You open your income tax intimation expecting a refund. Instead, the refund is smaller—or there is an unexpected tax demand. Your employer's Form 16 shows ₹45,000 in TDS, but the department has given you credit for only ₹35,000. Where did the other ₹10,000 go?
That is a TDS mismatch. Sometimes the deductor has filed the wrong PAN or has not corrected a TDS statement. Sometimes the tax credit is already in Form 26AS, but the TDS schedule in your return is wrong. These situations need different solutions. Do not pay a disputed demand or submit an incorrect rectification just to clear an alert.
This TaxQue guide shows how to check the difference, approach the deductor, respond to the correct type of notice, and track your tax credit. The steps are based on the Income Tax Department's official tax-credit mismatch guidance Official ↗.
Start here: Download your filed ITR, Form 16/16A, Form 26AS, AIS and any CPC intimation for the relevant year. A mismatch on a proposed adjustment, an already processed return, and an outstanding demand require different portal actions.
What is a TDS mismatch notice?
TDS (tax deducted at source) is tax deducted from certain payments—such as salary, professional fees or bank interest—and reported against your PAN. Your income tax return claims credit for that tax. A mismatch arises when the credit claimed in your ITR differs from the tax-credit information available to the department.
A mismatch is not automatically proof of tax evasion. But it can affect the computation of tax payable or refundable when a return is processed.
Three communications that people often call a 'TDS mismatch notice'
| Communication | What it means | What to do first |
|---|---|---|
Proposed adjustment under section 143(1)(a) of the 1961 Act | CPC proposes an adjustment before processing the return | Read the proposal and respond within the prescribed window if you disagree |
Intimation under section 143(1) | Your return has been processed; the credit may have been restricted, reducing the refund or creating demand | Compare ITR, Form 26AS and CPC computation; consider rectification if appropriate |
Outstanding demand / section 245 communication | A demand exists or the department proposes adjusting a refund against an outstanding demand | Respond to the demand with evidence; separately correct the underlying error |
For the first type, the time available for responding under the old Act is normally 30 days from issue of the proposed adjustment. Always follow the actual date and directions shown on the notice. The Department's e-Proceedings guidance Official ↗ explains where to view and respond to communications.
The Income-tax Act, 2025 applies to Tax Year 2026–27 onward. For earlier income years, notices can still refer to the Income-tax Act, 1961. In the newer portal guidance, a prima facie adjustment is described under section 270(1)(a) of the 2025 Act, rather than section 143(1)(a) of the earlier Act. Check the year printed on your document rather than assuming the same section applies to every notice.
How to check a TDS mismatch online: the quickest method
The official e-Filing portal Official ↗ provides a dedicated Tax Credit Mismatch service. You can compare the amount claimed in your filed return with the amount available in tax-credit records without guessing from the demand figure.
Check the mismatch on the official portal
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Log in
Open incometax.gov.in Official ↗ and sign in to the taxpayer account for the correct PAN.
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Open the service
Select Services → Tax Credit Mismatch on the dashboard.
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Choose the year
Select the applicable Assessment Year or year shown by the portal, then submit.
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Compare the entries
Review the TDS, TCS and other tax-credit amounts claimed versus reported.
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Download a record
Save the available PDF or XLS mismatch report and note the deductor TAN, amounts and year.
The Income Tax Department describes this exact path in its Tax Credit Mismatch User Manual Official ↗. Also download Form 26AS and AIS for the relevant period and compare them with Form 16, Form 16A, salary slips and your filed ITR.
A simple TDS reconciliation example
Assume you filed a return claiming ₹45,000 of TDS based on an employer certificate, while your Form 26AS shows only ₹35,000.
| Record | TDS amount |
|---|---|
| Form 16 or employer's statement | ₹45,000 |
| TDS claimed in the ITR | ₹45,000 |
| TDS currently reflected in Form 26AS | ₹35,000 |
| Amount requiring investigation | ₹10,000 |
This does not establish that ₹10,000 of additional tax is legally payable by you. First confirm whether the amount was actually deducted, deposited and correctly reported, then identify the correction route. These figures are a hypothetical example.
