ITRU Can we file the same without additional tax under 140B

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A user is seeking advice on filing an updated Income Tax Return (ITRU) for FY 20-21. Their friend received an IT notice with a net taxable income of Rs 255,000 and TDS deducted of Rs 2,500. The user wants to know if the TDS can be used to offset the Rs 1,000 penalty under Section 234F, or if they must pay additional tax under Section 140B, especially since the net income is below Rs 5 Lakhs.

Manik

Manik (Querist)
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27 March 2024 Dear Experts,

For FY 20-21 one of my friends has received IT Notice. When we checked he has got Net Taxable Income of Rs 255000 on which TDS has also been deducted for about Rs 2500.

When we try to file ITR(U) for the same, my question is as follows : -

1. Can the TDS Deducted of Rs 2500 be allowed to be set off against Penalty under Sec 234F of Rs 1000. System is not allowing us to do the same and we we checked online they say we have to mandatorily deposit additional tax under 140B so that will be additional tax deposit.

Kindly suggest what can be the possible solution without depositing additional tax under 140B as his Net Income is less than Rs 5 Lakhs.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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28 March 2024 You have to mandatory deposit of additional tax then only you can file updated return. Filing updated return with 1000 late fees will not considered as additional payment of tax.
In your case no need to file updated return reply to the notice.

Manik

Manik (Querist)
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28 March 2024 Sir do i need to Deposit Rs 1000 Additional Tax under Sec 140B and then proceed with the Updated Return.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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28 March 2024 Yes, show higher income in updated return so that return show 1000 tax payable.

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