While Filing our ITR, we tend to ignore the details captured in Form 26AS. It contains details about the tax deducted on your behalf by various institutions. It is relevant for you and you should care about it
The due date for filing the income tax return (ITR) is approaching. The ITR filing gives a legal sanction to your income. One needs to put together income and investments to calculate how much one’s owes to the taxman. However, one must refer to the Form 26AS before filing the tax return.
What is Form 26AS?
Form 26AS is a statement of tax credit generated by the Income Tax Department based on your PAN number for every financial year. Form 26AS contains details about the tax deducted on your behalf by employers, the bank/institution in which you have an investment and sale/purchase or rent of the immovable property.
The form also contains the details of advance tax or self-assessment tax paid by you, refunds by the I-T department as well as high-value transactions that you have entered into during the course of the year. This form can be viewed by you through your net banking account or by registering on the TDS reconciliation website named TRACES. It can be accessed by logging into your e-return filing account on the tax department’s website.
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How is it relevant for you?
While filing the tax return, we tend to ignore the details captured in Form 26AS. But, the taxman uses form 26AS as his ready-reckoner to pick up details related to your incomes, investments, purchases and tax liability for the year. The tax department matches the details in your Form 26AS with what you have declared in the tax return in order to calculate how much you owe. It is vital that both the documents are in conformity.
However, the chances of both being in sync are very less. The errors and omissions do creep in. For example, Form 26AS picks up the TDS details on our incomes based on what is uploaded by the deductor. So, if the deductor fails to file the TDS return on time, makes mistakes when filing, omits the details or get your PAN wrong in the return, 26AS details may not match with the TDS credit you have claimed in the return.
Similarly, mistakes can also arise when you are paying advance tax or self-assessment tax. At the time of paying the tax, mistakes arise when you fill in the wrong amount in the challan or when banks incorrectly furnish details of tax deposited by you. There can be instances when you may forget to include or omit certain incomes in your returns, for which taxes have been captured in Form 26AS.
Why should you care about it?
Problems can arise at the time of processing of return if there is a mismatch between the numbers in the return and Form 26AS. After you file your return, the Income-Tax Department sends you an email intimation regarding the income-tax processing. It is titled “intimation under section 143(1)”, the statement shows the computation of income-tax done by you and the department side by side. Any discrepancy can result in the department asking for more taxes according to their calculations. You are expected to pay the entire demand within 30 days of the receipt of this intimation. As an assessee, you need to write to the department giving an explanation about the reasons for taking note of the mismatch caused due to Form 26AS. Any mistake owing to the payment of advance-tax/ self-assessment tax payment needs to be corrected at the bank where you had made the payment. If the issue is TDS related and the fault is not yours, you can request your employer or the bank/institution which deducted the amount to take the corrective action. If you have missed out any income for which tax details have been captured, then you need to revise the return.
The Form 26AS makes sure that there is no room for error, and if there is one, the same is corrected.