Confused about your TDS mismatch intimation notice? Learn the real reason behind it, who’s responsible, how to respond online, fix errors, and avoid tax demands. Step-by-step guide for Indian taxpayers with latest FY 2024–25 updates.
Taxpayers across India are increasingly receiving notices for TDS mismatches under Section 143(1) of the Income Tax Act. If you've filed your return on time, paid your taxes, and yet a TDS mismatch intimation notice shows up in your inbox—don’t panic. You’re not alone, and it’s not necessarily your fault.
In this detailed guide, we’ll walk you through why it happens, how to verify it using Form 26AS, and how to respond appropriately within the deadline—while avoiding penalties and unnecessary stress.
Why Are TDS Mismatch Notices Being Issued So Frequently?
The rise in automated systems for processing income tax returns has made the detection of even minor discrepancies more efficient—and unforgiving. TDS mismatch notices are often generated because of data mismatches between:
- What you reported in your ITR, and
- What your deductors (employers, banks, etc.) reported to the Income Tax Department.
The Central Processing Centre (CPC) matches your declared TDS with what’s reflected in Form 26AS and AIS (Annual Information Statement). If there’s a mismatch, a notice under Section 143(1) is auto-generated.
Even a minor error—like a wrong PAN entry by your employer—can trigger a mismatch.
What Triggers a TDS Mismatch Intimation?
Below are the most common reasons why taxpayers receive these notices:
| Reason | Explanation |
|---|---|
| Incorrect PAN mentioned by deductor | TDS may be deducted but not reflected in your Form 26AS. |
| Deductor filed incorrect TDS return | Data mismatch occurs when deductor makes filing errors or omits entries. |
| Delay in TDS filing | Your ITR is processed before TDS data is updated in the system. |
| You filed ITR before verifying 26AS | If your return reflects TDS that hasn’t yet appeared in 26AS, mismatch arises. |
| Wrong assessment year selected | Often missed when filing revised or belated returns. |
Important: In most cases, the issue is not your fault. But the responsibility to respond lies with you.
A Real Example: TDS Mismatch Due to Employer Filing Error
Consider the case of a salaried individual in Delhi who received a demand notice of ₹1.9 lakh due to TDS mismatch. He had correctly filed his return, including salary income and claimed TDS of ₹1.92 lakh. However, the employer had filed the TDS return with an incorrect PAN entry, and the amount didn’t reflect in the individual’s Form 26AS.
Despite having Form 16, the CPC system issued a mismatch intimation notice under Section 143(1) demanding additional tax. Only after filing a rectification request and getting the employer to revise the TDS return was the issue resolved.
This is not an isolated case. According to this official report by the Income Tax Department, TDS reconciliation errors form a large chunk of initial tax return disputes every year.
How to Verify the Mismatch: Start with Form 26AS
Before jumping to file a revised return or submitting a rectification request, your first step should be to download and compare your Form 26AS with your ITR.
Steps to Access Form 26AS
- Go to the TRACES portal.
- Log in using your PAN credentials via the Income Tax e-filing portal.
- Navigate to “View Form 26AS (Tax Credit)” under the “My Account” section.
- Choose the relevant Assessment Year (e.g., AY 2024–25 for FY 2023–24).
- Download the PDF and cross-verify the TDS entries with what you have reported in your ITR.
Check for:
- Any missing TDS entries.
- Differences in TDS amount.
- Entries under a different PAN or incorrect section code.
If your ITR reflects TDS that’s not shown in Form 26AS, that’s where the mismatch lies.
Next: Understanding Whether the Mismatch Is Your Fault or the Deductor’s
Not all mismatches are created equal. In some cases, you might have inadvertently claimed TDS that wasn’t actually deposited. In others, it’s the fault of the deductor—like a bank or employer—who may have filed incorrect TDS returns or missed deadlines.
Who’s at Fault for the TDS Mismatch?
Once you’ve confirmed the mismatch using Form 26AS and your filed ITR, the next logical step is identifying where the error originated. This distinction is crucial—it determines what corrective path you should take.
Let’s break it down using a simple matrix.
| Scenario | Likely Error Source | Who Should Act | Suggested Action |
|---|---|---|---|
| TDS deducted but not in 26AS | Deductor failed to file or filed incorrectly | Deductor | Ask them to revise TDS return |
| TDS amount in ITR is higher than in 26AS | You over-reported TDS or used wrong section | You | File rectification or revised ITR |
| PAN mismatch in deductor records | Deductor entered wrong PAN | Deductor | Request correction through TRACES |
| TDS claimed but income not reported | You missed showing corresponding income | You | File revised return under ITR‑U or correct via Section 154 |
| Delay in deductor's filing | TDS return filed late, not reflected yet | Deductor | Wait or consult deductor, avoid hasty correction |
Understanding where the breakdown occurred avoids the trap of filing unnecessary revised returns or paying incorrect demands.
