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Adjustment intimation for section 143(1)(a) ii

Rohit (Self) (31 Points)

23 December 2019

Received intimation under section 143(1)(a) for capital gains/loss

i used tool 112A to populate CG part of ITR2 Assessment year 19-20

the difference claimed by IT dept is dues to one equity having gain of Approx Rs 4K. Using 112A tool the gain is not offsetting against loss from other equity ltcg (losses).

the above gain situation is a case where the unit acquisition cost is 0(bonus) acquisition date 26-Oct-2017, sale proceeds is Rs4k sale date 08-Feb-2019. As per 31st Jan 2018, fair market value is around Rs 5.5K. So there is no ltcg liability but gain is shown as '0' per tool 112A causing the difference to come.

what is the advise here?

Regards

R Ahuja

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6 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160327 Points)
Replied 23 December 2019

Hundreds of taxpayers are believed to have received notices from the income tax (I-T) department whose systems are unable to process the tax returns correctly. This has led to bloated tax liability on capital gains and denial of credit for tax deducted at source (TDS), among other discrepancies.

Senior accountants have drawn the attention of Pramod Chandra Mody, chairman of Central Board of Direct Taxes (CBDT), regarding the errors at the department’s Central Processing Zone (CPC) in Bengaluru.

After years, Indians will be taxed on their long-term capital gains at 10% if such gains are more than Rs 1 lakh. In grandfathering the tax rule, the government had pegged the price of a stock on February 1, 2018, or the actual purchase price, whichever is higher, as the cost in computing the gain. For instance, if a stock is purchased at Rs 500 in 2016 and sold at Rs 900 in March 2019, while the share closed at Rs 800 on February 1, 2018, the gain is Rs 100, and not Rs. 400/-

The department’s software system is failing to compute the long-term capital gains (LTCG), particularly gains involving multiple stocks.

Another error in LTCG computation relates to shares acquired between February 1, 2018, and March 31, 2018.

According to Ameet Patel, chairman, Taxation Committee, of the Bombay Chartered Accountants' Society, “Returns filed by thousands of tax payers using different versions of the government utility at different points of time are being processed by the CPC and to their shock, they are getting notices from CPC stating that the CPC proposes to make adjustments to the long-term capital gains shown in the return. This is happening in many cases, causing unnecessary hardship.”

Read more at: Economic Times ...

4 Like

Kapadia Pravin (17249 Points)
Replied 23 December 2019

CPC started sending ,..,,...... Following messages to assesseees ----

Please refer to intimation for PAN:AFTxxxxx0N & AY:2019-20. Technical issues caused errors. Inconvenience regretted. We will do rectification. Pls wait for it.

Rohit (Self) (31 Points)
Replied 24 December 2019

Thanks for the reply. This appeared to be a mistake and IT deptt acknowledged it thru sms yesterday.

Will now have to wait for futher communication. The issue may become difficult to respond if there is no further communication till the last date for me to respond.

Will wait and watch.

Thanks again.

Regards

Rohit

Rohit (Self) (31 Points)
Replied 07 January 2020

Hello - IT Dept issued another intimation. Now the email has details for Deductions under health insurance. However it does not talk about the earlier intimation details about 'CG'. Does it mean the new email supercedes the earlier email? Should this treated separate?

The reason I am asking is because, I did get email and sms from IT Deptt confirming that there are mistakes and asked to hold.

When I login to IT deptt website, I see both notices under Sec 143 (a) ii.

Please help how do I read this?

Regards

Rohitash