A TDS mismatch notice comes when the TDS you claimed in your income tax return does not match the TDS shown against your PAN in Form 26AS. The Centralised Processing Centre (CPC) gives credit only for what appears in Form 26AS, so the gap turns into a tax demand or a smaller refund in the Section 143(1) intimation. This guide explains why TDS mismatches happen, how to find the cause, how to reply on the e-filing portal, and how you or your employer can fix the error, with worked examples for AY 2026-27.
Quick answer: download Form 26AS and compare it with your Form 16 / 16A and your ITR. If the deductor (employer, bank, tenant) made the error, ask them to file a TDS correction statement; once the credit shows in Form 26AS, file a rectification under Section 154. If you made the error, file a revised return. Reply to the notice within 30 days on the e-filing portal, and don't ignore it: unpaid demand carries interest of 1% a month and can be adjusted against future refunds.
Which Law Applies to Your Notice in 2026?
The Income-tax Act, 2025 came into force on 1 April 2026, but the old law still governs your notice for now. As the Income Tax Department's transition FAQs explain, returns for FY 2025-26 (AY 2026-27) and earlier years are governed by the Income-tax Act, 1961, and proceedings on them continue under that Act. So for the notices being issued in 2026:
| What | Returns up to AY 2026-27 (1961 Act) | Tax year 2026-27 onwards (2025 Act) |
|---|---|---|
| Processing and intimation | Section 143(1) | Section 270 |
| Rectification of mistake | Section 154 | Section 287 |
| Revised return | Section 139(5) | Section 263(5) |
| Updated return (ITR-U) | Section 139(8A) | Section 263(6) |
| TDS credit statement | Form 26AS | Form 168 |
| Salary TDS certificate / return | Form 16 / Form 24Q | Form 130 / Form 138 |
| Non-salary TDS certificate / return | Form 16A / Form 26Q | Form 131 / Form 140 |
The first returns under the new Act are for tax year 2026-27, filed in 2027. This guide uses the 1961 Act sections because those are the ones printed on notices today.
Two Kinds of TDS Mismatch Notice
- Proposed adjustment under Section 143(1)(a): sent before processing when the income in your ITR does not match Form 26AS, Form 16 or Form 16A (for example, salary in the ITR lower than gross salary in Form 26AS). You get 30 days to agree or disagree. If you don't reply, the adjustment is made.
- Intimation under Section 143(1) with a demand: sent after processing when TDS credit claimed is more than what Form 26AS shows. The CPC allows only the TDS in Form 26AS, so the difference becomes tax payable. The intimation counts as a notice of demand.
Both reach your registered email and appear on the income tax e-filing portal under Pending Actions. The intimation PDF opens with a password: your PAN in lowercase followed by your date of birth in DDMMYYYY format.
Common Reasons for a TDS Mismatch
| Reason | What you see | Who fixes it |
|---|---|---|
| Deductor did not file the TDS return for a quarter | TDS in Form 16 / 16A but not in Form 26AS | Deductor |
| Wrong PAN entered by the deductor | TDS missing from your Form 26AS (it shows under someone else's PAN) | Deductor |
| Deductor deducted but did not deposit TDS | Amount in Form 16 / 16A but not in Form 26AS | Deductor (see protection below) |
| Wrong section or amount in the TDS return | Different amount in Form 26AS | Deductor |
| Wrong TAN or amount entered by you in the ITR | Claim does not match any entry | You |
| TDS claimed without showing the income | Credit disallowed (for example, FD interest TDS claimed but interest not reported) | You |
| TDS of another year claimed | Credit belongs to an earlier or later year | You |
| Two employers in the year, previous employer's TDS missed or double-counted | Salary or TDS does not match Form 26AS | You (and the employer, if their filing is wrong) |
Under Rule 37BA, TDS credit is given for the year in which the related income is taxed, based on what the deductor reports. That is why showing the income and matching Form 26AS both matter.
How to Check the Mismatch in Form 26AS
- Log in to the e-filing portal and go to e-File → Income Tax Returns → View Form 26AS. You are taken to the TRACES site.
