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| + | metatag-description=(Form 16 shows TDS deducted but 26AS or AIS shows zero? Step-by-step citizen guide: TRACES check, CIT-TDS demand, e-Nivaran, CPGRAMS, BNS 316 route. 2026.) | ||
| + | metatag-og: | ||
| + | metatag-og: | ||
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| + | |||
| + | ====== TDS not deposited by employer: 26AS mismatch fix, citizen guide 2026 ====== | ||
| + | |||
| + | |||
| + | {{ : | ||
| + | |||
| + | Your Form 16 shows that ₹1,20,000 was deducted as TDS from your salary across the year, but when you log into the income-tax portal and pull Form 26AS, the figure shown is ₹40,000 (or sometimes ₹0). This guide tells you exactly what to do, in the order that works, and which laws protect you when your employer keeps your tax money instead of paying it to the government. | ||
| + | |||
| + | <WRAP info> | ||
| + | **Quick answer (read this first).** If TDS shown on your payslip or Form 16 is missing in 26AS or AIS, you are still legally entitled to credit for that tax (Supreme Court ruling in Yashpal Sahni, 2008, and §205 of the Income-tax Act 1961). Send a written 7-day demand to your employer, then file a grievance with CIT(TDS) of the employer' | ||
| + | </ | ||
| + | |||
| + | ===== What "TDS not deposited" | ||
| + | |||
| + | Your employer is a " | ||
| + | |||
| + | ===== Legal position in one screen ===== | ||
| + | |||
| + | * **Income-tax Act 1961, §192**: employer must deduct TDS on salary at the average rate. | ||
| + | * **§200**: deposit deadlines and consequences of missed deposits. | ||
| + | * **§201(1) and §201(1A)**: | ||
| + | * **§205**: where tax is deductible at source, the assessee shall not be called upon to pay the tax himself to the extent it has been deducted. This is the citizen shield. | ||
| + | * **§271C**: penalty equal to the unpaid TDS amount. | ||
| + | * **§276B**: prosecution for failure to deposit, with rigorous imprisonment from 3 months up to 7 years plus fine. The Supreme Court in **Madhumilan Syntex Ltd v Union of India (2007) 290 ITR 199 (SC)** confirmed that directors and principal officers can be prosecuted personally. | ||
| + | * **Yashpal Mohinder Pal Sahni v Commissioner of Income Tax (2008) 165 Taxman 144 (Bombay HC)** later cited and applied widely: credit cannot be denied to the assessee for tax actually deducted by the deductor, even if the deductor defaulted in deposit. | ||
| + | * **CBDT Instruction dated April 2024** to CIT(TDS) officers: where deductor default is proven, the assessee must be given credit and recovery action shifted to the deductor. | ||
| + | * **Rule 31A, Income-tax Rules 1962**: quarterly TDS statement (Form 24Q) filing schedule. | ||
| + | * **Bharatiya Nyaya Sanhita 2024, §316**: criminal breach of trust. When an employer takes your tax money in trust and uses it for working capital, that fits the definition. | ||
| + | * **Code on Wages 2019**: wages include amounts deducted for statutory remittance; non-remittance is a wage-code violation. | ||
| + | * **Payment of Wages Act 1936**: still applies for sectors not yet notified under the Code on Wages. | ||
| + | |||
| + | ===== Your first 30 minutes (do this today) ===== | ||
| + | |||
| + | - Log in to the Income-tax e-filing portal at https:// | ||
| + | - From the same dashboard, download **AIS (Annual Information Statement)** and **TIS (Taxpayer Information Summary)**. These three documents together show what the Department thinks you earned and paid. | ||
| + | - Open your **Form 16 Part A** (issued by employer; if it was never issued, see our guide to a [[/ | ||
| + | - Pull out **12 monthly payslips** and add up the TDS column. | ||
| + | - Build a simple **discrepancy table** with five columns: Quarter, TDS per payslips, TDS per Form 16, TDS per 26AS, Gap. | ||
| + | - **Screenshot** every page in 26AS, AIS, and your payslip portal. Save as PDF. | ||
| + | - Open TRACES at https:// | ||
| + | - **Email** the payroll head and finance head of your employer with the discrepancy table attached and a 7-day deadline (sample below). | ||
| + | |||
| + | If you do these eight steps inside 30 minutes, you now have the entire evidence pack that every later authority will ask for. | ||
