Know how to reconciliate TDS

Taxes | admin | August 28, 2011 at 11:10 am

There are incomes, such as salary, and interest from bonds and fixed deposits, on which tax is deducted by the payer of income. Such a deduction is called Tax Deducted at Source or TDS. At the time of filing returns, the receiver of the income can claim credit for the tax so deducted.

The Tax Information Network (TIN) is responsible for collating the amount of TDS deducted against each PAN through the returns filed by the tax deductors.

The Income Tax Department gives credit for TDS on the basis of this data. In some cases, there may be a discrepancy between the TDS shown by the TIN records and the amount actually deducted from income.

The assessee stands to lose on credit for the tax paid if the TDS is not fully reflected in the TIN records. Hence, it is essential for the assessee to reconcile the two periodically. Here's how to do this.

Form

Go through the Form 26AS, which is a consolidated annual tax statement that includes TDS in Part A of the form. The details of the deductor, along with the nature and date of payment, are available.

Access

A PAN holder can go through Form 26AS online by registering with TIN and using the user ID, PAN and password to log in. The user can use the link, https://onlineservices.tin.nsdl.com/TIN/JSP/security/PanLogin.jsp.

Reconciling TDS and Form 26

The taxpayer must match the amounts shown in the tax deduction certificates received from the deductors at the end of every quarter with the amount reflected in Form 26AS.

Error correction

In case a taxpayer finds errors or omissions, the deductor must correct the error by using the prescribed correction statement.

Points to note

Time for reconciliation: This should ideally be done soon after the end of every quarter so that corrective action, if required, can be taken. The TIN database and Form 26AS are updated after 15 days of the end of the quarter.

Error notification: If the deductor does not make the corrections as required, the PAN holder can contact TIN, National Securities Depository Ltd, at tininfo@nsdl.co.in.