Why does Form 26AS show less TDS than Form 16 or your return?
| Possible cause | What to check | Likely next step |
|---|---|---|
Deductor has not filed its TDS statement | Form 16/16A, deductor's filing confirmation, Form 26AS | Ask the employer, bank or client to file the required statement |
Incorrect PAN quoted | PAN on employer/client payroll records and filed TDS details | Request a deductor correction statement |
Wrong amount or TAN in your ITR | TDS schedule of the filed return compared with 26AS | Revise the return if eligible or seek suitable rectification after processing |
Credit posted to the wrong year | Payment date, income year, Form 26AS and ITR schedules | Reconcile the year of income and request correction if necessary |
TDS return corrected but not yet reflected | Deductor correction acknowledgement and latest 26AS | Recheck official records before submitting a correction request |
TDS was deducted but not deposited | Salary slips, Form 16, bank credit and deductor confirmation | Request deductor compliance and assess protection against duplicate recovery |
AIS and other records seem inconsistent | AIS feedback, Form 26AS, actual income evidence | Reconcile information; feedback alone does not amend a deductor's TDS statement |
Important: Two employers using the same basic-exemption assumptions can cause a tax shortfall even if both employers reported TDS correctly. That is different from a missing TDS credit. Likewise, a mismatch between reported income and AIS is not necessarily a TDS-credit mismatch.
How to fix a TDS mismatch: choose the right route
1. If the employer, bank or client reported the deduction incorrectly
Start with the deductor. Send them the relevant PAN, financial year, payment details, TDS amount and copy of the certificate or payslip. Request that they examine the filed statement and submit the required TDS correction statement if their reporting is wrong.
The deductor—not the taxpayer—usually has to correct its own TDS statement. The Income Tax Department explicitly recommends contacting the employer or other deductor for an incorrect tax credit in its Tax Credit Mismatch FAQs Official ↗.
Keep a dated copy of your request and any correction acknowledgement. Do not promise yourself a fixed turnaround: updates depend on the deductor's filing and processing.
2. If you made an error in the filed ITR
Check the TAN, name of deductor, TDS amount and year against your actual certificates and Form 26AS. An error in the return itself may be addressed through a revised return, if the applicable revision window is open, or through a rectification request for a mistake apparent from the processed record.
The choice is not based merely on which option seems faster:
- Revised return: used to correct an eligible filed return within the lawful period, including mistakes not confined to tax credit.
- Rectification: generally used after processing to correct an apparent mistake; it is not a substitute for a full revised return or a way to add new income or deductions.
- Tax Credit Mismatch Correction: a rectification option for eligible corrections to TDS, TCS and tax-payment schedules. It should not be used to invent a credit that is absent from official records.
Follow the Department's Rectification FAQ Official ↗ and our revised ITR guide before choosing.
3. If the return has already been processed
When the intimation restricts a valid TDS credit, first establish why. If the deductor's correction has updated the record, the relevant processed return may be eligible for a rectification or reprocessing request.
Request tax-credit rectification when appropriate
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Open Rectification
Log in at incometax.gov.in Official ↗ and choose Services → Rectification.
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Create a request
Select New Request and the year and order relevant to the processed return.
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Select the appropriate option
Where available and applicable, choose Tax Credit Mismatch Correction, or the appropriate reprocessing option.
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Review all TDS entries
Check the prefilled entries and supply the corrected details supported by your records.
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Submit and track
Save the acknowledgement and review Rectification Status for the result.
This process is described in the Income Tax Department's Rectification User Manual Official ↗. The exact request types depend on the year, processing order and portal eligibility. A rectification request can be rejected; it does not automatically cancel an outstanding demand.
How to respond to a TDS mismatch notice or outstanding demand
When CPC proposes an adjustment before processing
Visit Pending Actions → e-Proceedings → For Your Action on the e-Filing portal Official ↗, open the relevant communication and compare the figures before selecting your response. If you disagree, state the disputed tax credit and the documentary reason, and attach evidence if the response facility allows it. Save the submitted acknowledgement.
Do not confuse an adjustment proposal with a final order. The Department says submitted e-Proceedings responses cannot be edited after submission. Review every number and attachment first. Official e-Proceedings FAQ Official ↗.
When an outstanding demand already exists
Open Pending Actions → Response to Outstanding Demand. Select the demand and choose the appropriate response: demand correct, already paid, or disagree in full or in part. Provide the prescribed reason and supporting information. If you agree with only part of the demand, address the undisputed portion separately.
A response is important, but do not assume choosing 'disagree' permanently blocks recovery or refund adjustment. Track the response and follow the required rectification, representation or appeal process. The official outstanding-demand manual Official ↗ explains these options.
How to know whether the notice is genuine
Use the Authenticate Notice/Order Issued by ITD service on the portal homepage. You can verify using the Document Identification Number (DIN) and mobile OTP, or the alternative details offered. Avoid opening links from unsolicited messages when you can navigate to the department's official website directly. Official notice-authentication manual Official ↗.
TDS was deducted but not deposited: do you have to pay it again?
This is the situation that often causes the greatest concern. Imagine ₹10,000 was actually withheld from your salary, but the employer failed to deposit or correctly report it. Should you immediately pay ₹10,000 again to remove the demand?
Not automatically. For periods governed by the Income-tax Act, 1961, section 205 Official ↗ bars direct recovery from the taxpayer to the extent tax was actually deducted from that income. Your proof of deduction matters: Form 16, salary slips, payment records, correspondence and bank entries may be relevant.
