Matching Form 26AS & Form 16

According to the Income Tax Act, 31st July is the last day for filing an income tax return for the specified categories of person.

Section 234F of the Act mentions that in case of delay in the filing of income tax returns, the person who is in default is liable to pay late filing fees of INR 5,000. Form 16 or Form 16A is a tax credit statement mentioning the deduction of tax from the income of an individual or company, respectively. Form 26AS, on the other hand, is generated by the income tax department on the basis of tax deducted from the individual or company and deposited with the income tax department. In recent times, taxpayers are making the observation that as part of the assessment procedure, system-generated demand notices are forwarded by the income tax department, wherein the income tax return details available in the return filed by the taxpayer are not matching with the details contained in Form 16 or Form 16A or Form 26AS. In order to overcome this challenging situation, the Government has introduced certain amendments in the Income Tax Act. The amendments have brought about new provisions in the Act, which are contained in Section 143(1)(vi). The amendments have been made effective with effect from 1st April 2017. The provisions of Section 143(1)(vi) of the Income Tax Act, 1961, provides that total income or loss shall be computed after making an adjustment of the addition of income appearing in Form 26AS or Form 16 or Form 16A which has not been included in computing the total income in the return.

Section 143

CBDT has issued instruction no. 9/2017 dated 11.10.2017 and instruction no. 10/2017 dated 15.11.2017 providing instances where section 143(1)(a)(vi) can be invoked and instances where section 143(1)(a)(vi) cannot be invoked, and the same are summarized hereunder –

ITR-1 Form

Under ITR-1 information about the particular head of income is on a net basis and hence complete data may not be available and hence comparison of data reflected in return cannot be done with data contained in form 26AS or form 16 and hence provisions of section 143(1)(a)(vi) cannot be invoked. However, in case any head/item of income has completely been omitted to be included in the return of income filed in form ITR 1, however, the same is covered within form 26AS, form 16 / 16A in such case provisions of section 143(1)(a)(vi) can be invoked.

ITR-2

Receipt under the head ‘income from salary’ is comparable with the information available in form 26AS or form 16 or form 16A in such case provisions of section 143(1)(a)(vi) can be invoked.

ITR-4 Form

Where presumptive income from business either under section 44AD or profession under section 44ADA alone are reported in the return and the gross receipts from presumptive business or profession as reflected in the return is lower than the gross receipts as per form 26AS or form 16 or form 16A in such case provisions of section 143(1)(a)(vi) can be invoked.

ITR-3, ITR-5 and ITR-6 Form

It would be difficult to ascertain whether income under the head ‘income from house property’ or ‘income from other sources’ as mentioned in form 26AS or form 16 or form 16A are reflected under the return in the same head ‘income from house property’ or ‘income from other sources’ or is being treated as business income and included under the head ‘income from business or profession’. In such case, any difference between ITR-3, 5 or 6 and from 26AS or form 16 or form 16A under the head ‘income from house property’ or ‘income from other sources’ would be excluded from the purview of intimations proposing adjustments. On the other hand, in some case, it is mandatory to include certain types of income under the head ‘income from other sources’, in such case, any difference between ITR-3, ITR-5 or ITR-6 and form 26AS or form 16 or form 16A, provisions of section 143(1)(a)(vi) can be invoked. Further, in case of income taxable under the head ‘income from business or profession', a comparison between data available under form 26AS or form 16 or form 16A and ITR-3, ITR-5 or ITR-6 is not at all possible and hence provisions of section 143(1)(a)(vi) cannot be invoked under such situation.

Capital Gains

Income under the head ‘Income from capital gains’ as reflected under the returns ITR-2, ITR-3, ITR-5 or ITR-6 vis-à-vis data contained in form 26AS or form 16 or form 16A cannot be compared and hence the provisions of section 143(a)(vi) cannot be invoked in such case. To know about the digital payment facility introduced by the Government, click

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Frequently Asked Questions

Common questions about Matching Form 26AS and Form 16 for Income Tax Compliance.

Form 26AS is a statement generated by the Income Tax Department based on the tax deducted from an individual or company and deposited with the department. Form 16/16A, on the other hand, is a tax credit statement issued by the employer/deductor mentioning the tax deducted from the income of an individual or company.

Matching Form 26AS and Form 16/16A is important because the Income Tax Department may issue system-generated demand notices if the income details in the tax return filed by the taxpayer do not match with the information contained in these forms. This can lead to unnecessary complications during the assessment process.

The government has introduced new provisions under Section 143(1)(vi) of the Income Tax Act, effective from April 1, 2017. These provisions allow the total income or loss to be computed after adjusting for any income appearing in Form 26AS or Form 16/16A that has not been included in the tax return.

No, the Central Board of Direct Taxes (CBDT) has issued instructions (No. 9/2017 and 10/2017) specifying the instances where Section 143(1)(vi) can and cannot be invoked for different types of income tax returns (ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, and ITR-6).

For ITR-1, Section 143(1)(vi) cannot be invoked if the information about a particular head of income is reported on a net basis. However, if any head/item of income has been completely omitted from the return but is covered in Form 26AS or Form 16/16A, then Section 143(1)(vi) can be invoked.

For ITR-2, the provisions of Section 143(1)(vi) can be invoked if there is a mismatch between the income from salary reported in the return and the information available in Form 26AS or Form 16/16A.

No, for ITR-3, ITR-5, and ITR-6, any difference between the income from house property or income from other sources reported in the return and the information available in Form 26AS or Form 16/16A would be excluded from the purview of adjustments under Section 143(1)(vi). However, exceptions may apply in certain cases where it is mandatory to include specific types of income under the head 'income from other sources'.

For income from business or profession reported in ITR-3, ITR-5, and ITR-6, a comparison with the data available in Form 26AS or Form 16/16A is not possible. Therefore, the provisions of Section 143(1)(vi) cannot be invoked in such cases.

No, the provisions of Section 143(1)(vi) cannot be invoked for mismatches in income from capital gains reported in ITR-2, ITR-3, ITR-5, or ITR-6 and the data contained in Form 26AS or Form 16/16A, as a comparison is not feasible.

According to Section 234F of the Income Tax Act, if an individual or company fails to file their income tax return by the due date (July 31 for specified categories), they are liable to pay a late filing fee of INR 5,000.