| + | |||
| + | ===== Why TDS goes missing: 8 common causes ===== | ||
| + | |||
| + | - **Employer withheld but did not remit.** Most common with cash-stressed MSMEs and start-ups. The money sat in their current account and got used for vendor payments. | ||
| + | - **Filed Form 24Q with wrong PAN.** A single transposed character means your TDS is credited to a stranger. | ||
| + | - **Filed with correct PAN but wrong amount.** Quarter-wise mismatch; the employer reported less than they deducted. | ||
| + | - **Late deposit followed by quiet cancellation.** Employer paid, then reversed the challan when cash flow tightened. | ||
| + | - **Section or nature-of-payment code error.** Tax was reported under §194J (professional fees) instead of §192 (salary), or vice versa. | ||
| + | - **Multiple employers in the year, only one filed.** Common during job switches; the previous employer dragged feet on the closing quarter. | ||
| + | - **Misclassification as consultant.** Employer treated you as a 194J consultant when you were actually a §192 salaried employee. | ||
| + | - **Employer dissolved or under IBC.** The company is in Corporate Insolvency Resolution; the Resolution Professional now controls statutory dues. | ||
| + | |||
| + | ===== Sample email to employer (Tier 1 demand) ===== | ||
| + | |||
| + | < | ||
| + | To: payroll@[employer-domain].com; | ||
| + | Cc: hr.head@[employer-domain].com | ||
| + | Subject: TDS deducted from salary not reflecting in Form 26AS, FY 2025-26, 7-day demand notice | ||
| + | |||
| + | Dear [Payroll Head Name / Sir or Madam], | ||
| + | |||
| + | I, [Your Name], Employee Code [XXXX], PAN [ABCDE1234F], | ||
| + | [Employer Name] during FY 2025-26. The total TDS deducted from my monthly | ||
| + | salary as per payslips and Form 16 (Part A) issued by you is ₹[1, | ||
| + | |||
| + | However, my Form 26AS and AIS, as accessed on the income-tax portal on | ||
| + | [date], reflect a TDS credit of only ₹[40, | ||
| + | discrepancy is as follows: | ||
| + | |||
| + | | ||
| + | Q1 (Apr-Jun) | ||
| + | Q2 (Jul-Sep) | ||
| + | Q3 (Oct-Dec) | ||
| + | Q4 (Jan-Mar) | ||
| + | | ||
| + | |||
| + | Under §192, §200 and Rule 31A of the Income-tax Act 1961 and Rules 1962, | ||
| + | you were required to deposit the deducted TDS within the prescribed time | ||
| + | and file the quarterly statement (Form 24Q) accurately. The above gap | ||
| + | indicates either a filing default, a deposit default, or both, exposing | ||
| + | the company and its principal officers to liability under §201, §271C | ||
| + | and §276B. | ||
| + | |||
| + | I hereby demand that within 7 days of this email you: | ||
| + | |||
| + | 1. Deposit any unpaid TDS along with interest under §201(1A). | ||
| + | 2. File a revised Form 24Q for each affected quarter. | ||
| + | 3. Issue a corrected Form 16 (Part A) downloaded fresh from TRACES. | ||
| + | 4. Send me a written confirmation along with challan copies (CIN, BSR | ||
| + | code, date of deposit). | ||
| + | |||
| + | If the discrepancy is not cured in 7 days, I will be constrained to file | ||
| + | a grievance with the jurisdictional Commissioner of Income-tax (TDS), an | ||
| + | e-Nivaran complaint, a CPGRAMS complaint, and to consider a complaint | ||
| + | under §276B of the Income-tax Act 1961 and §316 of the Bharatiya Nyaya | ||
| + | Sanhita 2024 for criminal breach of trust. | ||
| + | |||
| + | Regards, | ||
| + | [Your Name] | ||
| + | PAN: [ABCDE1234F] | ||
| + | Employee Code: [XXXX] | ||
| + | Mobile: [+91-XXXXXXXXXX] | ||
| + | Date: [DD-MM-YYYY] | ||
| + | </ | ||
| + | |||
| + | ===== Sample complaint to CIT(TDS) (Tier 2) ===== | ||
| + | |||
| + | < | ||
| + | To, | ||
| + | The Commissioner of Income-tax (TDS), | ||
| + | [City having jurisdiction over employer' | ||
| + | Income-tax Department, [Address]. | ||
| + | |||
| + | Subject: Complaint against [Employer Name] (TAN: [XXXX12345X]) for non- | ||
| + | deposit of TDS deducted under §192 from salary of the undersigned for | ||
| + | FY 2025-26 and request for credit under §205 of the Income-tax Act 1961. | ||
| + | |||
| + | Respected Sir / Madam, | ||
