Unclaimed TDS Credit - AY 2025-26

[PRIYAM KHAMBHATA]

Respected Sir

My client is self employed under Medical Profession. She is earning Professional Incomes and Income tax Return filing under presumptive taxation (under section 44ADA).

She has filed Return for AY 2025-26, claiming all professional receipts as per 26AS, but due to some inadvertent error, few TDS credits has not claimed, but its correspondingly Incomes have been offered for taxation in Income tax Return of AY 2025-26. Further, it is to be noted that such unclaimed TDS has been carried forward by inadvertent error.

Income tax Return of AY 2025-26, is processed under section 143(1)

Now, my query is that, How she claim unclaimed TDS and get such Refund ?

Is there any legal case laws that we would claim such unclaimed TDS by way of Rectification Application under section 154 of the Income tax Act. Please guide me for what would be the right path to get such unclaimed TDS credit. If you have any legal precedents on above issue. Kindly provide to me

Thanks

[Sanjeev Agarwal]

Unclaimed TDS for AY 2025-26

On the stated facts, Section 154 rectification is the preferred first remedy.

The assessee has:

• offered the entire professional receipts corresponding to the TDS to tax under Section 44ADA;

• TDS is reflected in Form 26AS/AIS;

• TDS was inadvertently not claimed in the ITR;

• return has already been processed under Section 143(1).

Legal basis

TDS credit is governed principally by Section 199 read with Rule 37BA. Where the corresponding income is offered to tax in the relevant assessment year, the TDS credit should ordinarily follow that income. Section 154 permits rectification of a mistake apparent from the record, including an intimation under Section 143(1).

Strong precedents

1. Vinayaka S. Veerabasappa v. ITO - ITAT Bangalore, 19.06.2026
   Very close to the present facts. TDS was inadvertently not claimed in the original return, was reflected in Form 26AS, and corresponding income was offered to tax. ITAT accepted the Section 154 route and directed allowance of TDS after verification.

2. RRB Energy Ltd. v. DCIT - ITAT Delhi
   Supports granting additional TDS credit through Section 154 even though it was not claimed in the original return.

3. NR Agrawal & Co. v. ITO - ITAT Mumbai, 18.12.2024
   Supports TDS reconciliation with Form 26AS and corresponding income for granting credit through rectification.

4. Daiwa Capital Markets India Pvt. Ltd. v. ACIT - ITAT Mumbai, 20.11.2025
   Additional TDS credit was allowed where TDS appeared in 26AS and corresponding income had already been offered.

5. Munchener Ru ckversicherungs-Gesellschaft v. CIT - Delhi HC
   Supports the principle that genuine TDS credit should not be denied merely on a technical/procedural ground.

Recommended action

File online Section 154 rectification against the 143(1) intimation, requesting:

TDS credit under Section 199 read with Rule 37BA for the TDS reflected in 26AS, since the corresponding professional receipts have already been fully offered to tax in AY 2025-26, with consequential refund and applicable interest.

Prepare a TDS-wise reconciliation: deductor TDS corresponding professional receipt receipt included in 44ADA turnover income offered TDS now claimed.

Risk assessment: Reasonably Defensible to Strong, particularly in light of Vinayaka S. Veerabasappa. If Section 154 is rejected, consider appeal/Section 264/Section 119(2)(b)/writ, depending on the exact rejection and limitation position.

AI Summary

TDS credit rectification allows correction of omitted credits where corresponding professional income was already offered to tax.
Unclaimed TDS credit relating to professional receipts already offered to tax may be sought through rectification under Section 154 where a return processed under Section 143(1) omitted TDS reflected in Form 26AS or AIS. TDS credit is linked to assessment of the corresponding income under Section 199 read with Rule 37BA. The rectification request should provide a TDS-wise reconciliation showing the deductor, corresponding professional receipt, inclusion in presumptive turnover, income offered, and credit claimed.