| The bank shows tax was deducted. Form 26AS shows nothing. Both can be true at once — and the credit is still yours to claim. |
By Dinesh Kumar S · Published June 2026 · 12 min read
Position stated for AY 2026-27 (FY 2025-26), with returns due 31 July 2026 and filed under the Income-tax Act, 1961. Verified against the consolidated Income-tax Act provisions at incometax.gov.in — Sections 194, 195, 199, 205; Rule 37BA; the dividend TDS threshold raised to ₹10,000 by the Finance Act 2025; and the Form 26AS / AIS framework as available up to mid-2026. Rates, thresholds and case law can change. This is general consumer-awareness information, not tax advice — confirm the current position at incometax.gov.in before acting.
It is the second week of July, and you are most of the way through your return on the income-tax portal when something stops you. You hold shares in a company that paid a dividend in March. Your bank statement shows it plainly: the dividend came in, and a slice was already shaved off as tax before the money landed. But the portal's TDS schedule — the part that is supposed to fill itself in from your records — shows nothing against that company. No entry. As if the tax was never cut.
The instinct in that moment is simple and wrong: type the figure in manually, claim the credit, and move on. It feels harmless — the tax was deducted, after all, so why shouldn't you claim it? The trouble is that the system processing your return does not see what your bank statement sees. It sees only what is written in your Form 26AS. And if you claim a number that is not there, the most likely result is not a refund — it is a demand notice a few months later, asking you to pay the very tax that was already taken from you.
So the honest answer to "the TDS was deducted but it's not in my 26AS — what now" is in two parts, and most articles only tell you the comforting half. The law is firmly on your side: once tax is genuinely deducted from your income, the credit belongs to you, full stop. But the automated machinery that processes your return does not run on the law — it runs on the data in 26AS. Getting the two to agree is the whole task. This piece walks through why the gap appears, what your actual rights are, and the order of moves that gets the credit into your hands without inviting a fight.
Why isn't the TDS showing in my 26AS?
Before you do anything, work out which of four things has happened, because the fix is different for each — and one of them isn't a problem at all.
The company simply hasn't filed yet. Tax deducted from your dividend reaches your 26AS only after the company (or its registrar) files its quarterly TDS statement and the payment is matched at the tax department's TRACES system. That filing happens once a quarter, so there is a built-in delay. Here are the due dates for the deductor's returns for FY 2025-26:
Q1 (Apr–Jun 2025): by 31 July 2025
Q2 (Jul–Sep 2025): by 31 October 2025
Q3 (Oct–Dec 2025): by 31 January 2026
Q4 (Jan–Mar 2026): by 31 May 2026
Notice the trap in that last line. A dividend paid in March 2026 sits in the January–March quarter, which the company need not file until 31 May 2026 — well after many people have started their returns. So a March dividend genuinely missing from your 26AS in early July is often just a filing that has only recently posted. Once it is filed and matched, the credit usually appears within about a week to a fortnight.
The company filed with the wrong PAN. This is the most common cause that isn't just timing. If even one character of your PAN is wrong in the company's TDS return, the credit is routed to the wrong account — or to no one — and it never reaches your 26AS. It is especially frequent on older physical-share folios and jointly held shares, where the registrar's records can be out of date.
A challan mismatch. Even after the company files, if the tax-payment details don't reconcile at TRACES, the credit stays in limbo until the company fixes the mapping. From your side this looks identical to a missing entry.
There was never any TDS to begin with. From FY 2025-26, a company deducts tax on your dividend only once the dividend it pays you crosses ₹10,000 in the financial year — a threshold raised from the old ₹5,000 by the Finance Act 2025. And this is per company, not across your whole portfolio. You could collect ₹8,000 each from three different companies — ₹24,000 in total — and have no tax deducted anywhere, because no single company crossed ₹10,000. If your dividend was under that line, there is correctly nothing in 26AS to claim. The dividend is still fully taxable and you must still declare it — but chasing a TDS credit that was never deducted is a wild-goose chase that, worse, can create a mismatch when you claim a figure that doesn't exist.
| For your AY 2026-27 return, 26AS still rules for the TDS credit and AIS for the income. Form 168 only merges them from next year. |
26AS, AIS, TIS — which one actually decides the credit?
