If you are a taxpayers, you need to check your Form 26AS to ensure the tax deducted at source (TDS) is reflected correctly in the income tax records. Form 26AS is a consolidated tax statement issued under Rule 31AB of the Income Tax Rules to PAN holders.
This statement will include details of Tax deducted at source (TDS) Tax collected at source (TCS) Advance tax, self-assessment tax, regular assessment tax etc deposited in a bank by taxpayers (PAN holders) Form 26AS will be prepared only for the financial year 2005-06 onwards.
It is an annual tax statement and is divided into three parts.
Part A
This displays details of TDS by each deductor who made a specified kind of payment to you. Details of the deductor (name and TAN) along with details of tax deducted such as section under which the deduction was made (for example, Section 192 for salary), date on which payment was effected, amount paid or credited, tax deducted from payments and deposited in the bank are included in this part.
Part B
It displays details of tax collected at source (TCS) by a seller of specified goods at the time these goods have been sold to you. Details similar to those displayed in Part A in respect of the seller and the tax collected will also be available.
Part C
This part displays details of income tax directly paid by you (such as advance tax and self-assessment tax), and details of the challan through which you have deposited this tax in the bank.
Every non-government entity that has deducted or collected tax at source is required to deposit it through a bank. Banks will upload this payment-related information to the TIN central system. These deductors are also required to file a quarterly statement to TIN, giving the details of their TDS.
The TIN central system will match the tax paymentrelated information in the statement with the tax receipt information from banks. If both of these match, TIN will create a comprehensive ledger for each PAN holder giving details of the tax deducted and collected.
Government deductors are required to deduct and collect tax at source, and deposit in the government account. In this case, however , the tax is transferred to the government account through a book-entry and not deposited through a bank. These deductors are also expected to file the TDS/TCS statement in electronic form to TIN.
As the system for the government accounts officers to upload the details of TDS/TCS deposits through book entry transfer is under implementation, the TDS/TCS details with respect to government deductors are not posted in Form 26AS at present.
Whenever you deposit advance tax or self-assessment tax directly in a bank, the bank will upload this information to the TIN central system three days after the cheque has been cleared.
This information will be posted in Part C of your Form 26AS
Credits available in the tax statement confirm that:
The tax deducted or collected by the deductor has been deposited in the account of the government The deductor or collector has filed the TDS statement accurately, giving details of the tax deducted or collected on your behalf The bank has furnished details of the tax deposited by you properly.
Proof of tax paid
In future, you will be able to use this consolidated tax statement (Form 26AS) as a proof of tax deducted or collected on your behalf, and the tax directly paid by you along with your income tax returns, after the requirement of submission of TDS certificates and tax payment challans along with income tax returns has been dispensed with by the Income Tax Department.
In addition, you can also view details of refunds received during a financial year.
If the PAN is not mentioned correctly in the TDS statement, the details of TDS cannot be posted on your Form 26AS.
Therefore, it is important to provide your PAN to all the entities who deduct or collect tax on your behalf.
In case there is something missing in the form, you should ask the deductor to file a correction statement with the income tax authorities.
Contacting and persuading the tax deductor to comply with the formalities is a task easier said than done. The deductor, more often, may not oblige. For instance, TDS may not have been paid, and subsequently, 26AS may not reflect the amount, resulting in denial of credit to the deductee, for absolutely no fault of his. Whatever be the reason for non-reflection of taxes paid in 26AS, the Department must grant credit, if the deductee submits the TDS certificate, or challan. The deductee cannot be expected to enforce the law. That is the job of the Dept. For a certain AY, my prepaid taxes totalled Rs.11 lakh. A refund of Rs.1050 was due to me. However, the Dept. has sent me a demand notice for Rs.13 lakh, because I have not been given credit for most of the advance tax payments and TDS. A few months back, I filed a rectification application, enclosing TDS certificates and challans, in original. The matter is still pending. Why should the deductee be penalised for defaults or breaches committed by the deductor?
Thank you for the write up. Almost all the tax payers are fully aware of this.
The main problem nagging the tax payers is:
If the TDS deducted by a deductor (especially Banks and Post Office) is not reflected in 26AS, what are the steps to be taken by a tax payer?
The Banks and the Post Office (especially TDS on Term Deposits and SSSavings Scheme) do not reply to the letters sent to them in this regard.
Though it is now prescribed that TDS certificates should be issued every quarter, the Banks and the Post Office do not follow this rule. The software for this purpose has not been updated – so the Banks say.
What is the remedy?