‘Why should my wife pay Rs 5,000 tax for no mistake of hers?’

Do you have any personal income tax query?

Mihir Tanna, Associate Director, S K Patodia & Associates (external link), a chartered accountants firm that offers consultancy, audit and tax services, will answer your queries.

Please mail your queries at [email protected] with the subject line ‘Ask Mihir’ and Mihir Tanna will answer all your tax queries.

Vijay Agrawal: I received a demand notice after processing the ITR of Rs 2,000 for the FY 2019-20. I complied with the demand and paid the said amount immediately.

The amount paid is reflected in the Form 26 in the FY 19-20 i.e. FY for which demand is raised. Still said outstanding demand is showing in my IT account and fetching the interest, as well refund of Rs 1000 for the FY i.e. 2021-22 adjusted against the said outstanding demand and now the outstanding amount is Rs 1000 plus interest despite the amount being paid immediately. 

I raised the grievances in the IT portal several times but nothing happened. I need your advice in this regard.

Mihir Tanna: Once you make the payment, you have to provide details of the challan at income tax portal. After login, you have to provide response in outstanding demand tab, by selecting option “agree with demand”. Below that, you find new option “Yes, already paid and Challan has CIN”.

Provide details of challan in given box. If demand does not delete with reasonable time, you can send request for the same through CPGRAM.

Rajendran Ambady: Please provide correct advice in the following situation.

We filed ROI for AY 2019-20 on 30-10-2019 and paid a tax amount of Rs 1,20,03,465/- under section 115JB. Above return was processed u/s 143 (1) by intimation dated 19-05-2020. The Company has deposited Advance tax of Rs. 40, 00,000/- and ITR -6 for AY 2019-20 was filed under Section 139 on 30-10-2019 to obviate any violation in Tax compliance including the TDS claim of Rs. 87,29,484/-. In the Intimation order the assessing officer had accepted the income and other claims of the Appellant but had demanded Rs 97,85,148/- as balance tax and interest.

During the Assessment Year relevant to Previous Year 2018-19, the land under the ownership of the Assessee has been taken over by the Government for Guruvayur Dewaswam (GD). LA compensation of Rs.38565360/- (on 5- 2-2018), Rs.4,00,00,000/- (on 4-2-2019), and Rs.48,28,009/- on19-11-2020 were paid to the Petitioner Company. Deductor, GD did not deposit the TDS to government in relevant years, this resulted in the demand of Rs. 97,85,148/- on Company towards balance tax and interest in the intimation u/s 143 (1) dated 19-05-2020. GD deposited Rs.95,02,088 /- towards TDS and Rs.21, 25,421 /-towards TDS and interest on 30-1-2021 and filed TDS return for the Assessment Year 2021-22. (not AY 2019-20).

Deductor is delaying filing revised TDS return in spite of many requests even by Income tax authorities.

Can the Income tax department seek to recover Income tax with fine from Company for AY 2019-20, on mere fact that Petitioner could not account for deposit of such tax (TDS) (Rs.87,29,484/-, only because the deductor, after paying the compensation to Petitioner in relevant year, did not deposit TDS to government revenue? Should the assessee suffer for the fault of the deductor? We understand There is a bar under Section 205 and circular of CBDT in this matter.

Mihir Tanna: If TDS is deducted and there was delay in depositing TDS, said TDS amount cannot be recovered from deductee. There are some judicial pronouncements for the same which provides relief to taxpayer (deductee). But in given case, I understand that it is not case of delay but amount credited in different year.

In such a case, you can request to jurisdictional officer to provide credit of TDS in the year in which income is offered to tax though TDS is appearing in 26AS of subsequent year and it can be subject to litigation.

Abel Correa: As I understand I am liable for tax on income generated in India as an Indian Citizen, however my recent visit to Provident fund office got me wondering on hearing the office at PF office that the principal amount will be exposed to TDS on the Principal contribution that I do. 

Does this mean that now on saving will also be taxed? Please advise:

a) Does it make sense to continue investment in Provident Fund if the principal investment gets taxed?

b) Isn’t the income tax, by law, on the income generated, but never on the Principal or capital?

Mihir Tanna: Investment in provident fund is still one of the best modes considering rate of return and risk free return. From FY 2021-22, rules have changed.

Interest on an employee’s contribution to an EPF above Rs 2.5 lakh per annum is taxable and accordingly interest is also subject to TDS.

If employer is not contributing in the provident fund account, the threshold will be Rs 5 lakh per annum.

Sharad Deogekar: My wife has filed IT returns in time based on the Form 16 received from employer. It was noticed that the tax received as per 26AS was less than shown in Form16. 

Now employee has informed that it was a mistake in Form 16 and may issue revised Form 16.

Now if revised ITR is filed does she need to pay Rs 5,000 to IT for no mistake of hers?

Mihir Tanna: If original return is filed before due date and same is verified within 120 days (before filing revised return), late filing fee is not applicable.

Aasma Patel: I am salaried person. I am getting full tax benefit under 80C for home loan. Can I open NPS account for more tax benefit under 80ccd?

Mihir Tanna: Yes, an additional deduction for investment up to Rs 50,000 in NPS (Tier I account) is available exclusively to NPS subscribers under subsection 80CCD (1B). This is over and above the deduction of Rs 1.5 lakh available under section 80C of Income Tax Act.

You can read more of Mihir Tanna’s responses here.

Note: The questions and answers in this advisory are published to help the individual asking the question as well the large number of readers who read the same.

While we value our readers’ requests for privacy and avoid using their actual names along with the question whenever a request is made, we regret that no question will be answered personally on e-mail.

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