Fixing the TDS Mismatch: Know Your Options
Depending on the nature of the mismatch, you have multiple routes to resolve it legally and efficiently. Each option has specific eligibility, timelines, and procedures.
Option 1: Request Rectification Under Section 154
If the error is minor or data was correctly reported but processed incorrectly, you can file a rectification request under Section 154.
When to Use:
- ITR was filed correctly, but CPC calculated tax wrongly.
- System missed matching updated Form 26AS.
- You’ve now obtained revised TDS entries from deductor.
How to File:
- Visit the Income Tax e-Filing Portal.
- Log in and go to e-File > Income Tax Return > File Rectification.
- Select the relevant Assessment Year and reason.
- Upload supporting documents, such as updated 26AS or deductor's revised filing.
Rectifications are generally processed in 30–45 days if no further clarification is required.
Option 2: File a Revised Return (Before Deadline)
If the mistake was on your part—like claiming excess TDS or incorrect entry of income—filing a revised ITR is the safest way to avoid penalties.
- Deadline: You can revise an ITR before 31st December of the assessment year.
- How to Do It: Same as original filing—just select "Revised Return under Section 139(5)" in your filing form.
Always ensure your revised return matches the Form 26AS and AIS data to avoid repeated mismatch issues.
Option 3: Use ITR-U if Deadline Is Missed
If you missed revising the return within the allowed window, the ITR-U (Updated Return) facility allows you to update your return up to 24 months from the end of the relevant assessment year.
Key Points:
- You cannot reduce your tax liability through ITR-U.
- You must pay additional tax: 25% of the tax + interest if updated within 1 year, or 50% if updated in the second year.
This facility, introduced under Section 139(8A), helps regularise old tax errors and mismatches even beyond traditional timelines.
Option 4: Have the Deductor File a Revised TDS Return
If the mismatch occurred due to the deductor’s mistake (e.g. wrong PAN, missed reporting), ask them to:
- File a revised TDS return using RPU & FVU utilities via the TIN-NSDL website.
- Ensure the corrected statement reflects in your Form 26AS.
- Provide you with updated Form 16 or 16A for record.
It typically takes 7–15 days for the revised TDS to show up in your Form 26AS after processing.
Which One Should You Choose?
If the mismatch is due to:
- ITR entry error: File a revised return.
- Processing mistake: File a rectification under Section 154.
- Deductor’s error: Get them to revise their TDS filing.
- Missed deadline: File ITR-U (if eligible).
Being reactive without identifying the root cause can lead to further complications and interest accruals.
How to Respond to a TDS Mismatch Intimation Notice Online
Once you’ve identified the source of the mismatch and selected the right course of action, your next step is to formally respond to the TDS mismatch intimation notice. The Income Tax Department provides a structured online route through the e-Proceedings or outstanding demand sections of the e-Filing portal.
Responding within the prescribed timeline—usually 30 days from the date of issue—is critical to avoid demand becoming final or enforced.
Step-by-Step Guide to Respond via e-Filing Portal
Follow these instructions to submit your response:
- Log in to the Income Tax portal using your PAN and password.
- From the dashboard, click on e-Proceedings or go to Pending Actions > Response to Outstanding Demand.
- Identify the relevant notice or demand. Click Submit Response.
- Choose one of the following options:
- Demand is Correct
- Demand is Partially Correct
- Disagree with Demand
- Based on your selection, upload supporting documentation:
- For partial or full disagreement: updated Form 26AS, rectification request ID, revised ITR acknowledgement, or revised TDS certificate (Form 16/16A).
- Submit and download the acknowledgment for your records.
Once submitted, CPC will process the response. Keep checking the portal for updates under the “e-Proceedings” tab.
What Happens If You Don’t Respond?
Ignoring a TDS mismatch intimation doesn’t make it disappear—it worsens your case. If no action is taken within the stipulated time, the following consequences can occur:
| Inaction Consequence | Implication |
|---|---|
| Tax demand becomes final | The system assumes the mismatch is correct, and the tax becomes payable. |
| Interest under Section 220 | Delayed payment attracts simple interest at 1% per month. |
| Adjustment in next refund | Any future tax refund can be reduced or nullified against this demand. |
| Legal action | In extreme cases, persistent non-compliance can trigger further notices or even recovery proceedings. |
A timely response not only safeguards your refund eligibility but also prevents penalties from accumulating.
