Tax Demand of ₹4,650 for AY 2026-27
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13 August 2026
Dear Sir/Madam,
I seek your expert advice regarding a tax demand of ₹4,650 raised by the Income Tax Department under Section 143(1) for AY 2026-27.
The relevant facts are as follows:
1.I was employed in the UAE from 3 March 2025 to 7 March 2026.
2.I was physically outside India throughout FY 2025-26. My passport records support this.
3.The entire salary income of ₹4,88,832 reported in my ITR relates to my UAE employment.
4.0I was treated as Non-Resident in the ITR, and the same residential status appears in the Section 143(1) intimation.
5.The CPC has included the entire ₹4,88,832 as taxable salary and calculated total tax liability of ₹4,657, against which only ₹4 TDS credit has been allowed, resulting in a demand of ₹4,650.
6.No interest or late-filing fee has been charged.
7.The salary was credited to my Indian bank account.
I would particularly like your advice on the following:
Whether the UAE salary of ₹4,88,832 is taxable in India, considering my Non-Resident status and the fact that the employment was performed entirely in the UAE.
Whether the fact that the salary was credited directly to an Indian bank account changes its taxability.
Whether the India-UAE DTAA, particularly the provisions relating to employment income, provides any relief.
Whether the amount should have been reported differently in ITR-2, such as under Schedule EI/FSI/TR or another appropriate schedule, if applicable.
Whether there is a valid and strong case for filing a Section 154 rectification request against the 143(1) intimation.
If rectification is appropriate, what exact correction should be made, and what documents/evidence should be submitted?
Should the ₹4,650 demand be paid while rectification is pending?
I would appreciate your professional opinion on the correct tax treatment and the appropriate course of action.
Kind regards,
Yousuf
I seek your expert advice regarding a tax demand of ₹4,650 raised by the Income Tax Department under Section 143(1) for AY 2026-27.
The relevant facts are as follows:
1.I was employed in the UAE from 3 March 2025 to 7 March 2026.
2.I was physically outside India throughout FY 2025-26. My passport records support this.
3.The entire salary income of ₹4,88,832 reported in my ITR relates to my UAE employment.
4.0I was treated as Non-Resident in the ITR, and the same residential status appears in the Section 143(1) intimation.
5.The CPC has included the entire ₹4,88,832 as taxable salary and calculated total tax liability of ₹4,657, against which only ₹4 TDS credit has been allowed, resulting in a demand of ₹4,650.
6.No interest or late-filing fee has been charged.
7.The salary was credited to my Indian bank account.
I would particularly like your advice on the following:
Whether the UAE salary of ₹4,88,832 is taxable in India, considering my Non-Resident status and the fact that the employment was performed entirely in the UAE.
Whether the fact that the salary was credited directly to an Indian bank account changes its taxability.
Whether the India-UAE DTAA, particularly the provisions relating to employment income, provides any relief.
Whether the amount should have been reported differently in ITR-2, such as under Schedule EI/FSI/TR or another appropriate schedule, if applicable.
Whether there is a valid and strong case for filing a Section 154 rectification request against the 143(1) intimation.
If rectification is appropriate, what exact correction should be made, and what documents/evidence should be submitted?
Should the ₹4,650 demand be paid while rectification is pending?
I would appreciate your professional opinion on the correct tax treatment and the appropriate course of action.
Kind regards,
Yousuf
13 August 2026
Taxability: The salary is exempt from Indian tax under Article 15 of the India–UAE DTAA (Section 90(2)), as services were rendered entirely in the UAE.
Why Demand Occurred: CPC processed the return without granting DTAA relief due to missing/incomplete entries in Schedule FSI / Schedule TR.
Action Required: Disagree with the demand on the portal, file a Section 154 Rectification, and do not pay the ₹4,650 demand while the rectification is pending.
Why Demand Occurred: CPC processed the return without granting DTAA relief due to missing/incomplete entries in Schedule FSI / Schedule TR.
Action Required: Disagree with the demand on the portal, file a Section 154 Rectification, and do not pay the ₹4,650 demand while the rectification is pending.
22 August 2026
Schedule FSI/TR is available only in the case of a resident
I have entered the salary amount in Schedule Salary and
Schedule EI.4: Income claimed as not chargeable to tax under the DTAA (Applicable to Non-Residents only)
I have entered the salary amount in Schedule Salary and
Schedule EI.4: Income claimed as not chargeable to tax under the DTAA (Applicable to Non-Residents only)
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