Income tax demand

Tax queries 478 views 8 replies

B

Others

32 Points Joined August 2015

Dear All,

I had received a demand notice from IT for the AY 2009-2010(FY 2008-09) for an amount of Rs 297831/-.I received this notice letter on 1st Jan 2013 and the matter is with AO.

The history is as below:

For the FY 2008-09,I was in India till dec(9months) and rest 3 months in Country A(Jan - Mar 2009).Now while filing returns in INDIA,I calculated:

- India taxable income

- Foreign income - Rent paid = Foreign taxable income

- Total income = India taxable income +Foreign taxable Income

- Tax on total income = X

- Tax paid on foreign income = Y(tax relief)

- Tax payable = X-Y

It seems that with demand notice,they have not considered Tax relief for tax paid in foreign.

I have applied for rectification and consideration which is still open at AO.

Questions -

- Is the tax relief correctly considered?

- Does DTAA has to do with this?

- What if there was no DTAA with the country?Will I still be getting tax relief for the tax paid?and how the calculations would differ?

- Will there be interest applicable,even if I filed the response 3 times so far since I received the notice?How much would be interest accumulated so far?

- The demand letter does not mention anything about interest details.

Thanks a lot to help

Replies (8)

B

Others

32 Points Joined August 2015

Please reply and help.Iam concerned due to the high demand amount and if there could be interest even if the action is at AO side

Udgam Koomar

Tax Technologist

1949 Points Joined August 2011

Yes DTTA does help in this

B

Others

32 Points Joined August 2015

Thanks Uttam,

So if there is no DTAA treaty at that time,then how the tax should be calculated and what would be the relief?

Could you please explain with an example,so that I can calculate accordingly?

Also since I hve appealed,will there be interest also applicable for the period things are under AO action?

Suren

ASE

117 Points Joined May 2011

Hello,

You calculation is not correct. If there is not DTAA you can still get tax relief under section 91 .. if i remember correctly .

Watch this to calculate your tax correctly .

https://www.youtube.com/watch?v=pXh8m7T5ooM

Thanks

Suren

ASE

117 Points Joined May 2011

Use ITR 2 form to, enter the value for respective heads and it will calculate the tax ..

babugr

dgm

518 Points Joined February 2014

Does it really take the AO to send a notice such a long time (in 2013) for 2008-09 ITR something not palatable. I do not know when their systems will improve may be after 5 years with 5 awards.

Suren

ASE

117 Points Joined May 2011

Unfortunately it is like that.

Did you revet back to AO in 2013 itself and since then it is pending with AO ?

Thanks

Lets have an example Mr.A is having income from INDIA of Rs.200000 and Rs.50000 from US. Tds has been deducted on his US income of Rs.5000 Calculation of relief u/s 91 Step 1 : Calculate tax liability on Rs.250000 for A/Y 2010-11 tax liability is Rs.9270 Step 2 : Calculate average tax on Rs.50000 US Income 9270*50000/250000 = Rs.1854 Step 3 : Calculate relief u/s 91 less of tax liability calculated in step 2 or tax paid in US i.e. 1854 or 5000 whichever is less Relief u/s 91 = Rs.1854 Step 4 : Calculation of Net tax liability Tax liability calculated in step 1 less relief calculated in step 3 i.e.9270-1854 = Rs.7416 Note : Section 91 is applicable in case DTAA doesn't exist b/w the countries in which assessee has earned income.

Read more at: /forum/section-91-dtaa-calculation-104245.asp