However, that protection does not mean every CPC mismatch instantly disappears or that every disputed demand is automatically cancelled. You may need to ask the deductor to comply, file an appropriate response and seek departmental or professional assistance. Apply the law relevant to the particular tax year, including the post-1 April 2026 legislative transition.
Avoid paying a potentially duplicated tax demand without reconciling the evidence. Equally, do not ignore the notice because you believe the deductor is responsible. Respond within the deadline and preserve documents showing that the tax was actually deducted.
AY 2026–27 versus Tax Year 2026–27: the recordkeeping change
India's transition to the Income-tax Act, 2025 changes some terminology and reporting references.
| Period | General reference | Tax-credit information |
|---|---|---|
FY 2025–26 / AY 2026–27 | Income-tax Act, 1961 and earlier assessment-year framework | Form 26AS and AIS for AY 2026–27 |
FY 2026–27 / Tax Year 2026–27 | Income-tax Act, 2025 framework | Department guidance identifies Form No. 168 for the new year's annual information statement |
The Income Tax Department warns that transition-period TDS mismatches can arise from the wrong tax year, assessment year or deduction-section reference in deductor filings. Refer to the official TDS Compliance FAQ Official ↗ for the current transition rules. Always select the correct year before comparing records.
Documents to collect before replying
| Document | Why it helps |
|---|---|
| Form 16 / Form 16A | Shows reported deduction by employer or other deductor |
| Salary slips, client invoice and bank credits | Helps establish what was actually withheld and paid |
| Form 26AS and relevant AIS / Form 168 | Shows recorded TDS information for the applicable period |
| Filed ITR and TDS schedules | Confirms how much credit you claimed and under which TAN |
| CPC intimation or notice | Identifies the type of proceeding, year, due date and disputed adjustment |
| Deductor emails or correction acknowledgement | Helps demonstrate steps taken to correct reporting |
| Rectification acknowledgement or demand-response ID | Helps track the department's subsequent action |
For a larger disagreement, prepare a short table for each deductor showing deducted, reflected, claimed and difference. This is much easier to review than a bundle of unlabelled screenshots.
Common mistakes that delay TDS mismatch resolution
- Filing a rectification before checking Form 26AS. If the tax is missing because the deductor filed incorrectly, taxpayer rectification alone may not solve the root cause.
- Treating a proposed adjustment as an outstanding demand. Different communications have different response workflows.
- Assuming an AIS feedback submission updates TDS. The deductor may still need to correct the underlying statement.
- Using the wrong year. A TDS credit can relate to an income year different from the year in which an entry appears; investigate the applicable credit rules.
- Uploading mismatched evidence. TAN, PAN, amount, financial year and certificate should tell the same story.
- Ignoring a demand after submitting a correction request. Follow both the return-processing record and the demand status until the discrepancy is actually resolved.
- Relying on unofficial emails or links. Authenticate communications on the e-Filing portal.
How to avoid another TDS mismatch next filing season
Reconcile Form 16/16A with official tax-credit records before submitting the return. Give each employer, bank and client your correct PAN, and follow up when expected entries are missing. Check new or corrected deductor statements again before filing and retain correspondence for any unresolved deduction.
Also distinguish a tax shortfall from a tax-credit mismatch. If the deduction was correctly reported but total tax on your combined income is higher, the problem is not fixed by increasing the claimed TDS.
For related guidance, read TaxQue's section 143(1) intimation guide, income tax notice guide and refund-status guide.
The bottom line: find the missing credit before choosing a remedy
A TDS mismatch can begin with a small typing error or with a deductor's incomplete return. The fix depends on what the official records show, whether the original return is processed, and which notice you have received. Start with the tax-credit comparison, obtain correction from the responsible party where necessary, and choose revision, rectification or demand response only after the cause is clear.
If your mismatch has caused a reduced refund or an outstanding demand, TaxQue's income tax notice resolution service can help you review the records, organise evidence and determine the appropriate response route.
Get help with a TDS mismatch notice
Official sources and further reading
- Income Tax Department: Tax Credit Mismatch — FAQ Official ↗
- Income Tax Department: Tax Credit Mismatch — User Manual Official ↗
- Income Tax Department: Rectification Request — User Manual Official ↗
- Income Tax Department: e-Proceedings Official ↗
- Income Tax Department: Outstanding Demand — User Manual Official ↗
- Income Tax Department: Section 205, Income-tax Act, 1961 Official ↗
- Income Tax Department: TDS Compliance and 2025 Act Transition Official ↗
Editorial review: 17 October 2026. Applicable provisions and portal workflows should be reconfirmed for the tax year and notice actually received. This guide provides general information, not an outcome guarantee.
