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Received defaults notice for tax on sale of property

Vineet (Engineer) (30 Points)

07 May 2016

I am buyer of the property.

I paid seller on Date 25-Jun-2015 amount rs : 7823045/- (RTGS) . On 04-July-2015 I deposited the 1% TDS online on Incometax site for amount Rs : 78231/-.

Entries on Form 26QB look like -

Date of Agreement/Booking: 25/06/2015

Date of Payment/Credit: 25/06/2015

Date of Tax Deduction : 04/07/2015

Now IT department as given me an sms for "Defaults have been identified in the regular statement file by you for PAN ending ****"

I logged in traces of checked the details. Is shows -

Interest on Deduction Default u/s 201

3(a) Interest on Late Deduction: Rs 1564.00

Please help why did I get his notice and how could things be corrected if I made come mistake ?

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8 Replies

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 07 May 2016

date of tax deduction is irrelevent, as it has to be deducted FROM the payment so the deduction date should be 25/06/2015, if the entry is made errorneeously then rectify it, and resubmit as date of deduction 25/06/2015

date of deposit of TDS and filing TDS return matters

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Vineet (Engineer) (30 Points)
Replied 07 May 2016

Thanks for the prompt reply Sharma Ji,

But I am a bit confused here -

1. Is it because of incorrect "date of tax deduction" that I got Notice. If yes, is it as compliant with rules? because payment date is 25-Jun-2015 so last date for deduction should be 07-July-2015. Also Why Interest is 2% ?

Lastly Please guide, If I correct this date and resubmit, will it resolve the issue?

2. As you suggested "date of tax deduction is irrelevent" is the reason behind notice is some thing else. Please help me understand it.

Vineet (Engineer) (30 Points)
Replied 10 May 2016

Please help me resolve the same.. Thanks in advance for your valuable inputs..

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 11 May 2016

Originally posted by : Vineet
	Thanks for the prompt reply Sharma Ji, But I am a bit confused here - 1. Is it because of incorrect "date of tax deduction" that I got Notice. If yes, is it as compliant with rules? because payment date is 25-Jun-2015 so last date for deduction should be 07-July-2015. Also Why Interest is 2% ? Lastly Please guide, If I correct this date and resubmit, will it resolve the issue? 2. As you suggested "date of tax deduction is irrelevent" is the reason behind notice is some thing else. Please help me understand it.

date of deduction is 25th june 2015 as you have made payment to seller AFTER deduction of TDS

date of payment is 7th July 2015,

date of deduction is not same as date of payment , try to understand

D J M (Chartered Accountant) (35 Points)
Replied 11 May 2016

Sir,

I suggest you to file a correction statement of Form 26 QB and edit date of deduction as 25-06-2015. (date of payment and date of deduction shall be the same)

The interest rate is not 2%. Interest is calculated @ 1% per month for two months. In Form 26QB already filed, date of payment is 25-06-2015 and date of deduction is 04-07-2015. Hence, interest will be calculated @ 1% per month for the month of June 2015 and also for the month of July 2015.