Employer Deducted TDS But It Is Not in Your Form 26AS? Why You Cannot Be Made to Pay It Twice
Your salary slip shows income tax deducted every single month. Then you open Form 26AS a week before filing, and the row against your employer's TAN is blank, or shows a figure nowhere near what actually left your salary. If you are a salaried employee in Junagadh, Rajkot or anywhere else looking at that gap, possibly with an intimation demanding you pay the same tax again, this is written for you. Ignore it and the demand quietly grows interest and gets set off against your next refund.
Short answer: No, you cannot be made to pay the same TDS twice. Section 205 of the Income-tax Act bars the department from calling upon you to pay tax to the extent it has already been deducted from your salary. Where your employer deducted TDS but did not deposit it, recovery has to be made from the employer, not from you.
Why is the TDS missing from my Form 26AS when my salary slip clearly shows it was deducted?
Because Form 26AS is built from what your employer reported, not from what your employer did to your salary. Section 199 read with Rule 37BA gives credit on the basis of the statement filed by the deductor, which for salary is Form 24Q, filed quarterly. Skip a quarter, or deduct and never remit, and nothing reaches your PAN.
Three versions exist, each needing a different fix: deducted and deposited but no 24Q filed; deducted and never deposited, the serious one; or filed with your PAN typed wrong by a character. A practitioner tell here. Form 16 Part A is generated from TRACES, so it only exists if the employer filed. If the "Part A" you were handed is a Word or Excel sheet with no TRACES watermark and no certificate number, they almost certainly did not file.
What will the demand notice look like, and why is paying it the wrong first move?
It arrives as an intimation under Section 143(1) from CPC, and it accuses nobody of anything. Two columns sit side by side, "as provided by taxpayer" and "as computed under section 143(1)", and against TDS the second is lower. The difference becomes a demand, with interest. Most people read it as their own mistake.
Paying is wrong because you would be paying tax already taken from your salary once. The department's own position supports you. CBDT Instruction No. 275/29/2014-IT(B) dated 1 June 2015, followed by an Office Memorandum dated 11 March 2016, told Assessing Officers not to enforce mismatch demands against the deductee and to recover from the defaulting deductor instead. The ITAT has applied Section 205 the same way for employees whose employers collapsed mid-year.
Illustrative example, round numbers. Salary Rs 12,00,000. TDS per your slips, Rs 85,000. Form 26AS shows Rs 20,000, because the employer filed Q1 and stopped. You claim Rs 85,000; CPC allows Rs 20,000 and raises a demand of roughly Rs 65,000 plus interest. Under Section 205 that Rs 65,000 is not yours to pay.
Can we look at your Form 26AS before you pay anything?
If a demand has landed and you are unsure whether to pay it, send it across first. Gadhia Associate has been practising since 2007 and has worked with over 7,000 clients across Saurashtra and Gujarat, with a 5.0 Google rating from 100+ reviews. First consultation is free, fees are fixed, and monthly plans are available. Call or WhatsApp +91 82005 28355, or walk into the Junagadh office for a same-day appointment.
How do I prove the TDS was actually deducted from my salary?
Build the paper trail before you write to anyone: every monthly salary slip showing the TDS line, your bank statement showing the net salary credited each month, and whatever Form 16 you were given. The bank statement is the document people always forget, and it is the strongest of the lot, because it independently proves you received salary net of tax. Slips can be re-issued. A bank credit cannot.
What exactly should I ask my employer for?
Ask for one thing: the TRACES-generated Form 16 Part A, plus the provisional receipt number of the Form 24Q filed for each quarter. Keep the email short and factual, copy HR and accounts, give a date. A functioning employer fixes this in two to four weeks with a correction statement. One that goes silent is telling you something.
How do I file a grievance on the income tax portal for TDS not showing in 26AS?
Use e-Nivaran. Log in at incometax.gov.in, go to Grievances, then Submit Grievance. Pick CPC-TDS where the complaint concerns Form 26AS or Form 16, and Assessing Officer where a demand already exists. Give the employer's TAN, the assessment year, the amount deducted per your slips and the amount reflected, then attach both. Separately, write to the Assessing Officer (TDS) having jurisdiction over your employer's TAN, since that officer can act against the deductor. Acknowledgement usually comes within a fortnight. Some replies solve nothing and you resubmit.
