whether income Tax paid by you has reached Income tax office,check it out?

You may be thinking that with the end of the financial year, your tax troubles are done with. Before you heave a sigh of relief, do check whether the tax deducted from your income has been considered as paid by the income tax department. If the tax has not been credited to your name and PAN number, your tax problems may have just begun.All the taxes paid by a taxpayer in a financial year are mentioned in the annual tax statement, or the Form 26 AS. This includes the tax deducted at source (TDS) on salary, bank interest and any consultancy payments from clients as well as the taxes paid directly by the individual. Details of the company or bank that deducted the tax and its tax deduction account number (TAN) are mentioned in the form. Any tax refund due to the taxpayer is also mentioned.However, there are cases when the TDS is not deposited with the government. "In many cases employers, professionals or contractors don't deposit the tax even though they deduct TDS from the payment," says Ameet Patel, tax partner, Sudit K Parekh & Co. In other cases, the tax has been deposited but the PAN number is either missing or incorrect. "At the time of uploading details of tax credit or through tax challans, banks sometimes upload incorrect or incomplete information," says Shaunak Dalal, direct tax partner of chartered accountancy firm MZS & Associates. In both instances, the taxpayer is not given the credit for the tax paid. The income tax department says that incorrect PAN or TAN are the most common reasons for a taxpayer not getting credit for the tax deducted from his income.

This slip-up can have serious ramifications for the taxpayer. If the tax supposedly paid by you is not mentioned in the Form 26 AS, the income tax department may raise a demand for more. "The taxpayer will not be allowed tax credit if the payments are not reflected in the annual tax statement," says Dalal.

Mumbai-based insurance agent Lalit Jadhav knows well how problematic this can be. The `6,000 deducted from his insurance commission by his company in 2009-10 did not reflect in his Form 26 AS. As a result, he didn't get the refund he expected. "When I approached the assessing officer, I was told that the refund was adjusted against my tax dues."

As the tax had already been deducted, Jadhav went back to the insurance company for a rectification of the error. Finally, after eight rounds of the income tax office and submitting in writing that taxes have been cut and getting a TDS certificate from the insurer was he able to get the credit for his tax payments.

Make sure you don't face the same problems when you file your returns this year. The last date for filing your tax return is about three months away but it never hurts to start early. "Don't wait till the last few days. A taxpayer should check his Form 26 AS well in advance, say in April or May, and see if all the taxes he has paid have been mentioned in the tax statement," says Vikas Vasal, executive director, KPMG.

One can see his Form 26 AS online by registering online (see graphic). The 15-minute process can help save you hours of trouble by giving you a correct picture of your TDS and other tax payments. Online tax filers are at an advantage. They need not go through this registration process because the form is mailed to them. You can even register your email id to receive your annual tax statements.

If the tax deducted is not mentioned in the Form 26, contact the company or bank that had deducted the tax and get it to rectify the error. "Unless the tax deductor revises his TDS returns, the mistake will not get rectified," Patel of Sudit K Parekh & Co.
Next, write to your assessing officer saying that though tax has been deducted, you have not got the credit for the same. Attach copies of supporting documents such as Form 16, salary slips or TDS certificates with the letter. "This will make sure that in case your return gets picked up for audit then you will not get penalised for someone else's error," says Vasal. Similarly, if the taxes have been deducted but not deposited into the government coffers, the salary slip and Form 16 will prove that you are not at fault.

The Central Board of Direct Taxes has empowered assessing officers to approve TDS claims up to a limit by verifying the supporting documents. "All returns where the difference between the actual TDS and the amount mentioned in the annual tax statement does not exceed `1 lakh may be accepted without verification," says Dalal.

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