- Choose the assessment year printed on your notice (AY 2026-27 for FY 2025-26) and download the statement.
- Compare each TDS entry with your Form 16 / 16A and with the TDS schedule in your ITR: deductor TAN, amount paid, TDS amount and section.
- Check the Annual Information Statement (AIS) as well. If an entry there is wrong, you can give feedback on it from the AIS screen.
- Read the intimation's TDS computation: it shows the credit you claimed and the credit allowed for each TAN, so you can see exactly which entry caused the gap.
New to how employers work out salary TDS? Read our TDS on salary guide.
How to Reply to a TDS Mismatch Notice Online
For a proposed adjustment (Section 143(1)(a))
- Go to Pending Actions → e-Proceedings and open the notice for adjustment under Section 143(1)(a).
- For each variance, click Provide Response and choose to agree or disagree. When you disagree, give a short reason (for example, "salary in Form 26AS includes exempt allowances shown in Schedule S").
- Submit and e-verify. Do this within 30 days.
For a demand in the Section 143(1) intimation
- Go to Pending Actions → Response to Outstanding Demand.
- Choose Demand is correct, Demand is partially correct or Disagree with demand.
- When you disagree, pick the reason, such as demand already paid (with challan details), rectification or revised return filed, or appeal filed, and upload proof.
- Submit and keep the acknowledgement.
Choose "Demand is correct" only if you really owe the tax. Once you accept a demand, you cannot disagree with it later through this screen.
How to Fix a TDS Mismatch
If the deductor made the error
- Send the deductor your PAN, the assessment year and the missing amount, with a copy of your Form 16 / 16A and the intimation.
- Ask them to file a TDS correction statement on TRACES. For quarters of FY 2025-26, corrections are filed in the old Forms 24Q / 26Q even after 1 April 2026.
- Wait until the correct credit appears in your Form 26AS.
- Then file a rectification request under Section 154: Services → Rectification, choose "Reprocess the return" (or the tax credit mismatch option), and submit. The CPC reprocesses the return with the corrected credit.
TDS deducted but not deposited: CBDT office memorandum F.No. 275/29/2014-IT(B) dated 1 June 2015, reiterated on 11 March 2016, says the deductee should not be asked to pay a demand to the extent tax was deducted from their income, even if the deductor did not deposit it. Keep proof of deduction, such as payslips, Form 16 and the deductor's ledger, and share it with your Assessing Officer if recovery is pressed.
If you made the error
- Revised return under Section 139(5): for AY 2026-27, you can revise by 31 December 2026 without a fee, and up to 31 March 2027 with a fee of ₹1,000 (income up to ₹5 lakh) or ₹5,000 (above ₹5 lakh). Correct the TDS schedule and report all income.
- Rectification under Section 154: use it for a mistake apparent from the record, once the right details are on record.
- Updated return (ITR-U) under Section 139(8A): available for up to 48 months from the end of the assessment year, with additional tax of 25% to 70%. It can only increase tax, so it does not help you claim missing TDS credit. Use it only if you left out income.
Worked Examples
| Case | Claimed in ITR | In Form 26AS | Result | Fix |
|---|---|---|---|---|
| Employer missed filing the Q4 (Jan–Mar 2026) TDS return | ₹62,000 | ₹46,500 | Demand of ₹15,500 plus interest, if any | Employer files the Q4 statement → you file rectification |
| Bank quoted a wrong PAN on FD interest TDS | ₹4,800 | Nil | Credit of ₹4,800 disallowed | Bank files a PAN correction → you file rectification |
| Job change: previous employer's TDS entered twice | ₹90,000 | ₹60,000 | Demand of ₹30,000, which is correct | Pay it, or revise if the window is open and other figures are also wrong |
| FD interest TDS claimed, interest not reported | ₹2,000 | ₹2,000 | Credit not allowed because the income is missing | Revised return showing the interest income |
Interest and Refund Adjustment if You Don't Act
- Interest under Section 220(2): if a demand is not paid within 30 days of the notice, simple interest of 1% for every month or part of a month is charged until payment.
