Businesses often encounter issues with stuck TDS refunds and increased liabilities due to errors in reconciling 26AS/Form 168 with their internal books, according to zoho.com. These records, updated quarterly, reflect tax deducted at source but can contain discrepancies from both deductors and recipients, impacting working capital and tax filings.
Mugundan Anandan, Head of Product and Customer Success at Cappitall Want Network, explained that errors arise from deductors miscalculating or misfiling TDS returns, incorrect PAN/TAN entries, or failing to deposit taxes. On the recipient side, finance teams may miss transactions or enter data incorrectly, leading to time-consuming manual reconciliations to identify mismatches between 26AS and company books, zoho.com reported.
The consequences of mismatched 26AS records include funds being stuck in government portals or companies facing additional tax payments. Since income tax return filing occurs after the financial year ends, businesses that do not regularly reconcile their TDS credits risk losing refunds or incurring liabilities. Regular reconciliation before the ITR deadline ensures smoother filings and better working capital management, zoho.com noted.
Zoho.com highlights that quarterly updates to 26AS/Form 168 require proactive reconciliation efforts by businesses to avoid financial setbacks. Mugundan Anandan emphasized that timely and accurate reconciliation can prevent working capital from being unnecessarily tied up and reduce the risk of tax discrepancies during filing.