Best TDS Mismatch Guide: Fix Most Common Errors in Form 26AS & PAN Online

Have you checked your Form 26AS and noticed the TDS credits don’t match your Form 16? This TDS mismatch frustrates thousands of taxpayers yearly. At Master Brains, we help clients resolve these issues daily, the good news is that most errors can be fixed through TDS correction online methods. This guide shows you exactly how to fix TDS errors and prevent income tax refund delay.

Understanding TDS Mismatch: What is Really Happening

Think of Form 26AS as your official tax credit statement. When the TDS shown in your Form 16 or Form 16A doesn’t match what appears in your Form 26AS, that’s a TDS mismatch.

For Example: Your employer deducted ₹50,000 as TDS and your Form 16 shows this amount. But Form 26AS shows only ₹48,000 the remaining ₹2,000 difference can trigger TDS mismatches.

Common Types of TDS Mismatches

Form 16 vs Form 26AS difference happens when your TDS certificate shows one amount, but portal show something different or even nil amount.

PAN mismatch occurs when someone enters your PAN incorrectly. Even one wrong digit sends the tax credit to the wrong account, like depositing money into someone else’s bank account.

Incorrect TAN entries are trickier because you cannot fix TAN errors online. Only the Assessing Officer can correct these.

Wrong Section Code or Assessment Year mistakes happen when the deductor selects the wrong category (194C instead of 194J) or files under the wrong financial year.

TDS challan correction issues arise when challan details like the CIN, BSR code, deposit date, or amount differ from what is filed in the return.

Why These Mismatches Happen

Understanding the root causes helps prevent future problems. Most TDS mismatch cases stem from simple errors rather than complicated tax issues.

Clerical errors are the biggest culprit. Someone types your PAN as “ABCD1234E” instead of “ABCD1234F,” and your tax credit disappears. Timing issues cause confusion when TDS deducted in March but deposited in April shows up in the next quarter. System processing delays mean the government database doesn’t update instantly after filing.

When a PAN mismatch or other error occurs, your tax credits get stuck in limbo. They exist in the system but aren’t linked to your PAN, preventing you from claiming them.

Step-by-Step Guide to Fix TDS Errors

Step 1: Identify the Mismatch

Download your Form 26AS from the Income Tax portal and compare it line by line with your Form 16 or Form 16A.Check each entry for matching deductor names, TDS amounts, and quarters. Income Tax portal’s Tax Credit Mismatch User Manual under e-File automatically flags differences between your ITR claims and Form 26AS.

Step 2: Determine Responsibility

If the deductor made the error (wrong PAN, wrong amount), they must fix it. If you provided incorrect information, supply the correct details so they can file a correction. Communicate specifically with your deductor about the exact discrepancy.

Step 3: Use TRACES Portal for TDS Return Correction

The TRACES portal (TDS Reconciliation Analysis and Correction Enabling System) is where corrections happen Deductors log into TRACES, navigate to Defaults then Request for Correction, and choose from these options:

Add Challan includes omitted tax deposits. Challan Correction fixes unmatched deposits when challan details don’t match bank deposits. PAN Correction fixes wrong PANs and requires a digital signature. Add/Modify Deductee adds missing entries or corrects existing ones.

Understanding proper TDS compliance from the start helps avoid many issues, especially for startups.

Step 4: Submit and Track

After submitting your TDS correction online request, TRACES provides a 15-digit token number. Track progress through Defaults then Track Correction Request. You’ll see statuses like Open with CPC-TDS, In Progress, or Clarification Requested. If CPC-TDS asks for clarification, respond within seven days to avoid ticket closure.

Step 5: Handle ITR Adjustments

Once the correction reflects in Form 26AS, you may need to file a revised return to claim the corrected credits. Always correct the TDS return first before handling the ITR. Don’t claim credits in your ITR that aren’t showing in Form 26AS.

Step 6: Escalate When Needed

If the TRACES portal cannot resolve your issue, use Request for Resolution under Defaults to raise a grievance with CPC-TDS. You can also call 1800-103-0344 or email contactus@tdscpc.gov.in. For incorrect TAN in challans, contact your jurisdictional Assessing Officer.

Preventing Future TDS Mismatches

Prevention saves time and stress. At Master Brains, we recommend these practices to clients:

Double-check every PAN and TAN before filing using NSDL’s PAN verification service. One wrong digit in a PAN mismatch means lost tax credits. Use the correct TDS section code every time—194C for contractors, 194J for professional fees. If you’re dealing with GST-inclusive payments, our guide on How to Effectively Deduct TDS on GST ensures accurate calculations.

Deposit TDS on time and file returns promptly Late deposits attract interest and delay when credits show in Form26AS. Verify challan details before submitting returns. Enter the exact CIN, BSR code, and deposit date—a single typo creates a TDS mismatch.

Reconcile quarterly, not just at year-end Download Form 26AS every quarter and match it against your TDS ledger and issued certificates. Early error detection means easier fixes. If you’re managing multiple income sources, regular reconciliation becomes even more critical.

Use TDS Calculator to verify correct TDS amounts on payments, helping catch potential mismatches before they’re filed.

Frequently Asked Questions

How long does TDS correction take to reflect in Form 26AS?

After filing a TDS return correction through the TRACES portal, changes typically appear in Form 26AS within 7-10working days. During peak seasons like March-April, expect 2-3 weeks. Track progress using your token number.

Can we claim TDS credit if it’s not in Form 26AS?

No. The Income Tax Department automatically matches ITR claims against Form 26AS. Claiming TDS that doesn’t appear in Form 26AS triggers defective or demand notices. Always ensure corrections are processed and visible in Form26AS before filing your ITR. If you earn your income from multiple sources?

Check our blog How to File ITR with Multiple Income Sources in India.

What if the deductor refuses to file a correction?

Communicate in writing first (email provides documentation). If they still refuse, file a complaint with CPC-TDS through Request for Resolution on the TRACES portal. You can also approach the TDS CPC grievance cell or your jurisdictional Assessing Officer. Keep all communication records and TDS certificates as evidence.

Is there a deadline for filing TDS corrections?

Yes. The Finance Act 2024 limits correction statements to within six years from the end of the financial year in which the original statement was filed. For FY 2022-23 (AY 2023-24), corrections can be filed until March 31, 2029. Early correction is always better.

Will TDS mismatch delay our refund?

Absolutely. If your ITR claims more TDS than Form 26AS shows, the department holds your refund until the discrepancy resolves. This is the most common cause of income tax refund delay. You may receive a notice under Section 143(1) requesting explanation. Prompt TDS error fixing ensures timely refunds.

Get Professional Help with TDS Corrections

TDS mismatch issues might seem overwhelming, but they’re entirely fixable with the right approach. Most PAN mismatch and TDS challan correction issues stem from simple data-entry errors, not complex tax problems. Acting quickly prevents complications and extended income tax refund delays. At Master Brains we offer you complete relief from all your business world queries, To Know more about TDS Compliance read Essential TDS Compliance Tips Every Startup Must Know!.

Every rupee of TDS credit belongs to you. Partner with Master Brains  to claim what is rightfully yours. Expert guidance for Form 26AS reconciliation, TDS corrections, and hassle-free refunds!

Call on +91-8595867402 or Email to www.masterbrains.co.in.

Your tax credits, your time, and your peace of mind matter to us & help is just a call away.