TDS (Tax Deducted at Source) is the amount deducted from your income before the money is paid to you. It is like an advance tax that the Income Tax Department collects. But to claim this TDS later while filing your income tax return, your PAN details must match the TDS records. Problems occur when the PAN holder is different from the person who earned the income. Let’s understand how to deal with such a situation.
Why PAN Is Important for TDS Claims
When any bank or company deducts TDS, they report it to the Income Tax Department using a PAN number. This TDS amount then appears in Form 26AS of that PAN holder. You can only claim the TDS refund if your PAN is listed correctly and the income belongs to you.
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You can check your TDS details in Form 26AS on the official income tax website.
A Common Example
Suppose a father opens a Fixed Deposit (FD) in his son’s name. But he submits his own PAN to the bank. The FD interest income goes to the son, but the TDS is linked to the father’s PAN. In this case:
- The father can claim the TDS in his ITR.
- The son cannot claim the TDS because his PAN is not linked to the TDS.
Even if the money belongs to someone else, the person who holds the PAN mentioned during TDS deduction has the right to claim it—unless you use clubbing rules or correct the mistake.
What If Income and PAN Are Different?
This happens in many real-life situations:
- A parent opens a joint FD account with a child.
- A husband invests in his wife’s name but uses his own PAN.
- TDS is mistakenly linked to the wrong person’s PAN.
In such cases, the person who has the TDS in their PAN must also report the income. If someone else files the income without the TDS being under their PAN, they won’t get the refund.
What Can You Do?
1. Use Clubbing of Income Rules
Income Tax law allows the clubbing of income in some cases. If income of a minor child or spouse is added to your total income, you can also claim the TDS.
You can read our full guide on Clubbing of Income in India Explained for more clarity.
2. Ask the Deductor to Correct the PAN
If the PAN was wrongly entered, ask the deductor (bank, company, etc.) to revise their TDS return. They must file a correction statement and update the PAN. Once updated, the correct PAN holder can see the TDS in their Form 26AS and then claim it.
3. Report the Income in Your ITR
If TDS is linked to your PAN, but the income is in someone else’s name, then you should report the income in your own ITR and claim the TDS.
If you skip reporting the income but still claim the TDS, your refund may be delayed or denied by the tax department.
Summary Table: TDS Claim Situations
| Situation | Who Can Claim TDS | Action Needed |
|---|---|---|
| TDS in your PAN, income belongs to someone else | You | Report income in your ITR |
| TDS in someone else’s PAN, income belongs to you | They | They must report income and claim TDS |
| PAN wrongly entered | Depends | Ask deductor to revise TDS return |
| Minor child’s income | Parent | Use clubbing rules |
| Joint FD with one PAN | That PAN holder | Include full income in their ITR |
Important Things to Remember
- Always match TDS in Form 26AS with your ITR details.
- Make sure your PAN is correctly updated wherever you earn income.
- Use clubbing rules if needed, but understand the legal rules behind it.
- Use the official income tax portal to view or file returns.
Summary
TDS claims can become complicated when the PAN holder is different. But the solution is simple—TDS and income should be in the same person’s name. If not, use the right legal steps. Either correct the PAN with the deductor or report the income in the same ITR where TDS appears.
To read more about this topic, visit our guide on How to Claim TDS in ITR If PAN Holder Is Different.
Filing your ITR properly and understanding these small details can help you avoid tax issues and get your refunds on time.
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