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TDS & Tax · TDS lesson 6 of 7
Form 130, Form 26AS/AIS and common mistakes
How a receiver sees and claims the tax deducted on their behalf, and the errors that cause problems.
Two places a taxpayer sees TDS
| Document | What it is |
|---|---|
| TDS certificate (Form 16 / Form 130 for salary; Form 16A / Form 131 for other payments) | A certificate from the deductor. It shows the amount paid and the tax deducted. |
| Form 26AS and the AIS | Statements on the Income Tax portal for your PAN. They show the TDS that deductors have reported and deposited, plus other tax you have paid. The AIS also shows more kinds of transactions reported about you. |
The golden rule: a taxpayer can claim credit only for tax that actually appears against their PAN in the government's records. So the certificate and the portal statement should match.
Reading a salary certificate (simple view)
- Part A — who deducted (employer's name, TAN), who received (employee's PAN), and the TDS deducted and deposited quarter by quarter.
- Part B — how the salary and the tax were worked out: gross salary, deductions, taxable income and tax.
The new form has a different number, but the idea is the same: show the receiver what was paid, what was deducted and that it was deposited.
How credit is claimed
- The taxpayer opens the portal statements for the year and checks every TDS entry against certificates and bank entries.
- When filing the return, the taxpayer lists the TDS to be adjusted against the tax payable.
- If total tax paid (TDS + advance tax + self-assessment) is more than the tax due, a refund is claimed.
Common mistakes (and how to avoid them)
| Mistake | What goes wrong | How to avoid it |
|---|---|---|
| Wrong or missing PAN of the receiver | Credit does not show for the receiver; higher TDS may apply | Collect PAN before paying and verify it |
| Wrong section or rate | Under-deduction, interest and notices | Check the section for each vendor; review when sections change |
| Deducted but not deposited, or deposited late | Interest, and the receiver's credit may be affected | Keep a monthly calendar; deposit before the 7th |
| TAN not quoted or wrong period in the return | Return errors or mismatches | Use the right TAN and check the quarter |
| Using old section codes after April 2026 in software | The return is rejected by the validation tool | Update vendor mappings to the new section codes |
| Not matching the books to the return | Differences found later during audit | Reconcile ledger, challans and the return every quarter |
Lower or no deduction
If a receiver's tax liability for the year will be nil or small, they can sometimes apply to the tax department for a certificate of lower or nil deduction, or give a declaration to the deductor, so that less tax (or none) is deducted. The forms and conditions change, so check the current rules on the portal.
Practice
- Imagine your certificate shows ₹10,000 TDS, but the portal statement shows only ₹6,000. List three questions you would ask the deductor.
- Make a checklist a small business could follow every month to avoid TDS mistakes.
Check yourself
1. A taxpayer can claim credit for TDS…
Credit generally depends on the deduction appearing against the receiver's PAN in the portal records.
2. Which is a common mistake?
Old section codes can cause validation errors; the other options are good habits.
3. What does Form 26AS/AIS help a taxpayer do?
They show TDS and other tax information reported against your PAN.
Learning material for beginners, checked in October 2026. It is not tax or legal advice. Tax rules, rates and due dates change, and different websites sometimes show different details. Always confirm on the Income Tax Department portal (incometax.gov.in) or with a Chartered Accountant before applying anything in real work. All names and amounts in the examples are made up.