Itr for ay 2015-16 - reporting spouse income

I think I am asknig too many questions.  Here is straight forward question 

1] I have few FD income in my spouse's name.  How to declare that income in my ITR? 

 

Regards

jaiHari

Under income from other sources. If tax was deducted on source and if you have not given declaration to the bank that this income belongs to you and should be clubbed in your hands, bank would deduct tax and will issue TDS certificate in name of your spouse , in which case she will also have to file for refund of TDS.

[ For more detailsCheck rule 37BA cited below]

If you do not declare your income and AO interdicts it then he may , in addition to doing assessment of the escaped income u/s 147 , initiated penatly u/s 271(1)(C) for furnishing inaccurate particulars of income or for concealment of income. 

On a side note penatly u/s 271(1)(c) can be upto 3 times the tax, tax shall also be recovered with interest

[There was a constant smile while I was reading and replying this, thanks ]

hmm... interesting Q, you know if AO sends you notice u/s 148 for doing assessment of escaped income then you can demand from him the reasons on which he selected your case. 

Some of the returns are selected for scrutiny , a lot can happen in that.

They can ask for your marriage certificate,enquiry of the neighbors and your relatives this will prove whether you are married or not. (but this might not happen)

They will see how your spouse got funds to make so many investments, they can also check your & your spouse's bank passbook for this purpose. Have you transferred the money or not.

If such investments are NOT EXPLAINED then they can be treated as income and shall be taxed at maximum marginal rate of 30% cess etc, that too without any deductions therefrom.

S.69 Where in the financial year immediately preceding the assessment year the assessee has made investments which are not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of the investments or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the value of the investments may be deemed to be the income of the assessee of such financial year.

115BBE. (1) Where the total income of an assessee includes any income referred to in section 68, section 69, section 69A, section 69B, section 69C or section 69D, the income-tax payable shall be the aggregate of—

(a)  the amount of income-tax calculated on income referred to in section 68, section 69, section 69A, section 69B, section 69C or section 69D, at the rate of thirty per cent; and

(b)  the amount of income-tax with which the assessee would have been chargeable had his total income been reduced by the amount of income referred to in clause (a).

(2) Notwithstanding anything contained in this Act, no deduction in respect of any expenditure or allowance shall be allowed to the assessee under any provision of this Act in computing his income referred to in clause (a) of sub-section (1).

Rule 37BA. (1) Credit for tax deducted at source and paid to the Central Government in accordance with the provisions of Chapter XVII, shall be given to the person to whom payment has been made or credit has been given (hereinafter referred to as deductee) on the basis of information relating to deduction of tax furnished by the deductor to the income-tax authority or the person authorised by such authority.

(2) [(i) Where under any provisions of the Act, the whole or any part of the income on which tax has been deducted at source is assessable in the hands of a person other than the deductee, credit for the whole or any part of the tax deducted at source, as the case may be, shall be given to the other person and not to the deductee :

Provided that the deductee files a declaration with the deductor and the deductor reports the tax deduction in the name of the other person in the information relating to deduction of tax referred to in sub-rule (1).]

(ii) The declaration filed by the deductee under clause (i) shall contain the name, address, permanent account number of the person to whom credit is to be given, payment or credit in relation to which credit is to be given and reasons for giving credit to such person.

(iii) The deductor shall issue the certificate for deduction of tax at source in the name of the person in whose name credit is shown in the information relating to deduction of tax referred to in sub-rule (1) and shall keep the declaration in his safe custody.

(3) (i) Credit for tax deducted at source and paid to the Central Government, shall be given for the assessment year for which such income is assessable.

(ii) Where tax has been deducted at source and paid to the Central Government and the income is assessable over a number of years, credit for tax deducted at source shall be allowed across those years in the same proportion in which the income is assessable to tax.

(4) Credit for tax deducted at source and paid to the account of the Central Government shall be granted on the basis of—

subject to verification in accordance with the risk management strategy formulated by the Board from time to time.

