Taxpayers May Find It Tough To Claim TDS Credit If Bank Doesn’t Have Pan Data

It is important to note that if the tax deducted was higher than your tax liability and you come in a lower tax bracket, then you can claim a refund.

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New Delhi: Those taxpayers, who haven’t submitted a permanent account number (PAN) to the bank, be prepared for deduction in TDS (tax deducted at source) at a higher rate of 20 percent on interest earned on deposits.

In case you have already paid TDS on interest income, you may then want to get it adjusted to your overall tax liability. It is important to note that if the tax deducted was higher than your tax liability and you come in a lower tax bracket, then you can claim a refund.

According to the report in Mint, the taxpayer has to provide pre-tax, or gross, income in the ITR, and the credit for tax paid to be shown separately.

You may face issues claiming TDS credit in absence of the same not reflected in your Form 26AS because you didn’t submit PAN with the bank. The TDS return filed by the bank will display, “PAN not available”.

Those who are liable to deduct TDS needs to file a TDS return. After the deductee has given the PAN, the deductor will show the TDS deducted against the PAN in the TDS return. The tax department will use this data, which will be reflected in Form 26AS of the PAN holder.

But if PAN was not submitted, it will not reflect in Form 26AS of the deductee. However, you can claim TDS credit. According to tax experts, you won’t be able to claim TDS credit if PAN is not furnished by the deductee. If PAN is furnished after the deduction of tax and filing of TDS return by the deductor, then the deductor may be requested to file a correction statement to his TDS return mentioning the PAN of the concerned person whose TDS is deducted.

There is a likelihood that the deductor doesn’t agree to file a revised TDS return.

 In such cases, the tax deductee (the taxpayer) may opt for credit on the basis of the Transaction-Based Report (TBR) issued to him by the tax deductor. However, it may lead to notice being issued to the taxpayer due to the discrepancy between the TDS claimed in the income-tax return filed and TDS reflected in Form 26AS. “Based on this a rectification application may be filed in this regard by the taxpayer to claim the TDS credit based on the TBR,” according to Suresh Surana, founder, RSM India quoted in the Mint report.

It is always better to submit your PAN wherever required to avoid any hassles.