1. Income Tax notice for mismatch in Form 16 and Income Tax Return: Here’s what you should do

Income Tax notice for mismatch in Form 16 and Income Tax Return: Here’s what you should do

If you have claimed a refund of TDS by showing lesser income or claiming higher deduction in Income Tax Return (ITR), expect a notice from the Income Tax Department.

Updated: August 5, 2017 2:10 PM
 Income Tax notice, mismatch in Form 16 ITR, Income Tax Return, refund of TDS, Income Tax Department, Fake Investments Declarations This year the Income Tax department is sending tax notices on email to the taxpayers to explain the mismatch of particulars shown in Form 16 and ITR.

By Naveen Wadhwa

If you have claimed a refund of Tax Deducted at Source (TDS) by showing lesser income or claiming higher deduction in Income Tax Return (ITR), expect a notice from the Income Tax Department to reconcile the two tax documents – Form 16 and Income Tax Return.

This year the Income Tax department is sending tax notices on email to the taxpayers to explain the mismatch of particulars shown in Form 16 and ITR. This mismatch arise in the following two scenarios:

Scenario First: Investment proof not furnished to employer

When an employee had made investment in tax-saving instruments but he failed to furnish proof of investments to employer. It might happen that taxpayer was not able to claim genuine deductions for HRA or Section 80C due to his failure to furnish proof of rental payments, insurance premium, etc. to the employer. In this case, employees can show lesser income or claim higher deduction while filing return of income.

Scenario Second: Fake Investments Declarations

When employee had not made any investment in tax-saving instruments but claims deduction of the same in his Income-Tax Return. This is a wrong practice of showing lesser salary income or claiming fake deductions.

Who will get such notice?

Taxpayers who are claiming tax deduction in ITR Forms which are not mentioned in Form 16. This is the foremost reason to invite tax notices.

For instance, a taxpayer who has claimed deduction under Section 80C or for HRA directly in ITR without submitting any proof of such investments or payment of rent to the employer would get a notice from the Dept.

Watch this video:

How to avoid such tax notice?

Form 16 is issued by the employer to employee as a proof of tax deduction on the salary income. It has two parts (i.e., Part A and Part B). Part A includes general information such TAN & PAN of employer, summary of TDS, name and address of the employer and employee. While Part B contains vital information such as detailed breakup of salary, deductions allowed, relief claimed, tax payable or refundable, etc.

You can avoid such tax notice by considering following points:

# Salary income shown in your return should match with the salary income shown in Form 16

# Deductions claimed in ITR should match with the deductions shown in Form 16

# Declare all other income on which tax has been deducted by the payer (i.e., rental income, interest income, etc.)

# After filling all columns of ITR there should be nil tax demand.

# Declare all other in the Income-tax Return and pay taxes accordingly while filing the return.

Watch this video:

How to deal with such mismatch tax notice

There is no need to panic if you have valid reason for such a mismatch. You need to give reasons for such mismatch within 30 days from the date of receipt of notice. You need to follow these steps to give a reply to such notice:

1. Enter your login credentials at www.incometaxindiaefiling.gov.in.

2. Click on e-proceedings to see the notice issued under section 143(1) and submit your response.

3. On submitting response, you can see the differences between return filed and Form 16 or Form 26AS.

4. Analyse the reason for the mismatch between the return filed and Form 16.

5. Submit your agreement/disagreement to the addition and give reasons for disagreement.

6. You can select following reason for such mismatch:

# Deductions claimed in the return but not in form 16; or

# Exemption for allowances claimed in the return but not in form 16

This is the way how you can justify the reasons for mismatch and submit your response at income tax portal online without visiting the Income Tax Department.

