Match Indian TDS credits to customer receipts and the correct annual statement

A customer may settle an Indian business invoice partly in cash and partly through tax deducted at source. Obtain the remittance advice and deduction evidence before deciding why the bank receipt is smaller than the receivable. A short payment can also reflect a dispute, fee or unrelated adjustment, so do not automatically label every difference TDS.

For a simplified illustration, an approved INR100,000 receivable is settled with INR90,000 cash and documented INR10,000 withholding. Those two components explain the settlement. This is reconciliation arithmetic, not a suggested tax rate or treatment of GST. Ask the accountant to confirm the accounts and tax basis for the actual transaction.

The department's annual-statement guidance distinguishes Form 26AS for periods through previous year 2025–26 from Form 168 for tax year 2026–27 onward. Check the statement name, PAN and assessment-year or tax-year label before comparing it with the ledger. Two files both containing 2026–27 can concern different underlying income periods during the transition.

The department's TDS transition guidance links credit to the year in which the income is assessable. It explains that March 2026 withholding deposited after April 1 can still relate to the earlier period when correctly reported. Keep the income period, deduction date, deposit information and statement period in separate fields rather than sorting everything by the bank date.

Compare the TDS receivable schedule with the official statement using the deductor identity, reported amount and underlying invoice or income reference. Record the statement download date. A later corrected statement can differ from the snapshot used at the previous close, and the history should explain that movement.

Group exceptions by their actual cause: evidence not yet received, an amount different from the customer's advice, an incorrect identity or period, or a credit appearing without a corresponding ledger item. Ask the customer for a specific correction, supported by the invoice and deduction details. Sending the whole ledger without identifying the affected line rarely resolves the problem efficiently.

Keep an unexplained credit separate from an approved claim. Appearance in a statement does not, on its own, establish that the underlying income, entity and year have been reported correctly. The return preparer should review that connection before using the credit.

For a withholding mismatch, the department directs the taxpayer to the employer or other deductor responsible for the TDS statement. Retain the correction request, response and refreshed statement. If the business has already filed its income-tax return, have the preparer assess the appropriate return or processing correction separately; a customer email does not update a filed return.

Reconcile opening TDS receivable, new supported deductions, credits used or otherwise resolved, and the closing balance. Preserve older unresolved amounts by year with a named owner and next action. Avoid clearing them to expense solely because the customer invoice is marked paid. The closing file should show which balances are evidenced, disputed, corrected or still awaiting professional assessment.