Consequences and penalty of not raising Flag-B in TDS return

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PAUL p j (Querist)
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26 September 2021 Some new generation banks , especially ESAF small finance bank not raising flag-B properly in their TDS return as such the interest income is not reflecting in 26 AS

Aashok Kumar Sharma

Aashok Kumar Sharma

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06 July 2024 If ESAF Small Finance Bank or any other bank is not correctly reporting TDS (Tax Deducted at Source) in their returns, resulting in interest income not reflecting in Form 26AS, you can take the following steps to address the issue:

1. **Contact ESAF Small Finance Bank**: Reach out to ESAF Small Finance Bank directly and inform them about the issue. Provide details such as the specific transactions where TDS was deducted but not reported correctly.

2. **Request for Corrective Action**: Ask ESAF Small Finance Bank to rectify their TDS returns (Form 26Q or Form 24Q, depending on the nature of payments) and ensure that they raise the TDS flags properly for the relevant transactions.

3. **Follow Up**: Keep a record of your communication with the bank. Follow up regularly to ensure that they take necessary action to correct the TDS reporting.

4. **Check Form 26AS**: Monitor your Form 26AS periodically to see if the corrections have been made. Form 26AS can be accessed through the TRACES portal or your internet banking account linked with PAN.

5. **File Grievance with Income Tax Department**: If the issue persists and the bank does not take corrective action, you can file a grievance with the Income Tax Department through their e-filing portal. Provide details of the issue, including communications with the bank.

6. **Consult a Tax Professional**: If necessary, seek advice from a tax professional or accountant who can assist you in dealing with the bank or escalating the matter to the tax authorities.

It's crucial to ensure that TDS is correctly reported because it impacts your income tax liability and the accuracy of your Form 26AS, which is used for various compliance purposes.

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