Part of the confusion is that the portal now shows you three overlapping statements, and people reach for the wrong one. They do three different jobs.
Form 26AS is your tax-credit statement: the tax deducted on your behalf, the tax you paid yourself, and refunds. This is the one the system reconciles when it decides how much TDS credit to allow you. For your AY 2026-27 return, this is the document that governs the credit.
The Annual Information Statement (AIS) is the wide-angle record — every financial transaction reported against your PAN, including dividends on which no tax was even deducted. Its job is income completeness: it is how the department knows what you earned. It also has a feedback button, which matters later.
The Taxpayer Information Summary (TIS) is the tidied-up, de-duplicated version of AIS that pre-fills your return.
The practical rule for dividends: reconcile both, for different reasons. Use 26AS to confirm the TDS credit you can claim. Use AIS to make sure no dividend has slipped through unreported — because a dividend under ₹10,000 will show in AIS as income even though it carries no TDS and appears nowhere in 26AS. Declare the income regardless; claim the credit only where 26AS backs it.
(You may have read that Form 26AS is being replaced by "Form 168." That is real, but it takes effect only from FY 2026-27 — next year's return. For the return you are filing now, it is still 26AS and AIS, exactly as before.)
Can I claim it even if it's not in 26AS? The honest answer.
Here is where most write-ups stop at the reassuring line — "yes, you can claim it, the law protects you" — and leave out the part that actually trips people up.
What the law says. Your right to the credit is genuinely strong. Section 205 of the Income-tax Act bars the department from coming after you for tax that has already been deducted at source — and courts have read this broadly, holding that the bar applies even where the company never deposited the tax, and even where it never issued you a TDS certificate. Section 199 read with Rule 37BA grants you credit for tax deducted, tied to the year the income is taxable. And this isn't a stale principle: by an order dated 12 January 2026, the Supreme Court left intact a taxpayer's protection under Section 205, confirming that the bar on recovering already-deducted tax from the deductee holds. On paper, the credit is yours.
What the system does. The catch is that your return is processed by an automated centre, and that system grants TDS credit only to the extent it appears in your Form 26AS. It cannot see your bank statement or your dividend warrant. So if you manually claim a figure higher than 26AS shows, the system quietly trims your credit down to the 26AS number and raises a demand — with interest — for the "shortfall." You are then in the position of having to contest a notice to claim tax that was lawfully yours all along, which can mean months of follow-up.
So both things are true: you have the right, but exercising it by force — claiming what isn't in 26AS — is the slow, painful path. The fast path is to make 26AS match reality first. That is not a legal compromise; it is just choosing not to pick a fight you can avoid.
Fixing it at the source — the move that actually works
The reliable route is to get the deduction corrected where it originated, so the credit posts to your 26AS on its own. Most listed-company dividends are handled by a registrar and transfer agent — usually KFintech or MUFG Intime (the former Link Intime). Work it in this order:
Confirm the tax was deducted. Pull out the dividend advice, check the bank credit against the gross dividend, and find the TDS certificate (Form 16A) the company issues after each quarter. If the deduction is real, you have everything you need.
If it's only timing, wait — don't force it. If the relevant quarter's filing isn't even due yet (a March dividend before the 31 May deadline), the cleanest move is to let 26AS update and file after it appears. If you've already filed, you can revise the return once the credit shows; the revised-return window for AY 2026-27 runs to 31 December 2026.