How Long Does Resolution Usually Take?
After submitting your response or filing rectification/revised return, the CPC typically takes 15–45 days to process the case. However, timelines can vary depending on the complexity and volume of returns being handled.
If no update is visible after 30 days, consider raising a grievance through the portal:
- Go to Grievances > Submit Grievance.
- Select Rectification/Outstanding Demand.
- Provide your acknowledgment number and details.
This prompts faster review, and grievance IDs can be tracked for status updates.
You can also refer to this detailed user guide on responding to outstanding demands published by the Income Tax Department.
When Should You Contact a Tax Consultant?
While individual taxpayers can often manage minor mismatches on their own, professional help is advisable in the following scenarios:
- Large demand amount without clear reason
- Complex salary, investment, or business income structures
- Error persists despite revised filings
- Multiple assessment years involved
A qualified tax consultant can review all documentation, file rectifications, and even draft submissions for appeals, if required. Their expertise can help you avoid common pitfalls and ensure a structured, timely response.
Understanding Interest and Penalties on TDS Mismatch
If you’ve received a TDS mismatch intimation notice and the demand raised is valid or partially correct, it's crucial to understand the financial consequences of inaction or delayed resolution. The Income Tax Act imposes interest and sometimes penalties under various sections depending on the nature and timing of the default.
Even if the mismatch wasn’t caused by you directly, once the demand is raised and accepted (either actively or by silence), the liability shifts to you until corrected.
Key Sections Governing Interest and Penalties
| Section | Provision | Implication for Taxpayer |
|---|---|---|
| 234A | Delay in filing return | Interest @1% per month from due date till filing |
| 234B | Advance tax shortfall (>10% of total tax) | Interest @1% per month from April 1 till payment |
| 234C | Delay in paying advance tax installments | Interest varies quarterly @1% |
| 220(2) | Delay in paying demand post notice | 1% per month simple interest after 30 days from notice date |
| 271C | Failure to deduct/pay TDS (in deductor’s case) | Penalty of amount equal to unpaid TDS |
So, even if the mismatch stemmed from the deductor’s side, failure to respond and get it rectified on time may lead to interest under Section 220(2), applicable from the expiry of the notice response period.
Example: Interest Calculation Scenario
Let’s say you received a TDS mismatch notice on May 10, and the demand amount is ₹38,500. If you don’t respond or pay within 30 days, interest under Section 220(2) starts accruing from June 11.
- Interest per month: ₹385
- Delay of 3 months: ₹1,155
- Total due: ₹38,500 + ₹1,155 = ₹39,655
This example demonstrates how seemingly small delays can snowball into a larger liability. You can refer to this CBDT circular on interest provisions for deeper clarity.
Can You Avoid These Penalties?
Yes—if the error is corrected proactively before processing, or if the revised return or rectification request is accepted and processed within the 30-day window, interest and demand may be nullified or waived.
Here’s how:
- Ensure Form 26AS is fully reconciled before filing ITR.
- Keep documentation like Form 16, TDS certificates, and AIS statements updated.
- Respond quickly using the e-Proceedings or Outstanding Demand tabs.
- Engage the deductor early if the error lies with them.
Being vigilant can save not just money, but also mental effort, especially during refund season.
What If the Demand Is Already Adjusted Against Refund?
Sometimes, if you delay or miss responding to the TDS mismatch notice, the demand amount is auto-adjusted against your tax refund. The Income Tax Department is empowered to do this under Section 245.
In such cases:
- The mismatch may still show as “resolved” but with your refund consumed.
- You can still file a rectification request under Section 154 and, if successful, the adjusted amount may be reissued.
To track refund adjustments, visit the TIN-NSDL Refund Status page.
Questions on TDS Mismatch Notices
The experience of receiving a TDS mismatch intimation notice can be confusing, especially for salaried employees and small business owners who depend on tax deductors to submit accurate information. Here are answers to some of the most frequently asked questions, aimed at resolving doubts with clarity and confidence.
Can I ignore a small mismatch amount?
No. Even if the mismatch is for a small sum, the Income Tax Department’s systems process notices automatically. Ignoring even a minor demand may result in interest accumulation or adjustment against your future refunds. It’s advisable to respond and correct the mismatch at the earliest.
What if I have multiple Form 16s and TDS is not matching?
If you've switched jobs during the year and received multiple Form 16s, there's a higher chance of reporting inconsistencies. Employers may use different reporting schedules, or miss uploading TDS details. In such cases:
- Check if all employer entries are reflected in your Form 26AS.
- Match the TAN of each employer with what’s mentioned in the ITR.
