Calculation of income for purpose of filing return

Tax queries 287 views 2 replies

Simba

Service

24 Points Joined July 2015

My query is related to calculation of Income for the purpose of filing the Income Tax Returns: Assume that my gross salary is INR 10,00,000/- (ten lakhs only) My company has delayed the salaries and has only paid me salaries for 6 months. However when issuing Form-16 they have shown entire 10 lakhs as paid and also paid the taxes for the same. The calculation of tax is correct. Now what should I be showing as my income for the current year? Should I show it as 10 lakhs and show zero tax payable/refundable? Or Should I show my income is 5 lakhs and claim the tax refund for the balance 5 lakhs? My concern is that when I get paid the balance 5 lakhs in the next financial year I should not be charged tax for the same again? Then I would have to go through the entire process of justifying the calculation. Any guidance will be highly appreciated. Thanks,

Replies (2)

Udgam Koomar

Tax Technologist

1949 Points Joined August 2011

Since you have not actually got the salary its illegal to issue form 16 on fudged data. You can file return for the actual amount and take benifit of th Section 89(1) in the year you get arrear salary paid. Its difficult to advise you as you are with wrong certified data copy invalid in the world of incometax. So first try to get real form 16.

Z

Tax Consultation (US and India)

2970 Points Joined September 2011

As per S.15 , which is the charging section, salary income is taxable on due basis , whether it has been paid or not

Relevant Extracts from S.15

" The following income shall be chargeable to income-tax under the head "Salaries"—

(a) any salary due from an employer or a former employer to an assessee in the previous year, whether paid or not;"

Do check for traces logo on form 16 and declare the income from salary as 10 Lakhs .

On a side note I would like to mention that u/s 192 the Co. is liable to deduct tax at the time of PAYMENT ONLY. However there shall be no consequences on you.

DO NOTE HOW MUCH TAX THEY DEDUCT ON NEXT PAMENT.

[Co. should not have deducted tax on 10 Lacs, but should have deducted only on the paid amount and for rest 5L, you were suppose to the self assessment / Advance Tax . Co's action has saved you from this]