Income tax query very urgent

Mr Mohnot nil returns are filed and duly accepted even if the assessees GTI is below taxable limit

Long term capital gains from listed securities on which securities transaction tax has been paid are exempted from tax u/s 10(38).

Short term capital gains are taxable at a flat rate of 15%.

Income from dividend from a listed company is exempt in the hands of the shareholder as per sec. 10(34).

Interest is taxable at normal provisions.

yes you can carry forward your intraday loss.

Yes,  Mahesh Garg is absolt. right,,,,,,,,,,,,,,

What an anwer given by Mr. Mahesh Garg. I really salute his answer.

Mr. Dattatreya H G

the problem faced by you have been faced by many of the assessees (following Cash basis accounting) for long.

The simple rule according to the law of income tax act is to claim the deduction in the year in which the income (on which TDS was deducted) is declared in the return.

accordingly as you are following the Cash basis of accounting you will show the income in A.Y: 2013-14 and you can claim TDS deducted thereon in A.Y:2013-14. If for any reason A.O doesn't give credit for the TDS deducted in A.Y:2013-14 then explanation is required to be given  to A.O to enable him to understand your case.

Dear Mahesh Garg,  Thanks for very prompt reply. I consider such acts as a great service to virtual illiterates in Tax matters like me. Somewhere  else in this site,I happened  to read an advice in a similar case. It recommended showing only the  TDS amount as income for a/y 2012-13 and also claim that same amount as TDS in the same a/y 2012-13(as shown in  Form 16A and Form 26AS) ,based on the  fact that TDS has actually been deducted in a/y 2012-13 and it has to be deducted from  my income apportioned to a/y 2012-13(of course, it is more than 10% ,for which I may not have any objection) . The  amount of cheque d/d 26/04/2012 which is net after TDS  may be shown as income of a/y 2013-14 and full tax may be paid by me in a/y2013-14. This will solve both  the problem of claiming TDS and following CASH method of acctng. It is an interesting argument.and appears very convincing. Do you approve of it?  will be grateful for an early response.   DATTATREYA H G     

Sir DATTATREYA H G  

yes you are right i have also read the above argument in this site. I do agree it's a good logical argument.

Although it's a good argument but provisions of income tax act doesn't anywhere supports such method.

Also there are case laws stating that TDS can be claimed only if income against which such TDS deducted is returned in a particular assessment year.

the following case law can be referred:-

The Chennai ITAT has held in  ITO Versus Shri Anupallavi Finance & Investmentsthat Where tax has been deducted at source and paid to the Central Government and income is assessable over a number of years, credit for tax deducted at source shall be allowed across those years in the same proportion in which the income is assessable to tax.

In this case deductor deducted TDS on accrual basis of income whereas deductee was declaring such income on cash basis as and when it was recieved by the deductee. The deductee-assessee however, claimed the credit of whole of TDS in the year of deductionstating that TDS deducted represents his income and is automaticaly offered to assessmentin the year of deduction. But the AO allowed claim of TDS on pro rata basis i.e on the basis of income offered for assessment.


However CIT (Appeals) allowed the whole claim of TDS in the year of deduction even though the corresponding income was not offrered for assessment in the same year, holding assessee having offered the amount of TDS as income for the year of deduction, credit for the same could not be denied to it.

On appeal to Tribunal the order of CIT was vacated holding that TDS will be allowed in the corresponding year in which income is assessable to tax.