Reasons for mistakes in credit for tax payments or TDS

A major reason for difference in refund amount during processing is that the details of tax payment or TDS do not match with the data available with the Department. The critical checkpoints are as under:

• Corresponding deduction of tax (TDS) on salary by all Employers should be correctly entered in Schedule TDS1 in ITR1 or Schedule TDS 1 for ITR 2.
• TDS on salary should be entered in Schedule TDS1 ONLY and TDS on other Income should be entered in Schedule TDS 2 ONLY.
• Tax deduction Account Number (TAN) of the Employer/Deductor is the unique identifier for matching TDS claims made against TDS reported by Employer/Deductor.The TAN number is mentioned on the Form 16 given by the Employer or on the Form 16A given by the Deductor. In case the TAN of the Employer/Deductor is not correctly mentioned, no matching is possible and TDS credit will not be given.
• If the TAN has been correctly entered but the Employer/Deductor does not report the same TDS details to the Department, especially the taxpayer Permanent Account Number (PAN), then also the TDS cannot be matched. Therefore it is advised to check Form 26AS for the amount which has already been deposited by persons deducting tax on behalf of the taxpayer. Thereafter, the taxpayer should bring this fact in the notice of persons deducting tax so that they can act accordingly.
• In case of Tax payments of Advance tax or Self Assessment tax, the PAN used to submit the tax challan to the bank should be the same as the PAN used to submit the return. Without a valid PAN the tax payment received from the bank would be in suspense and cannot be matched with tax payment claim as entered in the return.
• While making the tax payment at the Bank, NO MISTAKE should be made in the challan while entering the PAN, Name, Major head (20 or 21), Assessment Year, Type of tax payment {advance tax (code 100), Self Assessment tax (code 300)}, tax applicable (Income tax other than companies).
• Any tax payment made under code 400 corresponding to Tax on regular Assessment cannot be used for matching and accordingly credit cannot be given against advance tax or self assessment tax claims.
• The Challan Identification Number (CIN) is the combination of BSR code (any bank branchs unique 7 digit identification number issued by RBI), date of deposit of challan (DD-MM-YY), and the running serial number of the challan, and is mentioned by the Bank while accepting tax payment on its seal. In case this is not clearly legible, the Bank can be requested to provide correct details. This must be entered correctly in the return while claiming credit.