Why should Form 26AS be checked before Filing Income Tax Return?

Ashish M. Shaji

10 Sep, 2022

In case you are filing Income Tax Return (ITR) as an individual or as a company, you should also be aware of Form 26AS, which captures all the tax paid on your behalf by your employer or clients. In this article, we shall discuss various reasons why this form should be checked before filing ITR.

Meaning of Form 26AS

This Form is also called the Tax Credit Statement. It is the annual consolidated tax statement with detailed information about the income earned by you and taxes paid in a year.

This form contains details that are based on the information that the tax department has about your income & tax payments for the financial year. It is worth mentioning here that one must have their Form 26AS when filing tax returns as it has details of the tax deductors and collectors, TDS, and more. It will be needed at the time of filing Income Tax Return.

Further, this Form consists of the various details such as Tax deducted by deductors, Tax collected by collectors, Advance taxes paid, Tax refund obtained (if any), Self-assessment tax payments, & Regular assessment tax.

What you must check in Form 26AS prior to filing ITR?

You must ensure the following:

• Compare the form with form 16

As stated earlier, Form 26AS is an annual consolidated credit statement issued with respect to your PAN. Hence, it is imperative that the taxpayer compare this form with the Form 16 received from the employer. If you are salaried employee, then your employer would provide Form 16 with detailed information regarding your salary, taxes deducted, and deductions claimed by you.

 As you would know that the taxpayers have a deadline for filing tax returns; likewise, employers also have deadline for issuing Form 16 to the employees, (May 31 every year). You should ensure that there are no errors in your ITR, and for that, you should always compare your Form 16 with 26AS.

For instance, if tax is not deposited by employer or is deposited after the due date, the tax deduction may show in Form 16 but not in Form 26AS. Thus you should compare both these forms and ensure they have similar and accurate details.

• Mismatch in Form 26AS

The tax department will only consider this form as its authentic document. In case of a mismatch in the amount of TDS claimed in the income tax return and the amount of TDS appearing in this Form, then the assessing officer will provide credit only for the amount which is shown in Form 26AS^[1].

Therefore it is advisable to verify the Form before filing your ITR. Discrepancies may occur because you may have missed paying tax on some capital gains, or your employer may have deducted tax but may not have deposited the same. In any case, you should get it rectified.

• Sync ITR

As a taxpayer, one should make sure that the income tax return or ITR is in sync with Form 26AS. If there is any discrepancy, the income tax department can serve a tax notice to seek explanation for such discrepancies in the income figures or TDS appearing in such Form and income tax return. The IT department uses this Form as the benchmark for all its analysis and verification, and accordingly, notices are issued, in case of any discrepancy.

Downloading and verification of Form

You can download and verify the Form well before filing of returns so that you have adequate time to take up discrepancies with your employers or clients. It can be done in following manner:

• The form can be downloaded by logging into the e-filing account on the tax filing website of the income tax department.
• After that, visit the ‘My Account’ tab and select Form 26AS from the drop-down menu.
• Then the taxpayer will be directed to the website of TDS Reconciliation Analysis and Correction Enabling System (TRACES), where you can select the assessment year and format and view or download the Form.
• The Form may be viewed in HTML format and can be downloaded in text, excel or in the PDF format.

Conclusion

It is advisable to verify the Form 26AS well in advance before the filing of returns so that you get enough time to take up the discrepancies with your employers or clients. In case of any query, consult a professional in this regard.

Read our article:Essentials points to note if you are filing ITR this Year