Reduction in income of last year

TDS / TCS 563 views 2 replies

Guest

Excess salary is paid by mistake to me for the year 2011-12 and TDS is already deducted and paid on the same and Form 16 is issued on this basis. Now the company intends to recover the same from my salary for 2012-13.

Should this recovery amount be deducted from my taxable income for 2012-13 ?

Should it should be shown as a deduction for the year 2011-12 and the related correction be made in my Form 16 and the TDS return filed by the company for 2011-12, thus enabling me to claim a refund for the year 2011-12?

Replies (2)

CA Mahesh Sharma

Service

33 Points Posted on 23 July 2012

That Recovery can be adjusted in the current year Salary income and you have to pay Tax only Net amount received for the year after excess salary reduced from your Gross total Salary.

This excess salary paid during last year is nothing but salary received in advance. So taxed on receipt basis. As salary income is taxed on receipt or due basis whichever comes early.

Vinod

CA in Practice

445 Points Posted on 25 July 2012

A related query: What is the remedy if somebody deducted tax less than the amount actually to be deducted, due to some wrong calculation etc. ? They already filed the quarterly TDS returns.

Another doubt : claim received under mediclaim policy is taxable or if exempted, under which section ? Sec. 10(10D) is only for life insurance policy.

Please share your views..

Thanks in advance..

vinodaca74 @ gmail.com