If your TDS is deducted but not deposited with the government, you must download Form 26AS from the Income Tax e-filing portal. This statement from the department shows all TDS deducted on your behalf. You must compare it with your payment slips or TDS certificates to verify whether the deductions match.
TDS refers to tax deducted at source. This is the tax that the employer deducts from an employee’s salary before transferring the money. The TDS is then submitted to the government with the employer’s Tax Account Number (TAN). This TDS reflects against your PAN (Permanent Account Number) and shows up when you file your income tax return (ITR).
Unfortunately, sometimes, things do not go as planned. There might be instances where the deductor, despite taking the TDS from your salary, does not deposit it with the government within the required timeframe. Worse, they might even submit TDS returns with an incorrect PAN number. In such situations, taking immediate action is crucial.
What are the Consequences If TDS is not Deducted?
The TDS that the employer deducts shows up on your Form 26AS. When the employer deducts tax from your salary, they also issue a TDS certificate or Form 16/ Form 16A. You can compare the information on Form 16 with Form 26AS to check if the amounts match. If there are any discrepancies, they will be reflected here. You can check your salary slips if your employer does not issue a Form 16.
If TDS (Tax Deducted at Source) is not deducted as required by law, it can lead to various consequences for both the deductor (the entity responsible for deducting TDS) and the deductee (the person from whose income TDS should have been deducted). These consequences include penalties on deductors for failure to deduct TDS or for deducting an amount less than required. Expenses on which TDS is required but not deducted may be disallowed as deductible expenses while calculating the income of the deductor. This can impact the deductor’s overall financial position.
What are the Reasons Behind Discrepancies in Form 16 and Form 26AS?
There could be discrepancies in Form 16 and Form 26AS for the following reasons:
- The employer may have forgotten to deposit the TDS within the stipulated time.
- The PAN entered could be incorrect.
- The TAN entered could be incorrect.
- The system could create a technical error.
- The assessment year could be entered incorrectly.
What to Do If the TDS Amount Does not Match?
A mismatch between the expected TDS amount and the actual amount reflected in your records can be a concern. Here is what you can do in such situations:
Identify the Discrepancy
- Compare Form 26AS and TDS Certificate: Download Form 26AS from the e-filing portal and compare it with your TDS certificates provided by the deductor (e.g., employer, bank). Look for discrepancies in amount, date, or tax head.
- Check your payment slips: Verify if the deducted amount on your salary slips or other income statements matches the TDS certificate and Form 26AS.
Reach out to the Deductor
- Contact the entity responsible for deducting your TDS: Inform them about the discrepancy and request an explanation. They might have made a mistake in calculation, filing, or deposit timing.
- Gather evidence: Have your payment slips, TDS certificates, and income statements ready for reference during the communication.
Take Corrective Action
- If the Deductor Acknowledges the Error: They should rectify it by filing revised TDS returns and depositing the difference. Monitor your Form 26AS for the update, which may take 30-45 days.
- If the Deductor Disagrees: Try to resolve the issue amicably by providing evidence and discussing the discrepancy.
- If Resolution Fails: Consider involving relevant authorities:
- File a complaint with the Assessing Officer: Explain the situation and submit supporting documents for investigation.
- Seek legal advice: Consult a tax advisor or lawyer for expert guidance on pursuing your claim in complex cases.
Who Pays the Tax if TDS is not Deposited with the Government?
In case of any TDS dues, the liability to pay the tax falls on the employer and not the employee. Since the tax is deducted from the source before the payment reaches the employee, the employer must file a TDS return on time.
The Central Board of Direct Taxes (CBDT) can also penalise the employer for not depositing the government’s tax on time.
What can Employees do on their Part?
Employees should check their Form 26AS every quarter to review whether the TDS amount is being correctly shown. If they find any issues, they should bring it to their employer’s notice at the earliest.
They can keep a copy of their salary slips, bank account statements, etc., that reflects the TDS amount as proof. It also helps to remind their employer to file TDS returns on time to avoid hassles later.
Way Forward
Understanding and verifying your TDS is crucial not just for smooth tax filing but also for protecting yourself from potential liability. By being proactive, informed, and vigilant, you can ensure your employer submits your TDS accurately and on time. Remember, your tax compliance does not depend solely on deductions, so stay informed about your overall tax obligations and file your ITR accurately. Do not hesitate to seek clarification or professional guidance if any discrepancies arise. Empowered with knowledge and awareness, you can confidently and easily navigate the world of taxes.
Key Takeaways
- TDS is the tax deducted by the employer from an employee’s salary before transferring the money.
- TDS contributions are visible in Form 26AS, facilitating a smoother tax filing process.
- Discrepancies while TDS filing may arise for various reasons, including forgetfulness, incorrect PAN or TAN entry, technical errors, or incorrect assessment year.
- One can identify discrepancies by comparing Form 26AS, TDS certificates, and payment slips.
- Employees should regularly check Form 26AS for accuracy and maintain records like salary slips and bank statements as proof.