| + | |||
| + | 1. I, [Your Name], PAN [ABCDE1234F], | ||
| + | TAN [XXXX12345X], | ||
| + | |||
| + | 2. As per Form 16 (Part A) issued by the deductor and monthly payslips | ||
| + | (enclosed), a total TDS of ₹[1, | ||
| + | |||
| + | 3. However, Form 26AS and AIS available on the income-tax portal | ||
| + | reflect TDS credit of only ₹[40, | ||
| + | arises from the deductor' | ||
| + | report the deduction in Form 24Q. | ||
| + | |||
| + | 4. A 7-day written demand was served on the deductor on [date]; copy | ||
| + | enclosed. No corrective action has been taken till the date of this | ||
| + | complaint. | ||
| + | |||
| + | 5. Under §205 of the Income-tax Act 1961, where tax is deductible at | ||
| + | source, the assessee shall not be called upon to pay the tax to | ||
| + | the extent it has been so deducted. This principle was upheld by | ||
| + | the Hon' | ||
| + | CIT (2008) 165 Taxman 144** and reiterated in CBDT instructions of | ||
| + | April 2024 directing CIT(TDS) offices to credit the assessee and | ||
| + | recover from the deductor. | ||
| + | |||
| + | 6. I respectfully request this office to: | ||
| + | |||
| + | a. Treat the deductor as " | ||
| + | b. Recover the unpaid TDS, interest under §201(1A), penalty | ||
| + | under §271C and initiate prosecution under §276B against | ||
| + | the principal officers, as held permissible in **Madhumilan | ||
| + | Syntex Ltd v UOI (2007) 290 ITR 199 (SC)**. | ||
| + | c. Direct the Centralised Processing Centre to grant me TDS | ||
| + | credit of ₹[1, | ||
| + | processing for FY 2025-26. | ||
| + | |||
| + | Enclosures: Form 16, 26AS, AIS, payslips, 7-day demand email, employer | ||
| + | reply (if any), PAN copy. | ||
| + | |||
| + | Place: [City] | ||
| + | Date: [DD-MM-YYYY] | ||
| + | PAN [ABCDE1234F] | ||
| + | </ | ||
| + | |||
| + | ===== The 5-tier escalation ladder ===== | ||
| + | |||
| + | - **Tier 1: Employer payroll and HR (7 days).** Send the sample email above to payroll, finance, HR, and CC the founder or MD if it is a smaller company. Ask for revised 24Q, fresh Form 16 from TRACES, and challan copies (CIN and BSR code). | ||
| + | - **Tier 2: CIT(TDS) of employer' | ||
| + | - **Tier 3: e-Nivaran (30-day SLA).** Log in to the income-tax e-filing portal, go to **Grievances > Submit Grievance**, | ||
| + | - **Tier 4: CPGRAMS (30 days).** File at https:// | ||
| + | - **Tier 5: §276B prosecution complaint and BNS §316 route.** If the deductor continues to default, request the CIT(TDS) in writing to launch §276B prosecution against the directors and principal officers. Parallelly, you can file a private complaint or an FIR under **BNS, 2023, §316** (criminal breach of trust) at the police station having territorial jurisdiction over the employer' | ||
| + | |||
| + | **Parallel sub-tracks**: | ||
| + | |||
| + | * **Labour Commissioner**: | ||
| + | * **§138 Negotiable Instruments Act 1881**: if the employer issued a settlement cheque that bounced, you have a separate cause of action within 30 days of dishonour notice. | ||
| + | * **Companies Act 2013, §447 (fraud)** and **MCA complaint**: | ||
| + | * **Insolvency route**: if the employer is under CIRP, file your TDS claim with the Resolution Professional in Form CA / Form D (workmen and employees). Statutory dues for tax deducted but not deposited are typically treated as Government dues with their own priority. | ||
| + | |||
| + | ===== ITR-filing workaround while the dispute is on ===== | ||
| + | |||
| + | - **Claim the full TDS in your ITR** as per Form 16 and payslips, even if 26AS shows less. The portal will allow you to type a higher TDS figure than the prefill suggests; do so deliberately and keep the evidence ready. | ||
| + | - **Attach a covering note** to the ITR acknowledgement in your own records: Form 16, payslips, 26AS print, AIS print, the 7-day demand, and the CIT(TDS) complaint. | ||
| + | - **Expect an intimation under §143(1)** within 30 to 90 days raising a demand for the unmatched TDS or reducing the refund. Do not panic. | ||
| + | - **File a rectification application under §154** quoting Yashpal Sahni and §205, attaching the same evidence pack. The CPC at Bengaluru has been instructed (CBDT April 2024) to release credit on this basis. | ||