Can I file my ITR claiming TDS that is not appearing in Form 26AS?
Yes, and generally you should, provided you can prove the deduction. Claim the full TDS per your slips and Form 16 in the TDS schedule, enter the employer's TAN correctly, keep the evidence ready. Expect the credit to be restricted to 26AS on processing, and expect a demand. That is not a failure; it puts your claim formally on record, which is what you need when you later ask the Assessing Officer to apply Section 205.
How do I respond to the Section 143(1) demand instead of just paying it?
Go to Pending Actions, then Response to Outstanding Demand, and select "Disagree with demand" for the mismatched portion. Choose the reason relating to TDS credit not given, then state plainly that the tax was deducted from salary, that the employer has not deposited or reported it, and that Section 205 with the CBDT instruction of 1 June 2015 bars recovery from you. Upload the slips, the bank statement and your employer correspondence. If the demand survives, rectification under Section 154 or appeal is next. Our articles on income tax notices and on ITR refunds getting stuck cover that stage.
What if my employer has shut down or simply will not reply?
You go around the employer rather than through it. File the e-Nivaran grievance, write to the Assessing Officer (TDS) for that TAN, and if the company has been struck off, say so and attach the MCA master data page. A company that has vanished does not stop Section 205 from protecting you. This part is genuinely slow and genuinely annoying. Chase it in writing every few weeks.
What if my employer deducted the tax but filed it against the wrong PAN?
Usually fixable, because the money is already with the government. The employer files a correction statement to Form 24Q replacing the incorrect PAN with yours, and the credit typically appears in your 26AS within a week or two of that correction being processed. Ask for the correction's provisional receipt number, not a promise. Do not delay your return waiting for it: file claiming the credit and disagree with any demand on the same Section 205 footing. Our articles on AIS versus Form 26AS and on TDS default notices from TRACES give the background.
Where can I get this sorted without losing months to it?
Bring the demand notice, your salary slips and your bank statement, and in one sitting we will tell you whether this is a wrong-PAN fix, an unfiled 24Q or a genuine non-deposit. Gadhia Associate is a tax and compliance practice based in Junagadh, Gujarat, handling income tax, TDS, GST and company matters for clients across India, including NRIs, with everything workable digitally. Free first consultation. WhatsApp or call +91 82005 28355.
Frequently asked questions
Can the department adjust my refund against a demand caused by my employer's TDS default?
It should not, and courts have said so. Where TDS was deducted from salary but not deposited, Section 205 bars recovery from you, and setting off a later refund against that demand is a form of recovery. If it has already happened, file a rectification and a grievance citing Section 205 and the CBDT Office Memorandum of 11 March 2016, attaching proof of deduction.
Is Form 16 enough on its own to claim TDS credit missing from Form 26AS?
It helps, but only Part A generated from TRACES carries real weight, and that exists only if the employer filed the TDS statement. Where they never filed, you have a manually prepared Part B at best. Support it with monthly salary slips showing the deduction and a bank statement showing net salary credited.
Do the section numbers change under the Income-tax Act, 2025?
Yes. The Income-tax Act, 2025 came into force on 1 April 2026 and renumbered the whole statute, including the TDS chapter and the bar on direct demand where tax has been deducted. The protection has not been removed, only relocated. When drafting a reply now, cite both Section 205 of the 1961 Act and its counterpart in the 2025 Act, using the department's section-mapping utility.
Should I stop filing my return until the 26AS is corrected?
No. Missing the due date costs a late fee and delays any refund, and none of that helps your claim. File on time claiming the credit you can prove, then handle the mismatch through grievance and demand response.
Position as of September 2026. Income tax provisions, CBDT instructions and portal procedures change from time to time, and the Income-tax Act, 2025 has renumbered sections with effect from 1 April 2026. This article is general information and not advice for a specific case; please have your own facts and documents reviewed before acting.
