Demand Notice Ay 20-21

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A taxpayer has received a demand notice for AY 20-2021 due to a recomputation of their HRA exemption, which was found to be higher than the allowable limit. The notice also mentions unmatched credits. The taxpayer is seeking advice on whether to file a rectification, request a reprocess of the return, or appeal the demand, as their Form 16 and filed ITR2 reflect the same HRA details. They are also concerned about HRA claimed for only 8 months due to employment changes.

Divya

Divya (Querist)
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28 December 2021 I have received a Demand Order based on 143 reason - Exempt Allowance Sec 10(13A) is more than minimum of :a) 50% of (Basic + DA) orb) HRA .Hence amount exempt u/s 10(13A) is recomputed accordingly. Form 16 has the correct HRA and I filed the same on my ITR2 for Ay 20-2021 . Also its claims of unmatched credits as challan not valuable in AY. Both HRA and Challan is same as what I filled in my return. What should I do next . File a rectification as Reprocess the return . Do I need to ask my company anything regarding HRA calculation . for the said year I claimed HRA for only for 8 months , due to change in employment I missed submitting rent receipts to old company and same for not on their Form 16 . Could this cause a problem.

Dhirajlal Rambhia online

Dhirajlal Rambhia online

(Expert)
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28 December 2021 Unless the form 16 gets rectified, there are no chance to get relief under reprocess of return.

Divya

Divya (Querist)
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28 December 2021 Thank you , I am not intending to claim anything further ( for the missed period) than what is at present on Form 16 . and I claimed only what I have on Form 16 . Will this be an issue . Can I disagree with Demand and request reprocessing the returning without any changes

Dhirajlal Rambhia online

Dhirajlal Rambhia online

(Expert)
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28 December 2021 If your claim are genuine, better go for appeal, as rectification request will not yield any result. Still if you wish you may try.

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