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News18
a day ago
- Business
- News18
Received Form 16/16A? Here's What You Must Do Before Filing ITR 2025
Last Updated: Incorrect TDS reporting can lead to tax mismatches, refund delays, or notices from the Income Tax Department. ITR Filing 2025: The Income Tax Return (ITR) filing season is underway following the reinstatement of form utilities. Salaried taxpayers are advised to await their Form 16 or Form 16A, the Tax Deducted at Source (TDS) certificates that enable them to calculate their tax liabilities for the financial year. These are issued by employers. Understanding Form 16 and Form 16A is crucial for both deductors and taxpayers. These forms serve as vital proof of TDS and are essential for accurate and efficient ITR filing. Follow these tips: Collect a Valid Form 16/16A: Obtain Form 16 or 16A from your employer or deductor. Ensure it is generated from TRACES; no substitutes are acceptable. Verify TDS Details: Cross-check the TDS information in Form 26AS or the Annual Information Statement (AIS) against your Form 16/16A to ensure accuracy. Avoid ITR Filing Errors: Accurate forms and verified data prevent notices from the Income Tax Department and ensure timely refunds. 'E- Filing Made Easy"Form 16/16A – The Starting Point of Your ITR Journey 🔷Deductors: Ensure Form 16/16A is generated only from TRACES for authenticity.🔷Taxpayers: Always cross-check TDS with your Form 26AS/AIS before filing. Correct forms help avoid mismatches and build… — Income Tax India (@IncomeTaxIndia) June 6, 2025 Match PAN Count: Verify the number of reported PANs against the previous year's data. File corrections for any discrepancies. File Correct and Complete Reports: Accurate reporting is crucial for deductees' tax credits. Errors can delay or impact their refunds or liabilities. Use TRACES Website Only: Generate Form 16/16A exclusively from the TRACES portal. This ensures accurate reflection of deductee details in their ITR. Incorrect TDS reporting can lead to tax mismatches, refund delays, or notices from the Income Tax Department. Adhering to the official TRACES process, whether deducting or receiving TDS, ensures transparency and streamlines the e-filing process.
Mint
21-05-2025
- Business
- Mint
Getting a refund of excess TDS on rent deposited by tenants is harder than it's supposed to be
It's that time of the year when taxpayers start downloading the Annual Information Statement (AIS) and Form 26AS to file their income tax returns (ITR). AIS is a detailed summary of a taxpayer's information provided in Form 26AS, which details the amounts of tax deducted at source (TDS) or tax collected at source (TCS) from various income streams, apart from the advance tax/self-assessment tax paid and high-value transactions. Recently, many landlords were taken by surprise while carrying out this exercise in respect of their rental incomes. They found that the amount of TDS credit on their rental incomes in Form 26AS was substantially lower than what was deducted and deposited by their tenants. Individual tenants paying rent in excess of ₹50,000 per month were required to deduct 5% as TDS and deposit the amount with the exchequer under Section 194IB of the Income Tax Act. This TDS rate was reduced to 2% with effect from 1 October 2024. In many cases, due to lack of awareness about the rate change, tenants deducted and deposited TDS at 5% for FY25 through their annual challan-cum-TDS statement prescribed in form 26QC. Also Read | Details on rent, home loan, TDS: ITR forms seek more disclosures this year Ideally, as per the law, the full TDS credit of the actual tax amount deducted and deposited by tenants (even if higher than the applicable rate) should be reflected in Form 26AS. The excess TDS credit can be claimed by the landlords while filing their ITRs. However, TDS credit of only 2% is reflected in Form 26AS even though the tenants had deducted and deposited TDS of 5%. This appears to be due to a glitch in the TRACES utility, which limits the availability of TDS credit to the extent of 2% only. Refund applications This faulty TDS utility is causing undue hardship to landlords and tenants because getting a refund is not easy. Taking cognisance of the problem, the Income Tax Department's Centralised Processing Centre (CPC) in Bengaluru has been sending mails to deductor tenants, prompting them to claim refunds of the excess TDS deposited by them by applying online in Form 26B. A link containing a note on the step-by-step procedure for filing Form 26B is also provided. To claim the refund of excess TDS amount, tenants should log in to the TRACES website. They