How to check if employer is depositing your TDS with the government?

what is TDS?

TDS stands for Tax Deducted at Source. Tax Deducted at Source is a direct tax which was introduced with an aim to collect the tax from the very source of income. The government uses TDS as a mechanism to collect tax in order to minimise tax evasion by taxing the income (partially or wholly) at the time it is generated rather than at a later date. As per this concept, the deductor who is liable to make payment of specified nature to other person i.e., deductee, shall deduct tax at a source and remit the same in the account of the Central Government. The deductee from whose income tax has been deducted at source would be entitled to get credit of the amount so deducted on the basis of Form 26AS or TDS certificate issued by the deductor.

Now the question arises, whether you have checked that the tax which has been deducted from your salary has been deposited by your employer in the government’s account. If the employer has not deposited such amount, then it can lead you into litigation!

Why should you check that the tax has been deposited in government’s account?

When the tax is deducted from your salary and the same is not deposited with the department, then there will be a mismatch in your Form 16 and Form 26AS. Due to this mismatch, a demand notice shall be sent by the department for the payment of the difference reflected in your Form 16 (salary) and Form 26 (reflected in PAN).

When should company file TDS Returns?

Company has to file TDS returns on a quarterly basis. The last date of filing of TDS Returns for the company is one month after the end of the quarter. This is how for quarter ending June 30, the due date for filing return is July 31. However, the due date for the quarter ending March 31st is May 31st and therefore, Form 26AS will be updated after May 31st.

What is Form 26AS?

Form 26AS is a form which comprises of annual tax statement of a person subjected to TDS. This form can be downloaded from TRACES website via the website of Income Tax Department. Form 26AS can be accessed via net banking or by filing the password (date of birth of user). This form provides details such as name of the deductee, PAN, details of deductor, amount of TDS, the amount of TDS deposited and so on. All the official messages related to income tax department are sent to the user to its registered mobile number. Therefore, it is essential that the user must put his correct mobile number.

Things to check after Form 26AS is downloaded:

  • Check for mismatches/errors: After downloading the correct Form 26AS, the user must check that the details of deductee, his PAN, details of deductor, amount of TDS, amount of TDS deposited, etc. If there is any mismatch, then the user must be prompt in getting the mistakes rectified and avoid the demand notice from the Income Tax Department.
  • Check the details of PAN: The user must ensure that the details written on his PAN – name, father’s name, number and date of birth of birth are correct. If the details of PAN will be wrong, then the TDS deducted will not reflect in Form 26AS of the user. 
  • Digital signature should be verified: If the certificate is required to be verified, then the user must verify that there is a check on the certificate. Unverified certificate will have a question mark on it.
  • Tally the amounts in Form 16 and Form 26AS: The user must tally each and every amount of the tax that has been deducted from his salary by the employer. It is the duty of a taxpayer to verify whether the deductor has deducted tax on each transaction on which it was supposed to be deducted. He must also check that the TDS mentioned in form 16/16A is reflecting in Form 26AS. In case the TDS shown in your TDS certificate is not reflecting in your Form 26AS it would imply that although the deductor has deducted the tax on your behalf but the TDS has not been deposited / has not reached the income tax department. In case of any discrepancy.

To conclude, one should keep checking his Form 26AS and ensure that the amount that has been deducted from his salary is same as stated in F0rm 26AS. Paying taxes is not enough, you have to check also that the amount has reached at its right place!

Be a responsible taxpayer! Check and pay your due taxes.

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