Many taxpayers rely solely on Form 26AS and the AIS/TIS to file their Income Tax Return. But some income may not appear in your Form 26AS or TIS due to delayed or incorrect reporting by deductors.
For Example:
Abhay has a rental income of 50,000 p.m, which has not been fully shown in 26AS or TIS.
When This Discrepancies Occur
- The tenant or company may fail to file TDS returns or TDS on partial income has been reflected (such as - out of 12 months TDS only 10 months only 50,000 @10% @10 = 50,000 is reflecting and rest 10,000 not deposited by the deductor).
- As a result, the TDS did not reflect in 26AS or TIS for the recipient.
This creates a mismatch, when a person receives rent, tax is deducted, but it is not visible in their tax forms.
Impact on Rent Reporting
If a person relies solely on automated reports, it may lead to underreporting of rental income.
When income or TDS is not showing in your Form 26AS or Tax Information Statement (TIS), you must:
- Manually add the rental correct income under the "Income from House Property" Section to ensure correct processing
- Then go to Schedule - TDS Details of TDS/TCS, make the necessary changes and share if the correct TDS is not showing in Column 6 - Tax Deducted/Collected.
Scenarios when income or TDS is missing or incomplete in 26AS/TIS
Scenario 1: Deductor Files TDS Return Before ITR is Processed
The deductor files the TDS return before 15th September, so the data appears in 26AS/TIS by the time of processing, resulting in no demand.
Scenario 2: Deductor Files Return After ITR Processing
The deductor updated the TDS return after 15th September, but to avoid the penalties, the taxpayer filed the return within the due date and the ITR was processed within a few days for which caused a demand notice for the missing months.
Rectification Process
If You Get a Tax Demand-
- Don't panic. Go to the Income Tax website, log in and click on the option Service tab > “Rectification” > "Rectification of order passed by CPC"
- This will help you update your return based on the correct income and TDS, possibly reducing the demand to zero.
Scenario 3: Deductor Never Files Return or Deposits TDS
In this case, it may lead to a permanent mismatch. For this, the taxpayer can still claim the income and TDS manually, but needs to deposit the tax themselves.
Why is this better?
- If even one month’s income is missing in 26AS, the IT department may issue a demand notice with interest within 1 year.
- To avoid penalties and interest, it is better to pay the tax yourself upfront.
If you pay tax by yourself and file a full income, it keeps your ITR clean and avoids future demands.
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