Home / Money / Personal Finance /  Claiming TDS credit will be difficult if bank doesn’t have PAN data

Have you submitted your permanent account number (PAN) to your bank? If not, the bank can deduct TDS (tax deducted at source) at a higher rate of 20% on interest you have earned on deposits. As you have already paid TDS on interest income, you would want to get it adjusted to your overall tax liability. Also, if the tax deducted was higher than your tax liability (if you fall in a lower tax bracket), you can claim a refund. The taxpayer will have to show pre-tax, or gross, income in the ITR and the credit for tax paid will have to be taken separately.

However, you may face a problem in claiming TDS credit, as it will not get reflected in your Form 26AS because you didn’t submit PAN with the bank. The TDS return filed by the bank will show, “PAN not available".

Every person liable to deduct TDS has to file TDS return. If 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. So, how can you claim TDS credit?

“It will not be possible 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," said Shailesh Kumar, partner, Nangia & Co.

“If the deductor accepts the request and files a TDS correction statement mentioning the PAN, then such TDS will reflect in Form 26AS of the concerned person, after the TDS correction statement filed by the deductor is processed, then the person will be able to claim credit," added Kumar. However, there is a possibility that the deductor doesn’t agree to file a revised TDS return.

“In such cases, the tax deductee (the taxpayer) may also avail credit on the basis of the Transaction-Based Report (TBR) issued to him by the tax deductor. However, this 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. However, a rectification application may be filed in this regard by the taxpayer to claim the TDS credit based on the TBR," said Suresh Surana, founder, RSM India.

Therefore, if you want to avoid any hassles, it is always better to submit your PAN wherever required.

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