271. (1) If the Assessing Officer or the Commissioner (Appeals) or the [Principal Commissioner or] Commissioner in the course of any proceedings under this Act, is satisfied that any person—

(c)  has concealed the particulars of his income or furnished inaccurate particulars of such income, 

he may direct that such person shall pay by way of penalty,—

in addition to tax, if any, payable by him, a sum which shall not be less than, but which shall not exceed three times, the amount of tax sought to be evaded by reason of the concealment of particulars of his income or fringe benefits or the furnishing of inaccurate particulars of such income or fringe benefits.

S.147 If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year) :

Originally posted by : Z
	hmm... interesting Q, you know if AO sends you notice u/s 148 for doing assessment of escaped income then you can demand from him the reasons on which he selected your case.

Thanks for details response to my query.   I was wondering why AO would send notice?  Yesterday only I sent my ITR-V to CPC bangalore via normal post.  I have not reported spouse income in "Income from other sources".   I wanted to know how would AO know that I have not reported my spouse income?   I have a refund of Rs 5K and if my ITR gets processed and I get my refund then I should be fine right?  I have not filed return for my spouse yet.  

Can I pay the tax while filing return for my spouse?

Hi, 

Today I received SMS from IT dept about my ITR being processed and a Refund is sent to Refund Banker.

So I am good as far as my ITR is concerned.

Now my question is.  I have not yet submitted ITR for my wife.   My wife has interest income and bank deducted 10% as TDS.  How to file ITR for my wife to declare interest income and pay tax as per my tax slab?

Should I directly submit ITR for spouse with whatever deduction bank did (i.e. 10%)?

Firstly, sorry I forgot to reply to your earlier post.

"I wanted to know how would AO know that I have not reported my spouse income?"

Entire Income tax is about knowingness only. AO can enquire about the information in case of scrutiny [S.143(3) or say income escaping assessment S.147]

Sir I have explained you the right course of action. I still recommend that the income from FD be shown under your income from other sources. For this you may revise your return u/s 139(5)

Is it that your income is taxable at higher slab rate whereas your spouse's income is under lower slab rate

As far as your spouse's return in concerned, if you declare this interest income under your income then she should file nil income and fill in the details of TDS in order to claim refund.

My ITR is already processed and even refund too got generated.

You still suggesst me to file revised ITR?   

Do you think IT sends notice even after processing of ITR?

Yes, I am in 30% tax bracket and TDS deducted for spouse by bank was 10%

Yes I still DO recommend revising ITR .

Are you under misconception that once return is processed u/s 143(1) , the assessment is final ? REASSESSMENT can be done under following sections -154,147,143 oh & ofcourse I do have notice of cases wherein return was processed & notice were issued under either of the above provisions (that too with interest & penalty) . Rest sir is upto you . I know what can be done in the scenario you are telling & perhaps someone else might even recommend you that but am not into tax evasion .

Thank you sir for your valuable inputs.  I will plan to do as follow

1] file my spouse's ITR and get refund for 10% TDS which bank cut on FD income in her name

2] file my revised income with clubbing of FD income from spouse as per my tax slabs

However, I observed that, if I pay more tax than I am liable for, IT dept won't send refund in case i have not claimed it while submitting ITR.

How can IT department accept excess tax paid?

Other concern is that IT department should have sent me the notice about "not reporting my spouse income"  while processing ITR which I submitted last month but to my surprise, they issued a refund!

Do you think IT dept. will re-process the ITRs which are already processed and closed?

"However, I observed that, if I pay more tax than I am liable for, IT dept won't send refund in case i have not claimed it while submitting ITR."

How will they provide it unless you dont claim it in your return, its the only way to claim refund.

There are many time limits for sending the notices for eg S. 149 has 3 limits - Notice can be sent within [4 years, 6 years (if escaped income is more than 1 Lac) and 16 Years (assessee has foreign asset) ] from the end of relevant assessment year.

S. 154 has 4 year from the end of relevant assessment year.

Also I would like to tell that when a return is processed u/s 143(1), it is done by the system automatically, herein only arithematical errors and incorrect claim, if such incorrect claim is apparent from any information in the return, is considered. Since 100% of the returns are to be processed u/s 143(1) probing into details at this stage is not possible. The main provisions like 143(3) ,147 ,154 can take time and comes after 143(1)

wow, that was quite a thread. Wont complicate it further I should say!!