SMS Alerts for TDS Deduction From Income Tax Department: SMS Alert for TDS is to resolve the issue of Income Tax Return (ITR) made by individuals due to a mismatch in the TDS deducted in the salary. The Central Board of Direct Taxes (CBDT) launched the SMS Alert service to inform the salaried taxpayers about their TDS against the PAN.
What Is TDS?
TDS refers to Tax Deducted At Source. As per the Income Tax Act, any individual or company making structured payments must deduct the TDS amount of Tax at the source if the cost exceeds certain threshold limits.
Every individual or company deducts TDS at the rates prescribed by the tax department. A company or an individual making the structured payment upon deduction of TDS is referred to as a deductor. The individual or the company receiving the deducted amount is referred to as the deductee.
The deductor’s responsibility is to deduct TDS before cashing the payment and deposit the same with the Government. It is to be noted that TDS is deducted irrespective of the mode of payment- cheque, cash, or credit. TDS is linked to the PAN of the deductor, and then the amount is deducted.
TDS amount is subtracted on the multiple types of payments:
- Interest payments by banks
- Commission payments
- Rent payments
- Consultation fees
- Professional fees
What Is TDS Return?
A deductor has to deposit the deducted TDS amount to the Government, and the details regarding the TDS amount have to be filed in the form of a TDS return. A TDS return has to be completed quarterly, and the different types of TDS amount deductions have to be filed using various TDS return forms. While preparing a TDS return, the process can be done quickly using the ClearTDS software.
Features of Quarterly SMS Alert for TDS Deduction
The CBDT board stated that all employees would receive quarterly SMS alert Service for salaries regarding TDS. Through the SMS alerts, deductees can check the TDS amount through the message received. If any mismatch or errors are flagged, then immediate issues can arise with their employers or the deductors.
Simultaneously, SMS Alerts for TDS will also be sent to the deductor who have either failed to deposit taxes deducted or to e-file their TDS returns by the due date.
The SMS Alert initiative is aimed to benefit around 2.5 Crore salaried taxpayers. The Income Tax Department wishes to expand the SMS Alerts frequency to 4.4 crores for non-salaried taxpayers. The SMS Alerts frequency will be increased once the TDS returns filing process is streamlined to receive any critical information on a real-time basis.
To receive an SMS alert, deductees must update the respective mobile number in the E-filing account. Upon receiving the quarterly SMS Alert for salaried taxpayers on the TDS amount, the deductees will have to cross-check the details with the Form 26AS on priority.
What Is Form 26AS?
The Income Tax Department issues the annual consolidated statement known as Form 26AS. Form 26AS comprises the details of refund, TDS, or TCS facility related to a particular PAN number. The Form will reflect the Government’s Tax on various income sources like Pension income, Salary, or Deposits. Form 26AS is generated on an annual basis, that is, for every Financial year. The Form will be generated whenever the TAx related transactions like Advance tax paid or TDS occurs with the salaried taxpayer.
Where To Access Form 26AS?
The primary source of Form 26AS is the e-Filing portal of the Income Tax Department. To access Form 26AS, log in
with the credentials and invoke the “My Account” tab. From the drop-down menu, select the 26AS option.
The page will be directed to the TDS Reconciliation Analysis and Correction Enabling System (TRACES) website. Upon reaching, input the relevant AY and the format of the report. This allows the deductee to view and download Form 26AS.
The process is straightforward, and the individual will receive Form 26AS in the registered mail ID seamlessly. However, the source is TRACES.
Reasons for TDS Mismatch
There are several reasons for a TDS mismatch to occur, but the most significant reason is the employer’s negligence or deductor. A few other reasons are:
- If the employer or deductor has failed to file a TDS return.
- Mention of a wrong PAN number of the employee or deductee.
- Recognition of a wrong PAN and TAN number of employers or deductors.
- Missing out the inclusion of details of TDS payment while filing TDS return.
- Mention of a wrong challan identification number.
- Error in the amount entered.
- Statement of the wrong assessment year.
The Advantages Of SMS Alerts
- Mismatches in the TDS amount deducted and details updated in Form 26AS can create errors or problems while filing Income Tax Returns. A mismatch can result in the payment of additional taxes or restriction in the refund of excess Tax for taxpayers.
- SMS Alerts helps employees or deductees remain aware of the TDS amount deducted and deposited against their PAN. This facility allows deductees to take immediate and necessary actions to rectify and correct the flagged error or mismatch.
- In case of a mismatch or an error, salaried taxpayers should consult the employer or deductor and report the error or mismatch to rectify the necessary corrections.
- As per the CBDT press release, the SMS Alert service for direct tax payment has been activated for about 2.5 million salaried employees or deductees in both the private and Government sector. The CBDT department plans to expand this facility to about 44 million non-salaried taxpayers, including professionals like doctors and lawyers and business people.
- Similar SMS Alerts will be sent to the deductors who have collected the TDS amount.
- The SMS Alerts aims to inform and remind the deductors to file the Tax if left undone and to fill the file necessary for TDS returns by the due date.
- According to Income-tax Rules, the TDS deducted needs to be deposited by the seventh day of the corresponding month in which the TDS amount was deducted.
- The Income-tax department aims to increase SMS Alerts’ frequency upon which the process for filing TDS return is streamlined, making the alerts go out on a real-time basis.
- To receive an update regarding SMS Alerts, the deductees must enter the applicable mobile number in the e-filing account.