New NCD reporting and taxation

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A user is experiencing an issue where their NCD maturity gain is being reported incorrectly by the deductor, leading to a TDS deduction based on a higher amount than the actual profit. This creates a mismatch between their Form 26AS/AIS and their Income Tax Return (ITR). While the deductor claims this is standard practice, the user is seeking clarification on the legality of reporting inflated income and has initiated a resolution request with TDSCPC and provided feedback in AIS.

Gan Ramesh

Gan Ramesh (Querist)
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16 August 2024 I recently had one of NCD matured. The NCD was bought in Jan.2023 for 10.20. It was Sold in mar.2024 for 10.50.
The deductor has declared again of 0.50 instead of 0.30. The TDS is 15% which is 10% of 0.50
(Of course multiplied by the no. of NCDs purchased). This is reflected in 26AS and AIS/TIS.
The deductor is refusing to change the amount earned under my PAN to 0.30.
How can this be resolved. I have updated my inputs in IT website.
thanks

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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16 August 2024 Deductor has correctly deducted TDS as the original issue price of NCD is Rs. 10/-
You can declare the gain as per your COA. In case of query you can clarify your gain based on purchase invoice.

Gan Ramesh

Gan Ramesh (Querist)
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18 August 2024 As the Income from NCD reported is higher than the actual income, there will be mismatch between 26AS / AIS and what is declared in ITR. (TDS is not an issue). Added to this mismatch, is the deductor claiming this is a standard practice among CAs for NCD starting 2024. My question is what provision or section under IT law allows a deductor to show more income to its client in their IT account (26As / AIS) ?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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18 August 2024 The only issue is you have purchased from market, while the deductor has allotted it at Rs. 10/- to all. Like you many would have purchased it from market at different rates. All those will declare the gain as per their own purchased price, while deductor would have deducted TDS at Rs. 0.50/- gain only. ITD will accept the gains as per their purchased price, even though TDS would have been as per form 26AS, equal for all.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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26 August 2024 Hope the query is resolved.

Gan Ramesh

Gan Ramesh (Querist)
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04 September 2024 Thank you are clarification. I have raised a "request for resolution" at TDSCPC. I have also given feedback in AIS indicating the amount reported is different than what I have actually received. So far, no update either from tdscpc or from AIS feedback. I assume there should not any issue, other than 26AS / AIS mismatch wrt ITR. Thanks again.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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04 September 2024 Good luck.

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