Tds urgent plz help
This query is : Resolved
VANYA GARG
(Querist)
18 March 2012
Sir,
Plz help me in the following situation-
A deductor deduct the TDs on salary after allowing deduction of agriculture income.
Now the ITO issues a notice disallowing the agriculture income.
Plz help me what to do in this respect to avoid the demand issued by the AO?
Plz help me in the following situation-
A deductor deduct the TDs on salary after allowing deduction of agriculture income.
Now the ITO issues a notice disallowing the agriculture income.
Plz help me what to do in this respect to avoid the demand issued by the AO?
VANYA GARG
(Querist)
19 March 2012
Plz help me....
Its urgent.......
Its urgent.......
VANYA GARG
(Querist)
25 March 2012
Plz help me....
Anyone Plz help me
Anyone Plz help me
02 August 2025
Got it — here’s what’s going on and how to handle it:
**Situation:**
* The deductor deducted TDS on salary **after excluding agricultural income** from the gross income.
* But the Assessing Officer (ITO) disallowed the agricultural income exemption, meaning total income is higher than what was considered for TDS.
* This causes a **shortfall in TDS deduction** because tax was calculated on a lower taxable income.
* As a result, AO may issue a **demand for tax** on the difference.
---
### What to do to avoid or minimize demand:
1. **Rectify the TDS:**
* Ideally, TDS should be calculated on **total income including agricultural income** (since AO disallowed exemption).
* So, you can ask the deductor to **deduct the shortfall TDS** on salary immediately and deposit it.
2. **Issue Revised TDS Certificate:**
* Deductor can issue a **corrected TDS certificate** (Form 16) reflecting the correct tax deduction.
* This helps the employee show correct TDS credit.
3. **Communication with AO:**
* Submit proof of the additional TDS deducted after disallowance to the AO.
* This may reduce or waive penalty/demand on non-deduction initially.
4. **File Revised Return:**
* The employee should file a **revised income tax return** showing the corrected income and TDS.
* This will help avoid tax demand during assessment.
5. **If demand is already issued:**
* Pay the tax demand along with interest if applicable.
* You can file a **rectification request** or **appeal** citing that short TDS was due to genuine misunderstanding regarding agricultural income exemption.
---
### Key Points:
* Agricultural income is **not taxable but is considered for rate purpose**.
* If AO disallows exemption, TDS must be on full salary including agricultural income.
* Deductor’s responsibility to deduct TDS correctly; employee can request revised TDS certificate.
* Early action can save penalties and interest.
---
If you want, I can help draft a letter for deductor or AO, or guide you on calculating short TDS. Just let me know!
**Situation:**
* The deductor deducted TDS on salary **after excluding agricultural income** from the gross income.
* But the Assessing Officer (ITO) disallowed the agricultural income exemption, meaning total income is higher than what was considered for TDS.
* This causes a **shortfall in TDS deduction** because tax was calculated on a lower taxable income.
* As a result, AO may issue a **demand for tax** on the difference.
---
### What to do to avoid or minimize demand:
1. **Rectify the TDS:**
* Ideally, TDS should be calculated on **total income including agricultural income** (since AO disallowed exemption).
* So, you can ask the deductor to **deduct the shortfall TDS** on salary immediately and deposit it.
2. **Issue Revised TDS Certificate:**
* Deductor can issue a **corrected TDS certificate** (Form 16) reflecting the correct tax deduction.
* This helps the employee show correct TDS credit.
3. **Communication with AO:**
* Submit proof of the additional TDS deducted after disallowance to the AO.
* This may reduce or waive penalty/demand on non-deduction initially.
4. **File Revised Return:**
* The employee should file a **revised income tax return** showing the corrected income and TDS.
* This will help avoid tax demand during assessment.
5. **If demand is already issued:**
* Pay the tax demand along with interest if applicable.
* You can file a **rectification request** or **appeal** citing that short TDS was due to genuine misunderstanding regarding agricultural income exemption.
---
### Key Points:
* Agricultural income is **not taxable but is considered for rate purpose**.
* If AO disallows exemption, TDS must be on full salary including agricultural income.
* Deductor’s responsibility to deduct TDS correctly; employee can request revised TDS certificate.
* Early action can save penalties and interest.
---
If you want, I can help draft a letter for deductor or AO, or guide you on calculating short TDS. Just let me know!
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