Why Do TDS Mismatches Occur?
Tax Deducted at Source (TDS) must reflect accurately in Form 26AS for the taxpayer to claim credit. However, mismatches are common due to:
- Incorrect PAN or TAN details
- Deductor fails to file or revise TDS returns
- Wrong challan details (CIN)
- TDS deposited but not linked correctly
- Late filing or non-updated Form 26AS
Such mismatches often lead to:
- Reduced or denied tax credit
- Demand notices from CPC
- Delayed or adjusted refunds
- Return processing under Section 143(1) with errors
Step-by-Step Guide to Resolve TDS Mismatch Using ITR-U
1. Compare Form 16/16A with Form 26AS
- Download Form 26AS from the income tax portal.
- Reconcile the TDS amounts with your certificates (Form 16 or 16A), especially if you have multiple deductors.
Use the “Tax Credit Mismatch” tool available on the portal to identify discrepancies.
2. Coordinate with the Deductor
If your Form 26AS doesn’t reflect the full TDS deducted:
- Ask the deductor (employer, client, bank) to file a revised TDS return (24Q/26Q/27Q).
- Ensure they correct PAN/TAN or challan details.
- Get a written acknowledgement of correction.
This is critical before proceeding with rectification.
3. File ITR-U with Correct Details
If you haven’t filed your return yet and notice a mismatch:
- File ITR-U (Updated Return) and report the correct TDS as per your Form 16/16A.
- The income tax portal allows you to manually add missing TDS entries in ITR forms.
- In the remarks section, clearly state:
“Deductor has initiated revised TDS return filing to correct mismatch.”
This helps prevent automatic demand generation later.
4. If Return Already Processed – Use Rectification Request (Section 154)
If your ITR (original or updated) has already been processed and:
- You receive a demand notice under Section 143(1), or
- Your TDS credit is reduced, or
- You received less refund than expected…
Then file a Rectification Request under Section 154:
- Log in to the e-Filing portal
- Go to: Services → Rectification → New Request
- Choose “Tax Credit Mismatch Correction”
- Upload updated Form 26AS (if available) and submit JSON
Important: No e-verification is required for rectification requests.
5. Respond to Outstanding Demand (If Applicable)
If you’ve received a demand notice and the mismatch is already corrected:
- Go to “e-File” → “Response to Outstanding Demand”
- Disagree with demand and quote rectification ARN number
- Attach supporting documents (updated 26AS or revised TDS confirmation)
CPC usually reprocesses such requests within 20–30 working days.
Pro Tips for CAs & Business Owners
- Reconcile Form 26AS quarterly, not just at return filing time.
- For large clients, use TRACES bulk PAN validation to avoid TDS errors.
- File ITR-U only if the original return is missed or flawed—not as a replacement for rectification.
- Maintain deductor follow-up records in case of legal inquiry or CPC clarification.
Need Help Fixing TDS Mismatches?
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