need to click on 'Request for Refund' under the 'Statements/Forms' tab and select the reason 'I have made an excess payment of tax by mistake" from the drop-down list. They then need to add the relevant challan 26QC and fill in details including acknowledgement number, financial and assessment years, date and amount of TDS deposit, BSR code, and challan serial number. The claimable refund amount of excess TDS gets auto populated in Form 26B. They then add their bank account details to get the refund. Also Read | TDS on rent and contract work: How small taxpayers can avoid penalties The last segment of Form 26B contains certification to be provided by applicant tenants that the refunded amount shall not be claimed as TDS credit and there is no outstanding TDS demand in their names. Applicants finally need to e-verify Form 26B, either through their digital signatures or by Aadhaar-based OTP verification and submit it online. The guidance note suggests that applicant tenants will automatically get refunds of excess TDS amounts in their bank accounts after e-filing their application in Form 26B. But, in reality, when tenants e-file Form 26B, a message appears, directing them to take a printout of the Form 26B acknowledgement and send it to the jurisdictional TDS officer for further verification. Lengthy checklist When applicants send such application acknowledgements to the officer concerned, they are asked to furnish numerous other records and documents. These include the rental agreement, bank statement for the entire year, evidencing payment of rent and deposit of TDS, challan-cum-statement in Form 26QC, copy of the PAN card, and a cancelled cheque. The applicant tenants are further asked to submit a notarised indemnity bond on stamp paper of ₹100, undertaking to indemnify the Income Tax Department against any probable losses and demands arising out of such refund claims. Even after providing the plethora of records and documents, granting the refund is still at the discretion of the jurisdictional TDS officer. Also Read | Claimed HRA but skipped TDS on rent? The taxman wants answers Article 265 of the Constitution of India mandates that no tax can be collected except with the authority of law. So, the onus of refunding the excess tax amount should have been on the revenue department. Instead, it has been converted into an onerous task for tenants who have to run from pillar to post to get their otherwise Constitutionally guaranteed refunds. Mayank Mohanka is founder of TaxAaram India and a partner at S.M. Mohanka & Associates.
Mint
28-04-2025
- Business
- Mint
Paid 5% TDS on rent? This is how you can reclaim it. A step-by-step guide
As a tenant if you are paying a rent for more than ₹50,000 a month, you are supposed to deduct TDS (tax deducted at source) of 2 percent at the time of giving money to the landlord. Before Sept 20, 2024, the tax rate stood at 5 percent. So, if you too deducted extra tax, you can reclaim it by applying for a refund on TRACES portal. Taxpayers who file their tax return under the old tax regime are entitled to claim exemption for house rent exemption (HRA). Under the old tax regime, HRA is exempted under section 10(13A) of Income Tax Act for salaried individuals, explains the information on the Income Tax India potal. Here, we share a step-by-step guide to reclaim the extra tax paid. Claim the extra TDS paid: Step by step guide Step I. Login to TRACES website where you will see the landing page. Step II. At this stage, you are supposed to click 'request for refund (for forms 26QC)' under 'statements or forms' tab Step III. Make sure to go through the checklist and click 'Proceed' before submitting. Step IV. Now you can select at least one of the reasons mentioned there for which you are raising refund request. Now you can click 'add challan' before proceeding. Also Read | Income tax: 4 key reasons to choose the old tax regime over the new tax regime Step V. Now, you can share challan details for which taxpayer intends to claim refund. Step VI. You can now check challan consumption details before clicking ' I agree' for the declaration. Step VII. Now you can enter bank account details. Thereafter, click 'Proceed'. Following this, you will see a verification Page. Step VIII. Now you can confirm by clicking 'submit refund request' to continue TDS refund request. Also Read | 5 income tax provisions every taxpayer must know about Step IX. Once you click, 'Submit Refund Request' button, a pop up will be displayed to validate the request through DSC (Digital Signature Certificate) or Aadhaar. Following this, you can track refund request for forms 26QB/26QC/26QD).
