If you are filing Income Tax Return as an individual or as a company, there is something called Form 26AS which captures all the tax paid on your behalf by your employer or clients
What is Form 26AS?
Form 26AS is also known as the Tax Credit Statement. It is your annual consolidated tax statement with detailed information about the income you have earned, and taxes paid in a year. The details in this form are based on the information that the tax department has regarding your income and tax payments for the financial year.
You should have your Form 26AS at the time of filing tax returns as it has details of your tax deductors and collectors, TDS, and more, which you will need at the time of filing ITR.
Form 26AS consists of the various details namely Tax deducted by deductors, Tax collected by collectors, Advance taxes paid, Tax refund received (if any), Self-assessment tax payments, and Regular assessment tax.
What you must Check in Form 26AS before filing a tax return?
1. Compare FORM 26AS with FORM 16
Form 26AS is an annual consolidated credit statement issued with regards to your PAN. Therefore, it is important that the taxpayer should compare the Form 26AS with the Form 16 received from the employer.
If you are a salaried employee, your employer will provide Form 16 with detailed information about your salary, taxes deducted, and the deductions you have claimed. Just like taxpayers have a deadline for filing tax returns, employers also have a deadline for issuing Form 16 to the employees, which is generally May 31 every year.
To ensure that there are no errors in your ITR, you should always compare your Form 16 with Form 26AS. For instance, if the tax is not deposited by the employer or is deposited after the deadline, the tax deduction might show in Form 16 but not in Form 26AS. By comparing the two forms, you can ensure that both forms have similar and accurate details
2. Error in Form 26AS
In case if there is an error in your Form 26AS or if there is any mismatch of details between Form 26AS and Form 16, you will have to get it rectified through your tax deductor. For instance, if you are a salaried employee and there is an error regarding your TDS, you can inform your employer of the same.
Once the deductor revises the figures, the changes would then be made in your Form 26AS. You can then download the revised version of the form to file your tax returns. Make sure that you do get such errors rectified before filing ITR, as this could result in severe problems and even an inquiry by the IT department in the future.
3. Sync ITR with Form 26AS
A taxpayer has to ensure that the income tax return or ITR is in sync with Form 26AS. In case of any discrepancy, the income tax department may issue a tax notice to seek explanation for such discrepancies in the figures of income or TDS appearing in Form 26AS and income tax return. The IT department uses Form 26AS as the benchmark for all its analysis and verification and notices are issued accordingly if there is any discrepancy.
4. Mismatch in the Form 26AS
As far as the tax department is concerned, it will only consider the Form 26AS as its authentic document. If there is a mismatch in the amount of TDS claimed in income tax return and the amount of TDS appearing in Form 26AS, the assessing officer will provide credit only for that amount which appears in Form 26AS. That is why it is always to verify the Form 26AS before filing your ITR. Discrepancies could occur because you may have missed paying tax on some capital gains or your employer or client may have deducted tax but not deposited. In either case, you must immediately take it up and get it rectified.
Downloading and verification of Form 26AS must be done well before the filing of returns so that you have adequate time to take up the discrepancies with your employers or clients. Form 26As can be downloaded by logging into your e-filing account on the income tax department’s tax filing website. Thereafter, go to ‘My Account’ tab and select Form 26AS from the drop-down menu. The taxpayer will then be directed to TDS Reconciliation Analysis and Correction Enabling System (TRACES) website. Here you can just select the assessment year and format and view or download the Form 26AS. The Form 26AS can be viewed in HTML format and can be downloaded in text, excel or in PDF format.