| + | - If the CPC still refuses, **file a first appeal before CIT(A)** under §246A within 30 days. Costs are minimal and the precedent is overwhelming. | ||
| + | - Track interest under **§244A**: if your refund is delayed because of the deductor' | ||
| + | |||
| + | ===== Documents checklist ===== | ||
| + | |||
| + | * 12 monthly **payslips** (PDF, not screenshots). | ||
| + | * **Form 16 Part A** (downloaded from TRACES, not just employer' | ||
| + | * **Form 26AS** for the financial year. | ||
| + | * **AIS** and **TIS** prints. | ||
| + | * **Salary credit bank statements** showing matching net-of-TDS deposits. | ||
| + | * **Appointment letter** and any salary-revision letters. | ||
| + | * **Employer PAN and TAN** (visible on Form 16 Part A header). | ||
| + | * **Email correspondence** with payroll and HR. | ||
| + | * **TRACES Taxpayer view** of TDS credit. | ||
| + | * **Acknowledgements** of e-Nivaran and CPGRAMS tickets. | ||
| + | * **CIN and BSR code** of any partial deposits made by the employer. | ||
| + | |||
| + | ===== Citizen rights you can quote in every letter ===== | ||
| + | |||
| + | * **Credit cannot be denied** for tax actually deducted (Yashpal Sahni, 2008; CBDT instruction April 2024). | ||
| + | * **Recovery cannot be made** against the assessee where the deductor defaulted (§205, Income-tax Act 1961). | ||
| + | * **Right to file FIR** or private criminal complaint under BNS, 2023 §316 for breach of trust. | ||
| + | * **Right to seek prosecution under §276B** of the Income-tax Act 1961 against the principal officers. | ||
| + | * **Right to inspect statutory registers** of the employer under the Companies Act 2013 (members), and to file an RTI request if the employer is a Public Sector Undertaking, | ||
| + | * **Right to whistleblower protection** under the Whistle Blowers Protection Act 2014 when reporting wilful tax default to CIT(TDS). | ||
| + | |||
| + | ===== Special cases ===== | ||
| + | |||
| + | * **Freelancers and consultants (§194J or §194C TDS).** Same playbook applies, but the demand letter should cite §194J / §194C and Form 26Q (not 24Q). For consultants, | ||
| + | * **Start-ups and failed companies.** Move to Tier 2 within 7 days. Founders are individually liable as principal officers; do not let the corporate veil distract you. | ||
| + | * **ESOP TDS.** TDS is required at perquisite exercise. Eligible start-ups can defer for 5 years under §192(1C); confirm whether your employer formally exercised this deferral, otherwise it is a regular §192 default. | ||
| + | * **Perquisite TDS.** Rent-free accommodation, | ||
| + | * **NRI employees under §192.** If you were an NRI for part of the year, ensure DTAA relief is not double-counted; | ||
| + | * **Government deductors.** Central or State Government salary TDS flows through the Pay and Accounts Office (PAO) using **Form 24G**, not direct challans. The escalation route is to the PAO and the Principal CCA, not a private TAN office. | ||
| + | |||
| + | ===== Real-life pattern (illustrative, | ||
| + | |||
| + | <WRAP center round box> | ||
| + | A salaried product manager at a Bengaluru SaaS start-up was deducted ₹1,20,000 in TDS over FY 2024-25. Form 16 reflected the full figure. 26AS showed ₹40,000. The employer' | ||
| + | </ | ||
| + | |||
| + | ===== Common mistakes that cost citizens their refund ===== | ||
| + | |||
| + | * Filing ITR using the **prefilled lower TDS** without flagging the discrepancy. | ||
| + | * Waiting for the employer to "fix it next quarter" | ||
| + | * Sending **only WhatsApp messages** to payroll, no email trail. | ||
| + | * Not downloading **Form 16 from TRACES** (the employer-issued PDF can be unilaterally regenerated). | ||
| + | * Forgetting **CIN and BSR code** in correspondence (CIT(TDS) needs these to trace partial deposits). | ||
| + | * Skipping **e-Nivaran** and jumping straight to court; the SLA-driven grievance ladder makes later appeals stronger. | ||
| + | |||
| + | ===== Frequently asked questions ===== | ||
| + | |||
| + | ==== Can I claim TDS in my ITR if it is not showing in 26AS? ==== | ||
| + | |||