(The author is DGM, Taxmann)

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  1. Madhavan Mohan
    Oct 12, 2017 at 6:10 pm
    my tax has been deducted but the form 16 did not show the deducted amount. when i approached the deduct er he said that the server was not uploading . but my tax deducted is deducted and the IT department ignoring the fact calculated the TAX TO BE PAID ..What should I do now.?
    Reply
    1. D
      Dr. C. S. Bal
      Aug 27, 2017 at 8:30 pm
      i have received notice u/s143(1)a for mismatch in form 16. Actually the deductor posted wrong figures in form 16 and same wrong figure refected in Traces form 16 now deductor has corrected the mistake and right figure as given by me in my original return were uploaded but for that procedure the deductor took long period( more that 30 days) so the tax payer could not respond to notice u/s 143 (1)a now I can not respond as that option is deleted from e -processing. now in form 16 figure is corrected.. the question is 1) what shall I do 2Can i revise my return u/ 139(5) but the problem is all my figures are same as in original return and probabaly revised can be filed if figures are different from original. Pls guide me
      Reply
      1. N
        naved
        Oct 18, 2017 at 2:16 pm
        i have a same problem. please email me at naveddehlvi yahoo if you have found any solution to this problem.
        Reply
        1. N
          naved
          Oct 18, 2017 at 2:17 pm
          i have a same problem. please email me at naveddehlvi yahoo if you have found any solution to this problem.
      2. C
        Chanchal babu
        Aug 19, 2017 at 9:17 am
        But it's asking mandatory TAN , whose TAN is to be entered it deductions are claimed for insurance, ppf and elss
        Reply
        1. S
          Sri Lakshmi
          Aug 9, 2017 at 12:17 pm
          Hi, I got a mail from CPC that there is a mismatch in my form 16 and in the returns i have submitted. I have to submit the response as "Disagree to the addition". Can you please let me know what should be filled in the below. 1. TAN : What is the TAN here? 2. Deduction made under section : What should I write here? 3. Amount paid/credited by deductor : What should I write here? 4. Nature of receipt as per the deductor : What should I write here? 5. Income/Gross Receipts as per return : What should I write here? 6. Head of Income/Schedule under which reported in return : What should I write here.
          Reply
          1. P
            PGUL
            Aug 9, 2017 at 4:11 pm
            I also have the same problem. Forgot to add savings account interest. In the first row, I have to agree. But in the second row, disagree as the bank interest has been added in the gross ry. In the third row, bank interest is added to the taxable income. The difference is the same in all rows (bank interest). But if I disagree in second and third row, explanation, as stated above by Sri Lakshmi, has to be given.
            Reply
          2. abc Def def
            Aug 4, 2017 at 10:30 pm
            I have received the same notice. I have filled the ITR as per Form 16 only and as per Form 16 my total income is 2.66 lac, and my Form 26 AS is also NIL as no TDS deducted. (I have submitted all the HRA, Insurance, Medial Proof submitted to my employed and based on that they have provided Form 16 which is also correct). But as per income tax records my taxable income is 32.74 lac, which is no where near to my figure. I have checked all my bank transactions but there is no such income or cash deposit. In this case how should i take up matter with Income tax. Please Guide.
            Reply
            1. T
              tarandip
              Aug 4, 2017 at 9:39 pm
              how to fill all the columns of the e proceeding response form after disagreement please give an example
              Reply
              1. Meenu Agrawal Gupta
                Aug 3, 2017 at 5:41 pm
                I did not submit my HRA receipts to the employer. But I deducted the HRA amount while filing tax return. When I am responding to the income tax notice, it is asking for TAN number. Not sure what to give there.
                Reply
                1. S
                  Shyam
                  Aug 3, 2017 at 1:12 pm
                  6. You can select following reason for such mismatch: # Deductions claimed in the return but not in form 16 or # Exemption for allowances claimed in the return but not in form 16 While selecting the above options in the eproceedings screen, it is asking for TAN number. Not sure how to get this done.
                  Reply
                  1. Partha Sarathi Gupta
                    Aug 3, 2017 at 11:32 am
