CFOSurge India/Owner questions/TDS

Your customers deducted TDS. Why isn't the credit showing?

A 3-minute check to find missing TDS credit, and how to recover it. The full guide is underneath.

The problem

Customers deducted TDS, but the credit doesn't appear in 26AS, so you risk paying tax twice.

The way out

Reconcile quarterly, send mismatch lists, get corrections and certificates.

The way out, step by step

Four steps to recover missing TDS credit

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★Every rupee of TDS credited
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The full guide

Everything behind your answer, in detail

Read only the sections you need. Each one stands on its own.

Prepared by the CFOSurge India CFO team

The answer in brief

When a customer deducts TDS from your payment, you get credit for it only when they deposit it and file their TDS return correctly, so it appears in your Form 26AS and AIS. Credit goes missing when the customer uses the wrong PAN, files late, files under the wrong section or amount, or doesn't file at all. Reconcile your books with 26AS every quarter, send each customer a list of mismatches, ask for corrections and their TDS certificates, and track it until it appears.

On this page
  1. Questions first
  2. How credit flows
  3. Find mismatches
  4. Fix them
  5. Six industry cases
  6. What to do now
  7. Quarterly routine
  8. Mistakes to avoid
  9. Official sources
  10. Key terms
  11. Questions owners also ask
Stage 1 · Notice

Answer these questions before you read on

Commit to an answer before you open each one. Together they show where the problem is.

1How much TDS did customers deduct from you last year, and how much shows in 26AS?

The difference is tax you've paid but may not get credit for.

2Is TDS in your books shown as 'receivable from customer' or as tax credit?

It's a tax credit, not a customer debt.

3When did you last reconcile 26AS?

Year-end is too late for customers to correct quarterly returns easily.

4Do you collect TDS certificates every quarter?

They're your evidence when credit is missing.

5Do any customers deduct TDS but pay late?

Late deposit often means late or missing credit.

Missing TDS credit is your money, paid by your customer to the government on your behalf. Go and get it.

Stage 2 · Understand

How TDS reaches your 26AS

Your customer deducts TDS, deposits it, and files a quarterly TDS return with your PAN. The credit then appears in your Form 26AS and AIS. Any error or delay in those steps blocks your credit.

Stage 3 · Locate

Find the mismatches

  1. Download 26AS and AIS.
  2. List TDS by customer from your books.
  3. Match by customer, quarter and amount.
  4. Classify gaps: not filed, wrong PAN, wrong amount, timing.

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Stage 4 · Verify

Ask customers to fix their filings

  1. Send each customer a mismatch statement with PAN, invoice and amounts.
  2. Ask for a correction return where needed.
  3. Collect TDS certificates for each quarter.
  4. Track until the credit appears.
Stage 5 · Compare

Six businesses, six versions of the same problem

The same problem looks different in every industry. Pick the business closest to yours:

These are composite businesses with illustrative figures, built to show how the method works. They are not CFOSurge client results.

Hover over a business for a preview (tap on a phone), then click to open the full case.

Stage 6 · Act

What to do this quarter

  • Reconcile 26AS for the last completed quarter.
  • Send mismatch lists to customers.
  • Don't stop supplying, but escalate persistent issues to the customer's finance head.
  • Record TDS as tax credit, not as a customer receivable.
Stage 7 · Prevent

A quarterly TDS routine

  1. Reconcile after each quarter's returns are due.
  2. Collect certificates.
  3. Chase corrections.
  4. Report TDS pending in the MIS.
Stage 8 · Avoid

Mistakes to avoid

  • Waiting until the return to reconcile.
  • Writing off missing TDS as bad debt.
  • Not giving customers your correct PAN on invoices.
  • Ignoring small amounts that add up.
Reference

Official sources and guidance

Rules, rates and thresholds change. Check the current position at these official sources before acting.

Reference

Key terms in plain English

4 terms
TDS
Tax deducted at source by the payer and deposited with the government on the payee's behalf.
Form 26AS
The annual statement of tax credits.
AIS
The Annual Information Statement, showing financial transactions reported to the tax department.
TDS certificate
The certificate the deductor issues for TDS deducted.
Reference

Questions owners also ask

Why is TDS not showing in my 26AS?

Usually because the customer hasn't filed their TDS return yet, used the wrong PAN, or reported a different amount or section. Ask them to file or correct the return.

Can I claim TDS that isn't in 26AS?

Credit is generally given based on what appears in 26AS. Get the deductor to correct it, and keep their certificate as evidence.

How should TDS be recorded in my books?

As tax credit or advance tax paid, not as an amount the customer still owes you.

Want a CFO to work through this with you?

If you'd like your TDS reconciled and recovered every quarter, A CFOSurge CFO can go through it with you using your actual numbers.

  • Plans from ₹50,000 a month, fixed after a free assessment
  • Free consultation with a senior CFO
  • No cost, no obligation
  • Pay nothing if you don't see value in the first 2 weeks

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CFOSurge India · General information only. It isn't financial, tax or legal advice for your circumstances. Worked examples use illustrative figures. · Follow us on YouTube · LinkedIn