TDS mismatch in ITR 2026: How taxpayers can claim credit, file rectification and respond to notices

Reasons for TDS mismatch

First, let's look at why a TDS mismatch may happen.

The CBDT has highlighted that such tax credit mismatches may happen due to the following reasons:

• Invalid/incorrect TAN of deductor

• Furnishing the same TAN for more than one deductor

• Filing information in wrong TDS Schedules in the return form

• Furnishing wrong challan particulars regarding advance tax, self-assessment tax, etc.

• Tax deducted by one deductor is wrongly included in the amount of tax deducted by another deductor.

In the above cases, the tax credit is not allowed to the taxpayers while processing returns even as the tax credit is available in the Form 26AS.

What to do?

Taxpayers should verify if the demand raised is due to tax credit mismatch on account of incorrect particulars (listed above) and submit rectification requests with correct particulars of TDS/tax claims for correction of these demands.

According to Taxmann, taxpayers can follow the below steps for making an online rectification request:

• Return Data Correction (Offline)

• Tax Credit Mismatch Correction

• Reprocess the Return

In case the TDS mismatch is due to an error in the TDS return filed by the deductor, the taxpayer should approach the deductor to rectify the TDS return.

How to claim TDS credit in ITR if not deposited by the deductor

In this case, you should approach the deductor and request to deposit TDS with the Government and file a TDS statement.

In case the deductor refuses the request, you can submit TDS proof to the Income-tax Department.

As you cannot attach any supporting documents with the ITR, you should first file the return, claim TDS credit, and wait for its processing. After processing, you will receive a notice of a TDS mismatch.

Upon receiving such notice, you can file a reply and supporting documents showing that the TDS was duly deducted from your income. You can submit supporting documents like salary slips to support your claim. You can also submit the bank statement showing credit for your net salary/other income after the deduction of TDS.

"AO may allow the taxpayer a TDS credit if the documents submitted are found correct and cancel the demand raised by the CPC. However, if he does not allow the TDS credit, the taxpayer's only option is to approach the Court," the report says.