ITR Filing FY2024: The Income Tax filing is just a month away and most salaried taxpayers have got into action after getting their Form 16 last week. Employers deducting tax under Sections 192-195 must provide employees with a certificate detailing tax deduction, applicable rate, deducted amount, and other relevant information. This certificate, commonly referred to as Form 16, is mandated by income tax laws.
Form 16 is essential for ITR filing as it pre-fills income and TDS details. Form 16 is a detailed summary of TDS deductions throughout the fiscal year.
It is to be noted that Form 26AS is the annual tax statement that provides taxpayers access to the tax deduction/tax collection details and income. It contains comprehensive information related to salary income, business and professional receipts, interest income earned on bank deposits, etc along with the respective tax deduction/collection details.
These details are created from tax deductions/collected data submitted quarterly to the Income Tax Department by employers, tax deductors, collectors, and banking institutions.
Details mismatch in Form 16 and Form 26AS
Taxpayers can find that the TDS and income details mentioned in their Form 16 do not match with the pre-filled ITR form at the time of income tax return (ITR) filing. A mismatch can result in complications and alerts from tax authorities, underscoring the importance of taxpayers reconciling these records before submitting their income tax returns.
Failure to rectify these errors may result in a defective return notice under Section 139(9) of the I-T Act. Notices are sent via email or post and can also be viewed on the e-filing portal.
Note these points:
1. Wrong Form 16 data
Employers strive to ensure accuracy in Form 16 despite precautions and professional assistance, errors like miscalculations, incomplete details, or omissions can still occur.
2. Delay in Form 16 data upload
A delay in uploading Form 16 data to the Income Tax Department’s systems can cause a temporary data mismatch, leading to delays in processing ITR forms.
3. Delay in salaries
Companies typically send salaries and pay taxes to the Income Tax Department with minimal delay. However, delays can occur due to various reasons. When there’s a delay in TDS deposit, it also leads to a delay in data update by the tax department.
4. Faulty Form 16 format
In case your employer selects an incorrect format for Form 16, it may lead to data inconsistencies between the forms as pre-filling might not align with the data.
5. All details not included
Taxpayer’s deductions for investments or medical expenses not in Form 16 may not be in the pre-filled ITR.
What can be done to address the mismatch
One should closely cross-check the information in Form 16 and the pre-filled parts of the ITR. The company’s name, address, PAN, and TAN should all be thoroughly checked and verified on Form 16 and in pre-filled ITR paperwork. If you see any difference, you must compute all of your significant outlays and investments.
While certain incomes, such as HRA, agri income, and certain allowances, are completely exempt from tax responsibility, investments like PPF, NPS, ELSS, insurance, and ULIPs benefit from tax deductions. If there is a discrepancy in the data, provide the updated information after computing precise figures and submit a request to have a new Form 16 issued.