If the PAN is wrong or the TDS was misreported, raise it with the registrar. Open a service request with KFintech or MUFG Intime quoting your name, PAN, folio or demat ID, the dividend record date, the dividend amount and the TDS deducted, and attach the dividend advice and Form 16A. Ask them, in plain terms, to file a correction TDS return with the correct PAN so the credit reflects in your Form 26AS. Once they file the correction and the payment is matched at TRACES, the credit typically appears within about 7 to 15 working days. Build that lag into your plan — start reconciling two or three weeks before you mean to file, not the night before.
If the deduction is wrong or missing in AIS, flag it there too. On the portal, under the Annual Information Statement, you can open the entry and submit feedback ("information is not correct," "relates to another year," and so on). This corrects your income record and pre-fill — but be clear about what it does not do: AIS feedback does not, by itself, create a TDS credit in 26AS. For the credit, the company still has to fix its return. Treat the two as separate jobs.
What to actually put in your return
When you sit down to file — most equity investors will be on ITR-2, since dividends usually sit alongside capital gains — a few specifics keep it clean:
Report the gross dividend, not the net. Dividends have been fully taxable in your hands at your slab rate since the dividend distribution tax was scrapped in 2020. Declare the full dividend — the figure before TDS — under Income from Other Sources, not the amount that reached your bank. The only deduction allowed against it is interest expense incurred to earn it, capped at 20% of the dividend.
For the credit, default to what's in 26AS. The TDS schedule pre-fills from 26AS. You can edit it — but a manual figure above the 26AS number is precisely what triggers the mismatch demand described earlier. So unless you've decided to contest, claim what 26AS shows at the time you file. If a credit lands later, revise the return rather than over-claiming now.
When a manual claim is justified. If the company flatly refuses to correct its return and you hold a valid Form 16A proving the deduction, you are within your rights to claim it manually — but go in expecting a Section 143(1) adjustment, and be ready to respond with your TDS certificate and the Section 205 argument. That is a deliberate choice to fight, not a default.
If you're an NRI, the rules are different
Dividends paid to non-residents don't run on Section 194 at all — they fall under Section 195, and the differences matter. There is no threshold: tax is withheld from the first rupee, so the ₹10,000 relief that residents get does not apply. The default rate is 20% plus surcharge and cess, which for an individual works out to roughly 23% before any relief.
That default can usually be brought down through the tax treaty (DTAA) between India and your country of residence — but only if you've put the paperwork in before the dividend record date: a Tax Residency Certificate from your home country, Form 10F filed electronically on the Indian tax portal, and a declaration of beneficial ownership and no permanent establishment in India. Miss that window and the company withholds at the full domestic rate, leaving you to file an Indian return and claim the excess back as a refund.
One widely repeated error worth getting right: the treaty rate is not a flat 10% or 15% everywhere. It varies by country, and for individual investors it is often higher than people assume. To take the common ones — the rate for an individual resident is around 10% for the UAE, 10% for the UK, 15% for Singapore, and 25% for the United States (the 15% US figure you'll see quoted applies only to companies holding at least 10% of the voting stock, not to individual shareholders). Because Section 90(2) lets you apply whichever is lower of the treaty rate and India's domestic rate, a US-resident individual may actually find the 20% domestic rate better than the 25% treaty rate. Check your specific treaty rather than assuming.
If a mismatch notice arrives anyway
Suppose you claimed in good faith and a Section 143(1) intimation lands showing a difference — your claimed TDS reduced to the 26AS figure, with a demand for the gap. Don't panic, and don't pay reflexively.
Open the intimation (the PDF opens with your PAN in lower case plus your date of birth) and find the row where the figures differ. If the demand is genuinely correct — you over-claimed, or the dividend was actually below the threshold so no TDS ever existed — pay it and move on. But if the tax really was deducted, the fix is sequence, not surrender: get the company to correct your 26AS first, then file a rectification for the non-granted credit. Disputing the notice before 26AS is corrected rarely works, because the system still has nothing to match against. Where the error was in your own original return, a revised return (by 31 December 2026) is often cleaner than a rectification.
Frequently asked questions
Why is my dividend TDS not showing in Form 26AS?
