Depositing Your TDS

How to Check If Your Employer Is Depositing Your TDS with the Government?

Tax has been a major part of the lives of most Indians, and there are many rules associated with it. One such rule is TDS, which was introduced to collect tax from the very source of income. This blog will be all about How to Check If Your Employer Is Depositing Your TDS with the Government?.

The tax Deducted at Source (TDS) is a system of advance tax collection for individuals and organizations who are responsible to pay income tax. TDS on salary was introduced in India with the objective of minimizing the involvement of government agencies in collecting taxes. The deductee can be an individual or other entity which has received any sum as salary or professional fees from a deductor such as an employer or contractor. The deductor deducts TDS from the amount payable to the deductee and deposits it to the government. But this concept introduces discrepancies between the employer-employee-Income Tax department that need to be resolved. This blog will help you understand how to check if your employer is depositing your TDS on salary with the government.

How much should be deducted as TDS from salary?

TDS on salary is deducted depending on the income tax slab fixed for the current financial year. The income tax slab for the financial year 2020-21 is as follows:

IncomeIncome Tax Rate
Less than 2,50,000 INRNil
2,50,001 – 5,00,000 INR5%
5,00,001 – 7,50,000 INR12,500 INR + 10% of gross earnings in excess of 5,00,000 INR
7,50,001 – 10,00,000 INR37,500 INR+ 15% of gross earnings in excess of 7,50,000 INR
10,00,001 – 12,50,000 INR75,000 INR +20% of gross earnings in excess of 10,00,000 INR
12,50,001 – 15,00,000 INR1,25,000 INR +25% of gross earnings in excess of 12,50,000 INR
More than 15,00,000 INR1,87,500 INR + 30% of total earnings in excess of 15,00,000 INR

Reasons behind Potential Disagreements surrounding the TDS

The following are the main reasons for potential differences and disagreements that may arise surrounding the TDS:

  1. Employers deduct TDS on salary but do not submit it to the central government. This might be deliberate or unintentional.
  2. When employees join an organization, they may submit incorrect PAN numbers. As a result, even if a company deducts TDS on salary and pays the funds to the government, this is not shown on the tax credit statement of the relevant employee.
  3. Employers may inadvertently register incorrect PAN numbers for their workers.
  4. Although TDS in salary is deducted, a separate amount is submitted.

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

Do you know if the TDS on salary has been deducted or not? Well, there is no need to wait for your annual Form 16 (TDS Certificate) to arrive. Your employer issues form 16 only once a year and it may take time for this document to reach you. So, what can be done now? You could simply check your Form 26AS which will have the details of TDS that has been deducted by your employer. If there is any discrepancy in these two documents, then it’s time to cross-check with your employer. 

Form-26AS is a document that contains all of the information on tax credits. It specifies the amount of tax deducted and submitted to the central government. TDS on salary may therefore be confirmed by checking Form 26AS as well as Form 16/16A. The amounts shown in these two forms should always match each other.

Following is a step-by-step procedure of generating Form 26AS online:

  1. Log in to the Income Tax e-filling website.
  2. Select ‘View Form 26AS (Tax Credit)’ under Quick Link.
  3. You’ll be redirected to the TRACES website. 
  4. Select ‘View Tax Credit (Form 26AS)’
  5. Select your assessment year and preferable format. Click on ‘View/Download’.
  6. You’ll be provided with Form 26AS. The details of tax deducted at source by your employer in Part-A of the form. 

Now, you can also cross-check the TDS information on your Form-16 and Form 26AS. It is recommended to verify this once per quarter or at least once prior to the end of each fiscal year.

Correction of Form 16

Form 16 & Form 26AS are two important documents that inform the income tax department about your TDS on salary. If you find any discrepancies between these, it is important to inform your employer immediately and request them to correct or revise the TDS entries in your form 16. 

If your employer fails to correct Form 16, you may go ahead and file your Income Tax returns. All you need to do is to provide your employer TAN number in Income Tax Returns. The tax department will send a notice to your employer regarding the issue. 

Conclusion

It is important to be vigilant when checking your Form 26AS, which reports the tax deducted from the salary you have received for the year. If there are any discrepancies in line items on this form, it could mean that your employer has not submitted or updated your TDS on salary with their records of what you have been paid. You should request them to do so immediately and revise the income tax return accordingly. Once you’ve confirmed everything looks correct, file your taxes with peace of mind knowing that you have done all that you can. 

 

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