TDS Mismatch Intimation Notice | Causes, Solutions, and How to Respond Effectively

Tax Deducted at Source (TDS) is a mechanism through which the government collects taxes at the point of income generation. It is the responsibility of the deductor to deduct TDS and deposit it with the Income Tax Department. However, discrepancies between the TDS reported by the deductor and the taxpayer’s filed return can result in a TDS Mismatch Intimation Notice from the Income Tax Department.

If you have received a TDS mismatch notice, understanding the reason behind it and responding appropriately is essential to avoid penalties and legal consequences. This article provides a detailed overview of TDS mismatch notices, their causes, and the step-by-step process to resolve them.

What is a TDS Mismatch Intimation Notice?

A TDS Mismatch Intimation Notice is an official communication from the Income Tax Department indicating that there is a discrepancy between the TDS details provided in your Income Tax Return (ITR) and the TDS data available in Form 26AS or TRACES portal.

Form 26AS is a consolidated tax statement that reflects the TDS deducted by employers, banks, or other deductors against your PAN (Permanent Account Number). When the amounts declared in your ITR do not align with Form 26AS, the Income Tax Department issues a TDS mismatch notice under Section 143(1) of the Income Tax Act.

Importance of Form 26AS

Form 26AS plays a vital role in income tax filing as it serves as a detailed record of:

• TDS deducted on your income
• Advance tax payments
• Self-assessment tax payments
• Refunds issued by the Income Tax Department
• High-value transactions reported to the department

Always cross-check your ITR details with Form 26AS before filing to avoid mismatches.

Common Reasons for TDS Mismatch

Several factors can lead to a TDS mismatch, including:

1. Incorrect PAN Number: If the deductor mentions the wrong PAN while filing the TDS return, the TDS amount will not reflect in your Form 26AS.
2. Late Filing by Deductor: If the deductor delays filing the TDS return, the TDS amount will not appear in Form 26AS on time.
3. Mismatch in Amounts: The amount mentioned in your ITR may differ from the amount reported by the deductor.
4. Double Reporting: Sometimes, the same income is reported twice by the deductor, leading to inflated TDS amounts.
5. Non-Reporting by Deductor: If the deductor fails to file their TDS return altogether, the deducted amount will not reflect in Form 26AS.
6. Interest or Other Incomes: Interest earned from fixed deposits or other sources might not be declared properly.

How to Check for TDS Mismatch

To verify if there is a TDS mismatch:

1. Log in to the Income Tax e-filing portal: https://www.incometax.gov.in
2. Go to View Form 26AS under the “My Account” section.
3. Cross-check the TDS details in Form 26AS with your ITR.
4. Download the intimation notice from the e-filing portal under the e-Proceedings section.

How to Respond to TDS Mismatch Notice

If you receive a TDS mismatch notice, follow these steps to resolve the issue:

1. Identify the Discrepancy: Carefully review the notice and compare the details with your ITR and Form 26AS.
2. Contact the Deductor: If the discrepancy is due to the deductor’s mistake, request them to rectify the TDS return by filing a revised TDS return.
3. File Revised ITR (if required): If the error is from your side, file a revised Income Tax Return within the stipulated time.
4. Submit Response on Portal: Log in to the e-filing portal, go to e-Proceedings, select the pending notice, and submit your explanation with supporting documents.
5. Track the Status: Regularly check the e-filing portal for updates on the submitted response.

Documents Required for Response

• Copy of PAN card
• Form 26AS download
• ITR acknowledgment receipt
• TDS certificates (Form 16/16A)
• Communication with the deductor
• Proof of income (if applicable)

Consequences of Ignoring TDS Mismatch Notice

Failing to respond to a TDS mismatch notice can lead to:

• Additional tax demand
• Interest under Section 234B and 234C
• Penalty under Section 271(1)(c) for concealment of income
• Legal action for non-compliance
• Delay in income tax refunds

Tips to Avoid TDS Mismatch

• Always provide the correct PAN to your employer or deductor.
• Regularly check your Form 26AS during the financial year.
• Collect TDS certificates from all deductors.
• Report all sources of income in your ITR.
• File ITR before the due date.

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Conclusion

A TDS Mismatch Intimation Notice may seem daunting, but with the right understanding and prompt action, it can be resolved efficiently. Always verify your Form 26AS before filing your ITR and ensure that your deductors file accurate TDS returns. Proper communication and timely response to the Income Tax Department can help you avoid unnecessary penalties and maintain a clean tax record.

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