Dear Friends and Respected professionals,
An individual assessee who is a NRI has received notice in income portal u/s 133(6) for AY 21-22, where he has received interest income from NRO accounts in India. One of his bank wrongly deducted TDS @ 7.5% instead of 20% rate applicable for NRI. As he was a NRI, he did not file return and also was not aware of this wrong deduction. Now the dept. in the notice asking him to file an ITR-U, when we compute tax liability along with interest it also considers penalty of 50% (of tax and interest payable). The demand payable now is relatively higher including all interest and penalties.
Please provide your guidance to reply to department in this issue and is there an option to avoid penalty in this specific case.
Thank you in advance.
CAclubindia
