Double-check your tax credits

By now, most of you would have received an email or postal intimation from the Income-Tax (IT) Department with respect to the return of income you filed for 2013-14. Called ‘Intimation under Sec 143(1)’, this statement shows both the computation of income-tax as done by you as well as that done by the department.

So did some of you get a nasty surprise when the intimation indicated more taxes due when you thought you had already paid all taxes correctly?

One of the most common reasons for this difference is the discrepancy in the segment called ‘Pre-paid taxes’.

For instance, while you could have claimed a certain amount as tax deducted at source (TDS) after doing the math, the department could have recognised a lower amount, leading to the demand. Or you may have paid your self-assessment tax but it may not have been reflected correctly. So how do you deal with this?

As a first step, look at your Form 16 (issued by your employer giving details of TDS on your salary) and Form 16A (issued by other institutions for TDS on interest paid to you).

Verify these amounts with that shown in your Form 26AS (statement of tax credit).

Form 26AS is generated by the IT department based on your PAN number. It contains details such as tax deducted on your behalf by your employer or the bank in which you have a fixed deposit, details of advance tax or self-assessment tax you paid and refunds you received from the IT department.

You can view your Form 26AS through your net banking account, or by registering on the TDS reconciliation website (TRACES), or by logging into your e-return filing account on the IT department website.

Differences come up because, while you claim TDS based on your Form 16 and Form 16A, Form 26AS picks up the TDS details based on what is uploaded by the deductor. So, if the deductor fails to file the TDS return on time, makes mistakes when filing, omits your details by oversight or gets your PAN wrong in his TDS return, the numbers may not match.

Mistakes can also arise when you are paying advance tax or self-assessment tax — you may, for instance, put in the wrong PAN or tax amount in the challan. Banks could also sometimes incorrectly furnish details of this tax you deposited to the department.

A third kind of error is when everything is in order as far as Form 16/16A and Form 26AS are concerned, but you make a mistake when filling in the TDS/advance-tax/self-assessment tax related details in your return.

If the mistake was made during advance-tax/self-assessment tax payment, you need to do a ‘challan correction’ at the bank where you made the payment.

If the error cropped up when making an entry in the return, you might then have to file a ‘Rectification Request’ for your return. This can be done online on the same website where you e-filed your return. Once you login, the Rectification Request is available under the ‘my account’ section.

If the issue is TDS related, you can request your employer or the bank/institution which deducted the amount to take corrective action. In all these cases, you can take the help of your auditor or your e-return filing intermediary. Most e-filing websites provide year-round advisory services for a fee.

Also use their help to write to the department explaining the reason for the mismatch in response to the intimation received.

In the first two cases, the onus of taking corrective action lies on you. But, when there is an error on the deductor’s part, you are a bit helpless. Once you intimate the deductor, you have no choice but to wait and hope the clarifications are carried out.

Fortunately, there are precedents from cases in various courts that a tax credit cannot be denied an assessee if the fault is with the deductor.

So the department may not adjust any refund that you may have asked for against the demand raised if the deductor is at fault.

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