Interest for delay in filing

Tax queries 1169 views 2 replies

M.Sriram Shenoy

CA Final

814 Points Posted on 04 March 2008

Mr.A is an employee in XYZ partnership firm.His salary exceeds the basic exemption limit, but has no investments to claim deductions.While auditing the accounts of the firm(liable to tax audit u/s.44AB) for the Asst. Year 2007-08, it was found that the partnership firm had failed to deduct TDS on Mr.A's salary for the relevant Asst. Year. Upon advice, the said firm immediately deducted TDS and remitted it on 31.10.2007.Mr.A, whose tax payable exceeds Rs.5,000.00, has not yet filed his return for the Asst. Year 2007-08.Now my question is ;

Will interest u/s.234A,B and C be attracted if Mr.A files his return for the Asst.Year 2007-08 now.He has no other income except salary. People give out ambigous replies.Kindly assist.

Replies (2)

Sathyanarayana.B

Senior Executive- Finance

49 Points Posted on 04 March 2008

In this case both employee and firm in default. (1) when employee salary is exceeds basic exemption limit all assessee need to deduct TDS. In this case firm has violated IT Act. (2) If firm has not deducted TDS, employee must bring into the notice of the firm or suomoto remit advance tax within due dates. Otherwise he will be in default on other side. IF TDS is deducted on 31.10.07 and remitted to govt account same day will not effect previous year income(I assume here TDS issue pertains to 2006-07 p/y) In this case employee can file belated return after self assessment and caluclating 234A,B,and C to avaoid IT penal action.

CA. Kirti S. Ganatra

Service

1461 Points Posted on 05 March 2008

Both employee and employer are in default. So, Mr. A will have to follow Section 234A,B and C and Employer will have to follow Section 192 and Section 40