Usually one of four reasons: the company or its registrar hasn't yet filed its quarterly TDS return, so the credit hasn't posted; it filed with an incorrect or missing PAN, routing the credit elsewhere; there's a timing or challan-matching lag at TRACES; or no TDS was deducted at all because your dividend from that company didn't cross ₹10,000 for the year. In the first three the credit is still yours once the filing is fixed; in the last, there's correctly nothing to claim, though the dividend remains taxable.
Can I claim TDS credit if it is not in my Form 26AS?
Legally, yes — Section 205 bars a demand on you for tax already deducted, and Rule 37BA grants the credit regardless of the deductor's lapses. But the automated processing system grants credit only up to what appears in 26AS, so claiming more usually triggers a demand under Section 143(1). The practical route is to get the deductor to correct and refile so the credit appears in 26AS, then file or revise — keeping your Form 16A as proof if you must contest.
What is the TDS threshold on dividends for FY 2025-26?
For resident individuals, TDS under Section 194 applies only once the dividend from a single company exceeds ₹10,000 in the year — raised from ₹5,000 by the Finance Act 2025, effective 1 April 2025. The rate is 10% with a valid PAN, or 20% where PAN is missing or inoperative. The threshold is per company, not a combined limit across your portfolio.
How is dividend TDS deducted for NRIs, and can they claim a refund?
NRI dividends fall under Section 195, with no threshold. The default is 20% plus surcharge and cess, reducible to the applicable treaty (DTAA) rate on furnishing a Tax Residency Certificate, an electronically filed Form 10F and a no-permanent-establishment declaration before the record date. Treaty rates vary by country and are not a uniform 10%. Where excess tax was withheld, the NRI files an Indian return (usually ITR-2) and claims the refund.
How do I get the company or registrar to correct the TDS in my 26AS?
Find the company's registrar — commonly KFintech or MUFG Intime — and raise a service request quoting your name, PAN, folio or demat ID, the dividend record date, the amount and the TDS deducted, attaching your dividend advice and Form 16A. Ask them to file a correction TDS return with the correct PAN. Once the corrected return is filed and matched at TRACES, the credit usually reflects in 26AS within about 7 to 15 working days.
Where do I report dividend income and the TDS in my ITR for AY 2026-27?
Report the gross dividend, before TDS, under Income from Other Sources. Most equity investors use ITR-2, and NRIs cannot use ITR-1. The TDS sits in the TDS schedule, pre-filled from 26AS; you can edit it, but a manual figure higher than 26AS will usually trigger a Section 143(1) mismatch. For AY 2026-27, 26AS remains authoritative for the credit and AIS for income completeness.
The thread running through all of this is a single mismatch between two systems — one that knows the tax was taken from you, and one that will only believe it once a company files a form correctly. Your money isn't lost in that gap; it's just waiting on a piece of paperwork to catch up. Fix the record at the source, claim what the record shows, and keep your dividend advice in a drawer for the rare case you have to prove what your bank statement already knows.
Disclaimer: This article is general consumer-awareness and education only, not tax, legal or investment advice. Thresholds, rates, treaty positions, due dates and the case law summarised here are stated for AY 2026-27 (FY 2025-26) to the best of the author's knowledge as of mid-2026 and can change; confirm the current position at incometax.gov.in, and with the relevant company or its registrar, before acting. Treaty (DTAA) rates differ by country and can be amended by protocol — verify your specific treaty. For material amounts, contested credits, or cross-border NRI situations, consult a qualified chartered accountant. Finance Guided is not a SEBI-registered adviser, a Chartered Accountant in practice, or an Advocate, and earns no commission from any party named or implied.
Dinesh Kumar S
Founder & Author — Finance Guided · B.Sc. Mathematics, M.Sc. Information Technology · Chennai, Tamil Nadu
Dinesh writes a regulation-reader's column on Indian personal finance — every claim anchored to the actual Act, rule or circular it comes from. No product sales, no commissions, no paid placements.
0 Comments