Salary and employment · Tax Year 2025-26
Employer deducted wrong TDS: what to do
If your employer deducted too much or too little TDS on salary, or the TDS is missing from your tax statement, you can still file correctly. Compare Form 16 with Form 26AS or Form 168, ask the employer to correct, and settle the difference in your return.
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TDS is only an advance payment of your tax. If your employer deducted too much, you get the difference back as a refund when you file. If they deducted too little, you pay the shortfall with your return. The problem to fix is when the TDS in your Form 16 does not match the TDS shown against your PAN in Form 26AS (tax year 2025-26) or Form 168 (from 2026-27), because that statement is the credit the department gives you.
Step 1: Find out what went wrong
What you see | Likely cause | What to do |
|---|---|---|
Form 16 TDS is higher than your real tax | Employer used a regime or income estimate that did not match your final position | File the return; refund follows |
Form 16 TDS is lower than your real tax | Employer was not told about other income, or used the wrong regime | Pay the shortfall with the return |
Form 16 shows TDS, statement shows less | Employer deposited less or reported it wrongly | Ask for a corrected TDS return |
Statement shows TDS, Form 16 does not | Issue or reporting error | Ask employer for a corrected Form 16 |
Name or PAN wrong | PAN entered wrongly in the TDS return | Ask employer to correct the PAN |
Step 2: Compare three documents
- Form 16 Part A and Part B. See Form 16 Part A vs Part B.
- Form 26AS or Form 168. The salary TDS appears under section 192 (1961 Act) or 392 (2025 Act), and in Form 168 as a four-digit code between 1001 and 1003.
- Your salary slips. They show what was deducted month by month.
Step 3: Check the regime
A common cause of wrong TDS is the regime. Your employer deducts based on the regime you told them, or on a default. If you declared old but want to file under new (or the reverse), the TDS will differ from your final tax, and that is fine. The return settles it. See can a salaried person change regime every year.
Step 4: Ask the employer to correct
If the statement does not match Form 16, write to the employer's payroll or finance team with:
- Your PAN and the tax year
- A copy of Form 16 and a screenshot of your Form 26AS or Form 168
- The difference you see
The employer corrects it by filing a correction TDS return. After that, your statement is updated. It can take time, so raise it early.
Step 5: File with the right figures
Do not guess. In your return:
- Enter salary as per Form 16 and cross-check with AIS.
- Enter TDS as per the statement, not simply as per Form 16.
- Pay any shortfall of tax before you submit.
- If TDS is missing and you cannot wait, claim only what the statement shows now. You can revise the return later if the statement is corrected (see below).
A revised return can be filed until 31 March after the tax year from the tax year 2025-26, with a fee under section 234I for revisions after 31 December. So you may file, and revise if the statement later changes.
If the employer deducted but did not deposit
This is the employer's default. The credit may not show in your statement, and your return can claim only what the statement shows. Raise it in writing with the employer and keep proof of the deduction (salary slips, Form 16).
What if too little TDS means a demand?
If TDS was too low, your tax still has to be paid. Delay brings interest: 1% per month under sections 234A, 234B and 234C on the 2025-26 rules, so pay with the return.
What if there is an excess TDS?
You receive it as a refund once the return is processed. Interest on the refund may be added. See interest on income tax refund and refund status and delays.
How TaxCare helps
TaxCare brings your salary and TDS from the portal and compares them with your AIS and Form 26AS or Form 168, so a TDS mismatch shows before you file. It computes your final tax under both regimes, so you see whether you are due a refund or owe a shortfall. If you cannot resolve a mismatch with your employer, a Tax Expert can advise. See Tax Experts.
This guide gives general information and is not professional tax advice.
Questions on this topic
Employer deducted more TDS than my actual tax. What now?
File your return. The excess is credited against your tax and refunded after processing, provided the TDS appears in your Form 26AS or Form 168.
Employer deducted less TDS. Do I still owe tax?
Yes. The tax on your income is the same whatever was deducted. The shortfall is payable with your return, and interest may apply.
TDS is in my Form 16 but not in Form 26AS. Can I claim it?
Credit follows the statement, so ask the employer to correct their TDS return. Do not claim more than the statement shows without advice.
Can I claim TDS that my employer deducted but did not deposit?
The credit usually depends on the deposit being reported against your PAN. Ask a Tax Expert before you claim it.
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