How to Fix Mismatch in Form 16 and Form 26AS Before Filing Your Tax Return

When Form 16 doesn't match with Form 26AS, don’t panic—verify, rectify, and protect your peace of mind.

Filing your Income Tax Return (ITR) accurately depends on one crucial step: ensuring there's no mismatch between Form 16 (issued by your employer) and Form 26AS (consolidated tax credit statement maintained by the Income Tax Department).

If you're puzzled why your TDS (Tax Deducted at Source) doesn't match between these two documents, you're not alone. This blog will help you understand, verify, and resolve these discrepancies in a step-by-step and legally informed manner.

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What is Form 16?

Form 16 is a TDS certificate issued by your employer. It consists of:

• Part A: Details of TDS deducted and deposited with the government (along with PAN, TAN, period of employment, etc.)
• Part B: Salary breakup, deductions under Chapter VI-A, taxable salary, and tax payable/refunded

Deadline for Employers: Employers are required to file their e-TDS return for Jan–Mar quarter by May 31, and issue Form 16 by June 15. So you must have received your Form 16.

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What is Form 26AS?

Form 26AS is a consolidated annual tax statement issued by the Income Tax Department. It includes:

• TDS on salary (by employer)
• TDS on bank interest (by banks)
• TDS/TCS from other parties (clients, tenants, etc.)
• Advance tax / Self-assessment tax paid
• Refunds issued
• High-value transactions (mutual fund investments, property purchases, etc.)

You can download your Form 26AS via:

• Income Tax Portal

• Guide to Download Form 26AS

• Income Tax e-filing portal (under "View Form 26AS")

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Difference Between Form 16 and Form 26AS

Criteria	Form 16	Form 26AS
Issued by	Employer	Income Tax Department (via TRACES)
Focus	Salary income only	All incomes where TDS/TCS is involved
Usage	For salary income reporting	For cross-verifying all taxes deducted and paid
Format	Certificate in two parts	Consolidated ledger-like format

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Why Do Mismatches Happen?

Mismatches can arise due to:

• Employer/deductor quoting incorrect PAN
• Delay in filing TDS return (quarterly)
• TDS deducted but not deposited
• Salary reported incorrectly
• Errors in challan details (CIN, TAN, date)
• TDS claimed in ITR but not reflected in 26AS
• Multiple employers in a year but one Form 16 missing

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Real Case Study: ITAT Judgment

In Ramesh A. Marand v. ACIT-7(1), Ahmedabad (ITA No. 2887/AHD/2017)

One of the most significant real-life examples of a TDS mismatch causing tax trouble is the case of Shri Ramesh A. Marand vs. ACIT before the Income Tax Appellate Tribunal (ITAT), Ahmedabad, in 2019.

Case Facts:

• Assessee: Shri Ramesh A. Marand, employee of Sparsh Technologies
• Assessment Year: 2014–15
• Issue: Mismatch in income and TDS between ITR, Form 16, Form 26AS, and salary bank credits
• Reason: Ongoing dispute with employer

What Went Wrong?

• The taxpayer had a dispute with his employer and didn’t initially receive Form 16.
• Later, two conflicting Form 16s emerged:
  • One obtained by the taxpayer unofficially
  • One submitted by the employer to the AO
• The Assessing Officer (AO) accused the taxpayer of submitting a false Form 16, and added:
  • ₹10.3 lakhs (difference in allowances)
  • ₹1.2 lakhs (difference in gross salary)

What Did the Taxpayer Argue?

• He claimed harassment by employer post-resignation.
• His bank salary credits didn’t match what the employer claimed.
• The employer refused to provide full salary/TDS breakup.
• He requested cross-examination of employer data.

Tribunal’s View (ITAT Ahmedabad)

The ITAT emphasized the principle of natural justice:

• AO should have allowed cross-examination under Section 131
• Employer’s salary and TDS claims should be cross-verified with:
  • Bank statements
  • Payroll records
  • Form 26AS
• The right to be heard (“audi alteram partem”) was violated.

Final Verdict:

• The case was sent back to AO for proper re-examination.
• AO must allow cross-examination and collect actual salary records from the employer.
• Only then can additions be confirmed or dropped.

Outcome: The appeal was allowed for statistical purposes, giving the taxpayer a fair chance.

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Lessons from the Case:

1. Always Match Form 16 with Form 26AS
   Ensure that what your employer reports in TDS returns matches what appears in your Form 26AS. If not, raise the issue before filing your return.

2. Keep All Proofs
   Maintain:

   • Salary slips
   • Bank statements
   • TDS certificates from all employers

3. Use Your Right to Be Heard
   If there's a genuine dispute or mistake by employer/deductor, you have the right to contest, and ask for a hearing, cross-examination, or reassessment.

Lesson: Even when your employer is uncooperative, you can still defend your claim—just be sure to back it with evidence like bank statements and salary slips.

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How to Fix a Mismatch

1. Check Both Documents Thoroughly

• Form 16: Ensure PAN, TAN, salary breakup, deductions, and tax are correctly shown
• Form 26AS: Ensure all TDS entries match—especially for bank interest, freelancing/consulting income, etc.

2. If There's a Mismatch:

Case	Action
TDS not showing in 26AS	Ask employer to file revised TDS return (with correct PAN/amounts)
Incorrect figures in Form 16	Ask employer for corrected Form 16 or issue a clarification on company letterhead
Salary or TDS differs due to multiple employers	Use both Form 16s and cross-check 26AS total TDS
Advance/Self-assessment tax not showing	Check challan details (CIN, date, amount) and correct in ITR manually

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Tools to Help You

• TRACES Portal for TDS Statements
• Income Tax Portal for Form 26AS and AIS

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What If You've Already Filed the Return?

Option 1: Revised Return (if no notice received yet)

• Go to Income Tax Portal
• Select: File > Income Tax Return > Revised

Option 2: Rectification Request (if you received intimation under Section 143(1))

• Log in to e-filing portal
• Prepare reply and attach all tds and salary proof.
• Select appropriate reason: TDS mismatch, incorrect tax credit, etc.

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Consequences of Ignoring Mismatch

• ITR rejection
• Notice under section 139(9) for defective return
• Tax credit disallowed: you'll pay extra tax
• Refund delayed or denied
• Scrutiny, penalty, or legal proceedings if unaddressed

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Proactive Steps Before Filing

• Cross-verify 26AS, AIS (Annual Information Statement), and Form 16/16A
• Reconcile salary credited in bank statements with what is shown in Form 16
• Ask your employer to revise the TDS return if PAN was wrongly quoted
• Retain all proofs: salary slips, bank statements, correspondence with employer

Still Confused?

Contact Multigyan team to resolve your queries and help you to submit reply if you have received notice due to TDS mismatch from the department.