- Use consolidated figures when revising ITR or submitting a rectification.
If any employer hasn’t deposited TDS or used incorrect details, follow up immediately and request them to file a revised TDS return via the TRACES platform.
How to respond if I disagree with the TDS demand?
If the demand is incorrect, go to the e-Filing portal > Pending Actions > Response to Outstanding Demand, select Disagree with Demand, and upload the necessary documents:
- Updated Form 26AS
- Employer's revised TDS confirmation or Form 16
- ITR acknowledgment
- Rectification request ID, if already filed
This will help support your disagreement and prevent the demand from becoming final.
Is it mandatory to file a revised return for mismatch?
Not always. Filing a revised ITR is only required if the error was on your part (e.g., over-reporting TDS or under-reporting income). If the mismatch is due to a system issue or deductor’s delay, filing a rectification request under Section 154 may be more appropriate.
The Central Board of Direct Taxes (CBDT) has clarified via notifications that rectification can be used where return data is accurate but processing resulted in errors. You can read more in this CBDT FAQ on rectifications.
Can I file a grievance if there’s no resolution after rectification?
Yes. If you've filed a rectification or response and there’s been no update for over 30–45 days, you can raise a formal grievance through:
- e-Filing portal > Grievances > Submit Grievance
- Choose Income Tax Processing / Rectification as category
- Mention your acknowledgement number and provide a brief description
You’ll receive a Grievance ID to track the progress. This often escalates the matter and prompts faster resolution.
Will I be penalised even if the deductor was at fault?
Unfortunately, yes—if the issue isn’t corrected in time. The system assumes data reflected in Form 26AS is final. Unless the deductor revises the TDS return and it reflects in your account, the demand remains enforceable. That’s why timely coordination with the deductor is essential.
What documents should I keep to defend my case?
Maintaining a clean and well-organised record can make a significant difference when responding to a TDS mismatch notice. Keep the following on hand:
- Form 16 or Form 16A from all deductors
- Form 26AS and AIS for the relevant year
- Salary slips (especially if TDS deducted monthly)
- Acknowledged copies of ITR (original and revised, if any)
- Emails or letters sent to deductors for follow-up
- TRACES screenshot showing deduction status
These documents may be required for rectification requests, appeals, or even during scrutiny.
How to Prevent TDS Mismatch Issues in Future
While resolving a TDS mismatch intimation notice is crucial, the best long-term approach is to avoid such situations altogether. By following certain practices throughout the financial year—not just at return-filing time—you can significantly reduce the chances of mismatch, incorrect demand, and refund delays.
Best Practices to Stay TDS-Accurate
Here are practical steps every taxpayer should follow to maintain accurate TDS records:
| Preventive Step | Why It Matters |
|---|---|
| Check Form 26AS quarterly | Early detection of missing or incorrect entries |
| Verify PAN with employer/bank | PAN errors are one of the leading causes of mismatch |
| Collect TDS certificates on time | Form 16/Form 16A is essential for reconciliation |
| Don’t rush to file ITR | Wait until all TDS entries reflect correctly in Form 26AS |
| Track AIS (Annual Information Statement) | Helps match TDS and income entries from all sources |
| Communicate regularly with deductors | To ensure they file TDS returns correctly and on time |
You can now access and download your Annual Information Statement (AIS) directly from the AIS portal. It offers a broader view than Form 26AS by including interest income, securities transactions, and more.
TDS Compliance Checklist Before Filing Your ITR
Before clicking ‘Submit’ on your income tax return, go through this simple checklist:
- ✅ Match salary or income figures with Form 16/16A
- ✅ Ensure all TDS entries in Form 26AS are accounted for in your ITR
- ✅ Verify your PAN details with your employer, bank, and mutual fund companies
- ✅ Download and check AIS for any additional income sources
- ✅ Check for duplicate or missing entries—especially with multiple employers
- ✅ Avoid auto-importing TDS data blindly—cross-verify
These checks take just a few minutes but can save weeks of unnecessary correspondence and legal rectifications.
What Should Deductors Be Doing?
If you're running a business or are responsible for TDS deductions (e.g. as a company, partnership, or even an HUF), your compliance ensures your deductees don’t suffer. Key obligations include:
- Filing TDS returns within due dates under Rule 31A
- Issuing Form 16/16A accurately and timely
- Updating PAN and TAN records regularly
- Using correct section codes while filing TDS returns
For TDS returns filing timelines and penalties, you can refer to the NSDL TDS return filing guide.
