SMS alerts every quarter will help you track TDS deductions

Through TDS, a certain amount of tax is collected at the source of the income. For a salaried employee, it is collected by the employer

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Many salaried individuals end up paying excess tax while filing their income tax return (ITR), because of mismatches in the amount of tax deducted at source (TDS) from their salary and the amount that is deposited with the income tax department against their permanent account number (PAN).

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To remedy this situation, on 24 October the Central Board of Direct Taxes (CBDT) launched an SMS service to tell the salaried taxpayers exactly how much TDS has been deposited against their PAN.

These SMS alerts will be sent every quarter.

If you are a salaried individual and have an income tax e-filing account on the department's e-filing website: https://, you too would have received this SMS.

These SMS alerts will also contain a summary of the total amount of TDS deducted, till the month in which the SMS is sent.

This will help salaried taxpayers track their tax deductions.

Let's read more about the initiative.

Tax deducted at source
Through TDS, a certain amount of tax is collected at the source of the income. For a salaried employee, it is collected by the employer.

It is mandatory for employers to deduct TDS on the monthly income of all their employees, at a rate that matches their income tax slab rate. Failure to deposit this tax with the tax department, within the stipulated period, attracts fine and penalty.

The advantage of SMS alerts
Mismatches in the amount of tax deducted, and what is updated in the 26AS form (tax credit statement) creates problems while filing income tax returns.

For the taxpayers, this mismatch can result in payment of additional taxes or it can restrict the refund of excess tax.

With the help of these SMS alerts, employees can know exactly how much TDS has been deposited against their PAN and take necessary actions to correct this mismatch.

If a mismatch is detected, salaried individuals should consult their employer and report the mismatch so that the necessary corrections may be made.

As per the CBDT press release, the SMS alert service for direct taxes has been activated for about 25 million salaried employees in the private and government sector.

Soon, the department will extend this facility to 44 million non-salaried taxpayers, which would include businessmen and professionals.

Similar SMS alerts will also be sent to deductors, who would have collected the TDS.

The alerts will remind the deductors to deposit the tax if they have not done so, as well as to e-file their TDS returns by the due date.

As per the income tax rules, the TDS deducted needs to be deposited by the seventh day of corresponding month in which it was deducted.

The income tax department is also planning to increase the frequency of these SMS alerts, once the process for filing TDS returns is streamlined. There may even come a time when these alerts could go out in real-time.

If you have not received this SMS alert yet, make sure that your mobile number is updated in the e-filling account. You can update it by logging in to your account on the department's website.

In arrangement with HT Syndication | MINT

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