificate number and TDS details while filing the return of income. If any incorrect detail is provided by the deductee, then tax credit discrepancy will arise at the time of processing the return of income and same can cause problem in processing the return of income.

Deductee should furnish his permanent account number (PAN) to the deductor. Every deductee should obtain a valid PAN (if not obtained) and should furnish the correct PAN to the deductor. If incorrect PAN is provided, the tax deducted may be credited to incorrect account. Failure to apply for PAN or quote correct PAN by the deductee to the deductor may result in levy of penalty of R10,000.

Certificate of deduction or Form No. 15G/15H

If any deductee has obtained lower deduction certificate from the Assessing Officer or wants to furnish Form No. 15G/15H for non-deduction of tax in prescribed case, he should furnish the certificate/form to the deductor well in advance. No certificate for deduction at lower/rate or nil deduction of income tax shall. However, be granted unless the application contains the PAN of the applicant.

Every deductee must preserve the TDS certificate issued by the deductor. TDS certificate in respect of TDS on payments other than salary is issued on quarterly basis and in respect of TDS on salary on annual basis. If the TDS certificate is lost, the deductee can request for duplicate TDS certificate. The deductee can verify the TDS certificate online on the TRACES website www.tdscpc.gov.in.

The deductee can cross-check the TDS credit, as reflected in TDS certificate available in his account by viewing the tax credit status online from Form No 26AS, which is an Annual Tax Statement containing the details of tax deducted/collected by various deductors. Income-tax refund details, high value transactions and transactions pertaining to TDS on sale on immovable property during the financial year. Every deductee should check the tax credit available in his account (i.e. in Form 26AS). This enables him to cross check the TDS details provided to him by the deductor with the TDS details available with the government.

Extracted from Taxguru.com

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