Use of Technology to Stay Updated
Several fintech platforms and tax filing software offer real-time TDS reconciliation tools. They can pull data from TRACES, Form 26AS, AIS, and bank interest records to show any discrepancies before you submit your return.
Additionally, linking your Aadhaar and PAN, and regularly updating your email/mobile on the e-Filing portal, ensures you receive alerts and notices in time.
You can also subscribe to updates and circulars from the Central Board of Direct Taxes (CBDT) to stay aware of any rule changes regarding TDS, notices, and filing deadlines.
Final Takeaways: How to Stay Safe from TDS Mismatch Intimation in FY 2024–25
Getting a TDS mismatch intimation notice can feel overwhelming, but a calm, informed response backed by the right documentation and prompt action can resolve it without financial or legal stress. Better still, if you’re proactive with compliance and communication, you can entirely avoid such notices in the first place.
Summary Checklist for Taxpayers
To conclude this comprehensive guide, here’s a quick end-to-end checklist that will help you avoid mismatches and deal with any notices smoothly.
| ✅ Action Step | 🕒 When to Do It |
|---|---|
| Check Form 26AS and AIS | Quarterly and before ITR filing |
| Collect all Form 16/16A | From employers, banks, and others after TDS deduction |
| Compare TDS claimed in ITR vs Form 26AS | Before final submission of return |
| Respond to TDS mismatch notice | Within 30 days from issue date |
| File revised return or rectification | If mismatch confirmed |
| Track response via e-Filing portal | Weekly after submission |
| Raise grievance if no resolution | After 30–45 days of inaction |
| Ensure future compliance by deductors | Especially for job switchers or freelancers |
Even taxpayers who follow every rule can still get a mismatch notice due to system or deductor errors. That’s why timely awareness and resolution are your best tools.
For Professionals and Freelancers
Freelancers, consultants, and professionals often receive TDS under various sections (e.g. 194J, 194C), which makes reconciliation even more critical. It’s advisable to:
- Maintain a TDS ledger throughout the year.
- Get TDS certificates from clients.
- Regularly verify that client-reported deductions reflect in your Form 26AS.
Failing to do so could result in higher tax demand notices despite tax already being deducted at source. For better planning, refer to the current TDS rates under different sections.
What If You’ve Already Paid the Demand?
If you’ve already paid a demand raised due to TDS mismatch but later find the error wasn’t on your part, you may be eligible to file a refund claim by:
- Filing a rectification request and correcting your records.
- Once rectified, submitting a refund reissue request via the portal.
- Attaching all relevant proofs, including revised Form 26AS or revised ITR.
For detailed assistance, you may also use the official refund reissue module to raise and track requests.
Building a Habit of Tax Awareness
Being tax-aware is no longer optional. With automated processing, advanced analytics, and cross-verification tools used by the Income Tax Department, your financial footprint is monitored with increasing accuracy.
Make tax planning a part of your financial habit—not just a year-end rush. That includes:
- Filing on time
- Tracking deductions
- Staying informed about income reporting norms
- Using official portals for validation
This not only protects you from TDS mismatch notices but also maximises refund accuracy and reduces compliance burden.
FAQ
What is a TDS mismatch intimation notice?
It is a notice from the Income Tax Department informing you that the TDS reported in your ITR doesn't match Form 26AS or AIS data.
Is a TDS mismatch notice a penalty?
No, it's not a penalty. It's an intimation of a discrepancy. You must respond or correct it to avoid further demand or interest.
How do I respond to a TDS mismatch online?
Log in to the Income Tax e-filing portal, go to 'Pending Actions > Response to Outstanding Demand', and submit the necessary documents or correction.
What if my employer made the mistake?
If your employer filed incorrect TDS details, request them to revise their TDS return. The corrected details will reflect in Form 26AS.
Can I file a revised return to fix a TDS mismatch?
Yes. If the mismatch is due to incorrect TDS claimed in your ITR, you should file a revised return before the deadline under Section 139(5).
What is the time limit to respond to a TDS mismatch notice?
You usually have 30 days from the date of issue to respond to a mismatch notice under Section 143(1).
Will interest apply on TDS mismatch demand?
Yes. If demand is unpaid beyond 30 days, interest under Section 220(2) at 1% per month may be levied until resolution.
What if my refund was adjusted due to mismatch?
You can still file a rectification or appeal if the mismatch was due to error. If accepted, your refund may be reissued.
Can I get professional help to resolve the notice?
Yes. A tax consultant can help review your case, communicate with deductors, file rectifications, or represent you if needed.
How can I avoid TDS mismatch in future?
Check Form 26AS regularly, collect Form 16/16A from all deductors, verify AIS, and cross-check before filing your ITR.
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