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Demand u/s 143(1)(a)

SKMslg (Student) (29 Points)

25 May 2017

Hello everyone, I had filed a income tax return of a salaried person in the month of Feb 17 for the AY 2016-2017. The total income TAX liability was Rs.130000(including cess). Full TDS was deducted by the co.(PSU) on timely basis and hence no tax was payable.

However last week the taxpayer received a notice u/s 143(1)(a) demanding Rs.380 interest u/s 234A.

I wanted to know if the claim is valid considering the fact that there was no tax obligation on the part of tax payer and what do i need to do now.

Also one more tax payer has received a demand of Rs. 3/- only. What do i need to do considering the fact of round off?

Thnx in advance

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11 Replies

PRABIR PAUL (*****Accountant***** Never insult to any person for any kind of lack of knowledge or misread.) (1443 Points)
Replied 25 May 2017

Section 234a is applicable in case you are filing a belated return.

As you have filed the belated return so you have to paid interest U/s 234a.

If not paid then you have to pay the interest portion.

CMA Swati Agarwal (Manager- F&A) (371 Points)
Replied 25 May 2017

The claim seems to be incorrect. You can file rectification request through online efiling portal, under the tab of "e-file".

1 Like

Prahlad Rai Sharma (63 Points)
Replied 25 May 2017

Belated return interest have to be paid u/s 234A as demanded

SANJEET KUMAR (AUDIT ASSISTANT) (70 Points)
Replied 25 May 2017

Income Tax Return for a financial year need to be filed within the time limit prescribed for each year for you. Your failure to file a return within this prescribed time or not file at all will attract this Interest.

Now, when you do not file your returns or miss the due date, you could be in one of these 3 distinct positions:

You have taxes outstanding to be paid to the IT department
You are eligible for a tax refund from the IT department
Your taxes have been perfectly paid with no refund expected or taxes payable.

If you fall into buckets “2” or “3”, you do not have to worry too much about late filing of your tax returns as interest may not be applicable in these two scenarios.

However, your Assessing Officer may still choose to charge some interest, this has been left to his discretion.

(Guest)

U/S 234 A interest is collected for belated return filed and it is not related with TDS.

1 Like

Venkatesh Pardeshi (22 Points)
Replied 25 May 2017

just pay the outstanding amount and ur problem will be solved

SKMslg (Student) (29 Points)
Replied 26 May 2017

Originally posted by : SANJEET KUMAR
	Income Tax Return for a financial year need to be filed within the time limit prescribed for each year for you. Your failure to file a return within this prescribed time or not file at all will attract this Interest. Now, when you do not file your returns or miss the due date, you could be in one of these 3 distinct positions: You have taxes outstanding to be paid to the IT department You are eligible for a tax refund from the IT department Your taxes have been perfectly paid with no refund expected or taxes payable. If you fall into buckets “2” or “3”, you do not have to worry too much about late filing of your tax returns as interest may not be applicable in these two scenarios. However, your Assessing Officer may still choose to charge some interest, this has been left to his discretion.

So in my case there is no tax payable as whole Tax Liability was settled by TDS...........so i need not worry (category 3).......... and also what do i need to do now

SKMslg (Student) (29 Points)
Replied 26 May 2017

well paying tax is not the problem ..... i wanted to know the validity of the demand

CS Advocate Abhishek Goyal (M Com FCS LLB M-AIMA ) (13531 Points)
Replied 26 May 2017

Section 234A interest is levied when there is an outstanding tax liability if the entire tax liability is settled in the form of TDS and there is no tax payable after considering TDS then interest u/s 234A is wrongly levied. You can file a rectification application.

1 Like

Farhaad Jiwani (Tax Consultant at Nagpur) (303 Points)
Replied 26 May 2017

As TDS is covering tax liability, hence no tax is balance to be paid. therefore no interest need to be paid. but in some cases AO at his discretion charge interest.

ALOK GOEL (chief manager) (593 Points)
Replied 27 May 2017

THE DEMAND NOTICE IS PURELY BASED ON OUTSTANDING AMOUNT AFTER RECONCILLING ALL TDS DEDUCTED BY COMAPNY/ BANKS ETC.

NOW THE DEMAND NOTICE NED TO BE NEUTALISED -

- BY RECTIFICATION REQUEST

- BY CHECKING ACTUAL VALUE OF TDS DEPOSITED BY COMPANY/BANK OR NOT OR LATE DEPOSITED OR LESS AMT DEPOSITED ETC. ( TAKE Form-16A from comapny//Bank and see any mismatch)

- SEND YOUR BASE DOCUMENTS SIGNED BY AUTHORITY ( FORM-16A BY COMPANY ) / 26AS FROM IT WEBSITE /TRACES TO AO SHOWING NO TAX LIABILITY. AO MAY SETTLE OR CARRYFORWARD FOR NEXT YEAR.

- LEAVE IT UNPAID AS IT IS LESS AMOUNT AND WILL CARRY FORWARD IN NEXT FY/AY RETURN WITH LITTLE INTREST. THIS IS TO BE SETTLED BY TAX PAYES DIRECTLY IN HIS NEXT YEAR RETURN.

Regards