TDS or Tax Deducted at Source is a direct tax mechanism introduced with the aim of collecting tax from the very source of income. The government uses TDS to minimize tax evasion by taxing the income partially or wholly at the time it is generated rather than at a later date. As per this concept, the person who is liable to make payment of specified nature to another person, i.e., deductee, shall deduct tax at the source and remit the same to the Central Government’s account. The deductee, from whose income tax has been deducted at the source, would be entitled to get credit for the amount so deducted based on Form 26AS or TDS certificate issued by the deductor.
It is important to verify whether the tax deducted from your salary has been deposited by your employer in the government’s account. Failure to deposit the amount can lead to legal consequences.
Reason for Checking the TDS
If the tax deducted from your salary is not deposited with the department, a discrepancy will arise between your Form 16 and Form 26AS. This mismatch may result in a demand notice being issued by the department for the payment of the difference between the amount reflected in your Form 16 (salary) and the amount reflected in Form 26AS (PAN details).
Due Date for Employer to File TDS Return
Company has to file TDS returns on a quarterly basis. The last date of filing of TDS Returns for the company is one month after the end of the quarter. This is how for quarter ending June 30, the due date for filing return is July 31. However, the due date for the quarter ending March 31st is May 31st and therefore, Form 26AS will be updated after May 31st.
FORM 26AS
Form 26AS is an annual tax statement that comprises a person’s tax information subject to TDS. It can be downloaded from the TRACES website, which is accessible through the Income Tax Department website. Form 26AS can be accessed through net banking or by entering the password (date of birth of the user).
This form provides essential details such as the name of the deductee, PAN, details of the deductor, amount of TDS, the amount of TDS deposited, and other relevant information. All official messages related to the Income Tax Department are sent to the user’s registered mobile number. Therefore, it is crucial to provide the correct mobile number during registration to receive timely notifications.
Things to check after Form 26AS is downloaded
- Check for mismatches/errors: After downloading the correct Form 26AS, the user must check that the details of deductee, his PAN, details of deductor, amount of TDS, amount of TDS deposited, etc. If there is any mismatch, then the user must be prompt in getting the mistakes rectified and avoid the demand notice from the Income Tax Department.
- Check the details of PAN: The user must ensure that the details written on his PAN – name, father’s name, number and date of birth of birth are correct. If the details of PAN will be wrong, then the TDS deducted will not reflect in Form 26AS of the user.
- Digital signature should be verified: If the certificate is required to be verified, then the user must verify that there is a check on the certificate. Unverified certificate will have a question mark on it.
- Tally the amounts in Form 16 and Form 26AS: The user must tally each and every amount of the tax that has been deducted from his salary by the employer. It is the duty of a taxpayer to verify whether the deductor has deducted tax on each transaction on which it was supposed to be deducted. He must also check that the TDS mentioned in form 16/16A is reflecting in Form 26AS.