Form 130 vs Form 168 Reconciliation Guide for AY 2026-27 (Tax Year 2025-26)

Introduction

Under the unified tax administration rules introduced by the Income Tax Act 2025, legacy tax forms have been renumbered to simplify compliance. For the Assessment Year 2026-27 (Tax Year 2025-26), salaried employees must reconcile their employer-issued Form 130 (formerly Form 16) with their portal-generated Form 168 (formerly Form 26AS/AIS) before submitting their return. The Income Tax Department uses automated algorithms to match these disclosures. Even minor discrepancies between your reported salary and the data in Form 168 can trigger automated tax notices.

This guide provides a practical workflow to reconcile Form 130 and Form 168, ensuring error-free filing.

Scope Clarification

What This Article Covers

• Understanding Form 130 (TDS certificate) and Form 168 (tax passbook) under the new Act.
• Step-by-step reconciliation checks for salary components, allowances, and tax credits.
• Submitting feedback for erroneous entries on the e-filing portal.
• Preventative steps to avoid automated adjustment notices under Section 143(1).

What This Article Does Not Cover

• Restructuring company payroll systems or corporate compliance audits.
• Resolving portal login issues or resetting digital signatures.
• General investment advisory or portfolio planning.

Legal Reference Block

Relevant Provisions of the Income Tax Act 2025:

• Section 203: Mandates every employer to deduct TDS and furnish Form 130 (TDS certificate) to the employee.
• Section 285BB: Governs the maintenance of Form 168 (Annual Information Statement/Tax Passbook) on the portal.
• Section 143(1)(a): Empowers the Central Processing Centre (CPC) to make automated adjustments to your returned income based on mismatches with Form 168.

The Reconciliation Workflow: Step-by-Step

Salaried taxpayers should complete this audit checklist before clicking submit:

Step 1: Download Your Documents

• Obtain your completed Form 130 from your employer's HR department.
• Log in to incometax.gov.in, navigate to the Services menu, select the Annual Information Statement option, and download both the AIS and TIS (which compile into Form 168).

Step 2: Compare Gross Salary Disclosures

Ensure that the gross salary declared in Part B of Form 130 matches the salary income recorded under the "SFT" or "TDS" tabs of Form 168. If your employer has failed to deposit TDS or reported incorrect values, your Form 168 will show a lower amount, triggering a discrepancy flag.

Step 3: Reconcile TDS Credits

Cross-verify the total TDS deducted in Part A of Form 130 against the TDS credits showing in Form 168. If there is a difference, the portal will disallow the TDS claim, leading to a surprise tax demand.

How to Submit Feedback for Portal Discrepancies

If your Form 168 displays incorrect transactions (e.g., duplicated stock sales or a bank interest entry that belongs to another PAN holder), you must submit portal feedback:

1. Open the online Form 168 screen.
2. Select the specific transaction that contains errors.
3. Choose the appropriate feedback option from the dropdown (such as "Information is duplicate", "Information is not fully correct", or "Information relates to another taxpayer/year").
4. Submit the feedback. The Tax Information Summary will update, allowing you to file without triggering automated audits.

Common Reconciliation Mistakes

• Filing Immediately on Receiving Form 130: Many employees file as soon as they receive their Form 130 in June. If the employer has not yet finalized their quarterly filings, Form 168 will remain blank or outdated, resulting in disallowance of TDS credits.
• Ignoring Bank Interest: Form 130 only covers salary. If your Form 168 shows interest from fixed deposits exceeding the basic limits, you must report it under "Income from Other Sources."
• Omitting Multiple Form 130s: If you changed jobs during the tax year, ensure you reconcile Form 130 from both employers against your Form 168, and combine standard deductions correctly.

Conclusion

Reconciling Form 130 and Form 168 before submitting your return is the most effective safeguard against automated notices. By verifying gross amounts and tax credits, and submitting online feedback for errors, you can secure complete compliance.