                    Sir, Immobile property is purchasing.Which cost above 50Lkhs.So deducted 1 TDS from seller and deposited to TDS.Got form 16B.But while paying tax 0.10 paisa tax has been paid extra.For that same amount of payment and extra tax is filled in Part A2 of 26 AS, which income tax dept is considering as extra income. same data in part F and A2. No got notice from income tax.Kindly give solution
                    Reply
                    1. P
                      Parvez
                      Aug 7, 2017 at 10:00 pm
                      I am facing the same problem. While filing disagreement response system asks for TAN no. How should I submit the response.
                      Reply
                      1. S
                        Sangeetha
                        Aug 8, 2017 at 4:46 pm
                        I am facing same problem. Could you please let me know if you find a solution on my email - sangi.3 Thanks, Sangeetha
                        1. S
                          Sangeetha
                          Aug 8, 2017 at 4:49 pm
                          Hi both, I am also facing same problem. Could you please let me know if you find a solution how to put it in e-proceedings section of incometaxfilingindia ? PLease drop me an email on my account - sangi.3
                      2. P
                        PINAKI DAS
                        Aug 2, 2017 at 12:32 pm
                        Sir There is difference in taxable income as per Form 16 and my Return. Because Form 16 does not show 80G Deduction. I received a notice u/s 143(1)(a) which says as below: "The return for PAN AMEPD0569M, Assessment Year 2017-18 E-filing- Acknowledgement number 806651000160617 Dated 16-JUN-17 {AY, Acknowledgement Number and Date are obtained from the ITR} contains the errors/incorrect claims/ inconsistencies which attract adjustment(s), as specified u/s. 143(1)(a) of Income Tax Act, 1961, as annexed in Part-A [(i) to (vi), as applicable]. You are herewith afforded an opportunity to respond to the below mentioned adjustment(s) proposed u/s. 143(1)(a) within a period of 30 days (thirty days) from the date of issue of this communication. Please provide the required information or file a revised return, as applicable, through online mode. When i try to submit response it is asking for TAN No - but TAN No is not available for charitable ins ution - what to do.
                        Reply
                        1. S
                          smva
                          Aug 21, 2017 at 1:59 pm
                          did u get a resolution to this problem...I too have the same, and don't know how to rectify this...I called up IT helpline they are unable to resolve, and are saying contact a CA....
                          Reply
                        2. R
                          RG
                          Aug 1, 2017 at 3:27 pm
                          I got notice for discrepancy between IT return and Form 16, It is because Form 16 did not include PPF contribution. I have the details and document proof for the difference, but I am not able to submit this in the Income tax site e-proceedings section. Which submitting my response, it is asking for TAN number. As a individual ried tax payer, I don't have a TAN number. Please advice what should i do?
                          Reply
                          1. A
                            Anirudh
                            Aug 1, 2017 at 6:28 pm
                            I think you are confused. If you have ry income, and Form-16, then both has to match. In other words, in the Form-16 both the total ry, and the TDS effected will be shown. Therefore, you also have to show your ry income as shown in the Form-16. Thereafter, you can claim all the deductions, like PPF, 80G, etc. etc. in the return. Instead, if you straight away show your net income (instead of gross ry and then eligible deductions) by deducting the eligible deductions from the gross, then it will throw mismatch. That appears to be your case. Take steps to file revised return, if that is the case.
                            Reply
                          2. T
                            T v sankar rao
                            Aug 1, 2017 at 2:24 pm
                            Sir I have received such a notice under sec 143 in respect of deduction shown under 80g which is not forming part of form 16 What should i do
                            Reply
                            1. A
                              Anirudh
                              Aug 1, 2017 at 6:29 pm
                              Please indicate what does the notice exactly say. Only then it will be possible to give a solution.
                              Reply
                            2. H
                              Hemraj
                              Jul 31, 2017 at 9:59 pm
                              hemrajgurjar032
                              Reply
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