| + | Yes. The portal allows you to declare a TDS figure higher than the prefilled 26AS amount. Keep Form 16 Part A from TRACES and payslips ready. Expect a §143(1) intimation; file a §154 rectification quoting §205 and Yashpal Sahni. | ||
| + | |||
| + | ==== What if my employer has shut down or is bankrupt? ==== | ||
| + | |||
| + | The employer' | ||
| + | |||
| + | ==== Is an FIR possible against the employer for non-deposit of TDS? ==== | ||
| + | |||
| + | Yes, under §316 of the Bharatiya Nyaya Sanhita 2024 (criminal breach of trust). The employer holds your tax money in trust. You can also push CIT(TDS) to launch §276B prosecution; | ||
| + | |||
| + | ==== How fast does CIT(TDS) act after a complaint? ==== | ||
| + | |||
| + | In practice, 6 to 16 weeks. The April 2024 CBDT instruction has tightened timelines. The e-Nivaran 30-day SLA and CPGRAMS 30-day SLA running parallelly force the office to respond on record. | ||
| + | |||
| + | ==== Can I claim interest under §244A if my refund is delayed by the mismatch? ==== | ||
| + | |||
| + | Yes, if the delay is attributable to the Department or the deductor and not to you. Interest is 0.5% per month from 1 April of the assessment year until the date of refund. | ||
| + | |||
| + | ==== What exactly is §205 of the Income-tax Act 1961? ==== | ||
| + | |||
| + | §205 says that where tax is deductible at source, the assessee shall not be called upon to pay the tax himself to the extent it has been so deducted. It is the statutory wall between the citizen and the deductor' | ||
| + | |||
| + | ==== Does the employer' | ||
| + | |||
| + | Yes, but with a lag of 1 to 3 weeks after CPC-TDS processes the corrected statement. Always ask the employer for the CIN and BSR code of the deposit and the **acknowledgement number** of the revised 24Q, then verify on TRACES. | ||
| + | |||
| + | ==== What if the employer says they have deposited it but my 26AS still shows zero after 30 days? ==== | ||
| + | |||
| + | Ask for the **challan CIN, BSR code, date, and amount**, then check the same on TRACES (Challan Status Inquiry). If the challan exists but is not linked to your PAN, the employer' | ||
| + | |||
| + | ==== Can I file an RTI request to know if my TDS has been deposited? ==== | ||
| + | |||
| + | RTI applies to public authorities. If your employer is a PSU, central or state government body, or substantially financed by government, you can RTI both the employer and the Income-tax Department. For private employers, you cannot use RTI against the employer, but you can RTI the Income-tax Department to learn about action taken on your CIT(TDS) complaint. | ||
| + | |||
| + | ==== Will I get penalised if my employer' | ||
| + | |||
| + | No. §205 protects you. The deductor faces §201, §201(1A) interest, §271C penalty, and §276B prosecution. You are at most asked to clarify the source documents. | ||
| + | |||
| + | ==== What if multiple employers in the same year all under-deposited? | ||
| + | |||
| + | Build one consolidated discrepancy table covering all employers, file one CIT(TDS) complaint per jurisdiction, | ||
| + | |||
| + | ===== Sources and references ===== | ||
| + | |||
| + | * Income-tax Act 1961: §192, §200, §201, §205, §271C, §276B (https:// | ||
| + | * Income-tax Rules 1962: Rule 31A; Form 24Q and Form 16. | ||
| + | * Bharatiya Nyaya Sanhita 2024: §316 (criminal breach of trust). | ||
| + | * Code on Wages 2019; Payment of Wages Act 1936. | ||
| + | * Supreme Court of India, **Madhumilan Syntex Ltd v Union of India (2007) 290 ITR 199 (SC)**. | ||
| + | * Bombay High Court, **Yashpal Mohinder Pal Sahni v CIT (2008) 165 Taxman 144**. | ||
| + | * CBDT Instruction, | ||
| + | * TRACES portal at https:// | ||
| + | * Income-tax e-filing portal at https:// | ||
| + | * CPGRAMS at https:// | ||
| + | |||
| + | ===== Related citizen guides on RTI Wiki ===== | ||
| + | |||
| + | * [[https:// | ||
| + | |||
| + | * [[https:// | ||
| + | * [[https:// | ||
| + | * [[https:// | ||
| + | |||
| + | ===== Closing call to action ===== | ||
| + | |||
| + | If the employer' | ||
| + | |||
| + | //Last reviewed by RTI Wiki editorial team on 2026-05-16.// | ||
| + | |||
| + | {{tag> | ||