- Refund adjustment under Section 245: the department can set off the demand against a future refund. You get an intimation first and can reply under Response to Outstanding Demand.
- Interest under Sections 234B and 234C may also be part of the demand if the reduced TDS credit leaves too little tax paid in advance.
Example: an intimation dated 10 June 2026 raises a demand of ₹38,500. The 30 days end on 10 July 2026. If you pay on 15 September 2026, interest runs from 11 July for 3 months (the last part-month counts as full): ₹38,500 × 1% × 3 = ₹1,155, so you pay ₹39,655. If the demand is wrong, reply and file a rectification instead of paying.
If Nothing Happens After You Reply
- Track the rectification under Services → Rectification → View filed requests.
- If your refund was adjusted wrongly or failed, use Services → Refund Reissue after the correction.
- Raise a grievance under Grievances → Submit Grievance, quoting your acknowledgement number.
- If the demand comes from an assessment order rather than processing, the remedy may be an appeal to the Commissioner (Appeals).
How to Avoid a TDS Mismatch Next Year
- Check Form 26AS and AIS before you file. From tax year 2026-27, check the new Form 168.
- Make sure every employer, bank and tenant has your correct PAN, and that your PAN is linked to Aadhaar.
- If you changed jobs, give your new employer your previous employer's salary and TDS details so the full-year TDS is correct.
- Report all income on which TDS was deducted, including FD and savings interest.
- Claim TDS for the right year, as shown in the certificate.
- Cross-check your employer's TDS with our TDS on salary calculator and your full tax with the income tax calculator.
For TDS rates by payment type, see our TDS rate chart FY 2026-27. If you pay rent above ₹50,000 a month, read TDS on rent. Official guidance is on the Income Tax Department website and the TRACES portal.
Frequently Asked Questions
What is a TDS mismatch notice?
It is a communication from the CPC that the TDS or income in your return does not match Form 26AS, Form 16 or Form 16A. It comes either as a proposed adjustment under Section 143(1)(a) or as a demand in the Section 143(1) intimation.
Why is my TDS not showing in Form 26AS?
Usually because the deductor has not filed the TDS return for that quarter, quoted a wrong PAN, or did not deposit the tax. Ask the deductor to file a correction statement on TRACES.
How do I reply to a TDS mismatch notice?
For a proposed adjustment, use Pending Actions, then e-Proceedings, and agree or disagree with each variance. For a demand, use Pending Actions, then Response to Outstanding Demand, and choose correct, partially correct or disagree with proof.
What is the time limit to respond?
30 days from the notice for a proposed adjustment under Section 143(1)(a). For a demand, interest of 1% a month starts if it is not paid or disputed within 30 days.
My employer deducted TDS but Form 26AS shows less. What should I do?
Ask the employer to file the missing or corrected TDS statement. Once Form 26AS shows the right credit, file a rectification request under Section 154 so the return is reprocessed.
Do I have to pay if the deductor did not deposit the TDS?
Under CBDT instructions of 1 June 2015 and 11 March 2016, the deductee should not be asked to pay the demand to the extent tax was deducted from their income. Keep proof such as Form 16 and payslips.
Should I file a revised return or a rectification?
File a revised return if the mistake is in your ITR, such as wrong TDS or missing income. File a rectification if your ITR was right and the credit now shows correctly in Form 26AS after the deductor's correction.
What is the last date to revise the return for AY 2026-27?
31 December 2026 without a fee, and up to 31 March 2027 with a fee of ₹1,000 (income up to ₹5 lakh) or ₹5,000 (above ₹5 lakh).
Can my refund be adjusted against a TDS mismatch demand?
Yes. Under Section 245, the department can set off an outstanding demand against a refund after sending you an intimation. Reply through Response to Outstanding Demand if the demand is wrong.
Is Form 26AS replaced under the new Income-tax Act?
From tax year 2026-27, the annual statement is Form 168 under the Income-tax Act, 2025. For FY 2025-26 and earlier years, Form 26AS still applies.