TDS: How To Check, Claim And Correct Tax Deducted At Source

Your Money, Your Credit, Your Responsibility

 

If you have ever received a salary, sold a property, or earned interest on a fixed deposit, you have likely encountered TDS. Tax Deducted at Source is exactly what the name suggests. The tax is deducted before the money reaches you. For most people, this is a good thing. It means your tax is being paid in instalments throughout the year, rather than hitting you with one large bill at the end.

 

But here is the problem. TDS is only useful if you can actually claim credit for it. And that does not always happen automatically. Mistakes by employers, banks, or other deductors can leave your tax credit stranded. You may end up with a demand notice even though tax was already cut from your income. That is why understanding how to check, claim, and correct TDS is essential for every taxpayer.

 

We at CA Dhiraj Ostwal and Associates often meet clients who have paid their taxes correctly through TDS but are still facing demands simply because of mismatches. This guide will help you understand the system and protect yourself from unnecessary trouble.

 

Form 26AS: Your Tax Credit Statement

 

Think of Form 26AS as your tax passbook. It is a consolidated statement that shows everything the Income Tax Department knows about your tax payments for a financial year. This includes TDS deducted by employers and other deductors, TCS collected, advance tax and self assessment tax you paid, and refunds you received .

 

The form also shows details of specified financial transactions, tax demands, and any TDS defaults by deductors . When a deductor files their TDS return and the department processes it, the credit reflects in your Form 26AS. If it is not there, you cannot claim it easily during return filing.

 

You can view and download Form 26AS through the income tax e-filing portal by logging in and navigating to the relevant section. Many banks also allow you to view it through net banking if your PAN is linked to the account . It is a good habit to check this statement at least once a quarter, rather than waiting until the last minute before filing your return.

 

The AIS and Why It Matters

 

The Annual Information Statement, or AIS, is a more detailed version of your tax information. It includes everything in Form 26AS plus additional details about financial transactions and income sources . The AIS is meant to give you a complete picture of what the department sees.

 

If there is a difference between the TDS shown in your Form 26AS and the AIS, you can rely on Form 26AS for filing your return and computing your prepaid taxes . The 26AS is the more authoritative document for tax credit purposes. Still, discrepancies between the two should be taken seriously and resolved quickly.

 

Form 16 and Form 16A: The Certificates You Need

 

Your Form 26AS tells you what the department has recorded. But you also need the certificate from your deductor. For salaried individuals, this is Form 16. For non-salary income like professional fees or interest, it is Form 16A .

 

These certificates contain details of the TDS deducted and deposited. They are issued by the deductor and are mandatory . The certificate is not just a formality. It helps you cross-check whether what your employer or bank deducted actually matches what is reflected in your 26AS. If they do not match, you have a problem that needs fixing .

 

When you receive Form 16 or 16A, verify the key details. Your name, PAN, the deductor's TAN, the amount of TDS, and the period for which it was deducted . If any of these are wrong, you need to get them corrected. A small error in PAN or TAN can prevent your credit from reflecting in your 26AS, leading to a tax demand later.

 

What to Do When TDS Credit Is Missing

 

This is the most stressful situation for any taxpayer. You have your payslip or bank statement showing that TDS was deducted. But when you check Form 26AS or AIS, the credit is not there. This happens when the deductor has deducted tax from you but has not deposited it with the government, or has filed an incorrect return.

 

Here is what you need to understand. The law protects you in this situation. Section 205 of the Income Tax Act says that if tax has been deducted from your income, the department cannot recover the same amount from you again . The liability shifts to the deductor once the deduction is made.

 

The practical steps are clear. First, approach the deductor and ask them to deposit the TDS and file the correction return. If they refuse or fail to act, you should still claim the TDS credit in your income tax return . File your return showing the actual income and the actual tax deducted, based on your salary slips, bank statements, and certificates.

 

You will likely receive a TDS mismatch notice after processing. At that point, you can submit documentary evidence to prove that tax was actually deducted from your income. If the Assessing Officer is satisfied, your credit will be allowed and the demand will be cancelled .

 

Raising a Grievance Through TRACES

 

If the deductor is not cooperating, the TRACES website provides a formal grievance mechanism. You can raise a Request for Resolution against a specific deductor's TAN . You will need to provide details like the TAN, the section under which TDS was deducted, the amount paid, and the TDS amount.

 

When raising the request, you must attach supporting documents. Your salary slip, bank statement showing the net credit, or Form 16 can serve as proof . Once submitted, a unique ticket number is generated that you can use to track the status. The deductor or the Assessing Officer will respond, and you can monitor the progress through the Resolution Tracking section .

 

This is a powerful tool that many taxpayers do not use. It creates a formal record and puts pressure on the deductor to resolve the issue. If the deductor ignores the request, the matter can escalate within the department.

 

Correcting TDS Errors: A New Time Limit

 

Deductors have always been able to file correction statements to fix errors in their TDS returns. PAN errors, challan mistakes, and amount mismatches can all be corrected through the TRACES portal . But there is a significant change you need to know about.

 

From April 1, 2026, the time limit for filing TDS and TCS correction statements has been reduced to two years from the end of the relevant financial year . This is a major shift. Earlier, corrections were allowed for much longer periods. Now, if a deductor misses this window, the error may become permanent.

 

What does this mean for you as a deductee? It means you cannot afford to wait. If you notice that your TDS credit is missing or incorrect, raise the issue immediately. Inform your employer or the deductor right away. If they delay beyond the correction window, your credit could be lost forever, and you would have to fight a much harder battle to claim it .

 

The New TRACES 2.0 Portal

 

The Income Tax Department launched TRACES 2.0 in April 2026, replacing the older system with a more modern interface . The new portal brings Form 26AS, AIS, and TDS certificates onto a single dashboard. It also introduces a single Tax Year concept, replacing the confusing Previous Year and Assessment Year system .

 

For deductees, the benefits are clear. You can check your tax credits, download certificates, and track corrections from one place. There is also a dedicated section for compliance under the old Income Tax Act, 1961, for historical data . If you are a non-resident, there is a separate portal designed for your needs .

 

The portal does not allow you to make TDS payments. That still happens through the e-filing portal. But once the payment is processed, TRACES 2.0 becomes your one-stop shop for everything related to your TDS credit .

 

Practical Steps to Protect Yourself

 

The system works best when you stay proactive. Check your Form 26AS and AIS regularly, not just before filing your return. When you receive Form 16 or 16A, verify the details against your payslips or bank statements. If you spot a discrepancy, act immediately.

 

Keep all your documents safe. Salary slips, bank statements showing net credits, TDS certificates, and any communication with deductors should be preserved. If a mismatch notice arrives, these documents are your defence.

 

If you are dealing with a complex situation, such as TDS on property sale or clubbing of income from a spouse's fixed deposit, the rules can get tricky . In such cases, professional guidance can save you from costly mistakes.

 

Final Thoughts

 

TDS is designed to make tax compliance easier, not harder. But the system relies on deductors doing their job correctly and deductees staying vigilant. When things go wrong, the law protects you, but only if you take the right steps at the right time.

 

Check your credit regularly. Claim what is rightfully yours. Raise grievances when needed. And remember that the correction window is now shorter than ever. A little attention today can save you from a major headache tomorrow. If you are unsure about your TDS position, a qualified chartered accountant can help you navigate the process and ensure you get every rupee of credit you deserve.