Tax credit for Tax deducted in current financial year on payment basis income already offer for tax

Tax queries 342 views 9 replies

SUNIL KUMAR JAIN

CA IN PRACTICE

52 Points Joined October 2009

My client had purchased 8% Government of India Bonds in 2016. The interest on bonds has already been offered for tax on accrual basis and included in income tax returns for A.Y. 2017-18 to A.Y. 2022-23. Now in the financial year 2022-23 relevant to assessment year 2023-24 the bonds have matured and payment has been made with accumulated interest. At the time of payment TDS has been deducted under section 193 on the entire accumulated interest of six years. In the income tax return for A.Y. 2023-24 interest of financial year 2022-23 was included and entire TDS was claimed. CPC has issued a defective return notice u/s 139(9) requiring the assessee to either offer for tax entire interest or claim proportionate TDS. Please suggest the right course of action from our side. Please also suggest whether newly inserted sub section 20 to section 155 of Income Tax act which is effective from 01/10/2023 will be applicable for A.Y. 2023-24, in case we have to claim only proportionate T.D.S. deducted u/s 193.

Thanks,

C.A. SUNIL JAIN

Replies (9)

RAJA P M

"Do the Right Thing...!!!"

128116 Points Joined January 2015

Yes, The inserted section applicable for AY 23-24...

RAJA P M

"Do the Right Thing...!!!"

128116 Points Joined January 2015

Originally posted by : RAJA P M
	Yes, The inserted section applicable for .....

It's AY 2024-25, sorry for the typo error..

Mahesh Shah

2341 Points Joined July 2017

Pl also clarify my query
Do we have to make hand written application to AO of our jurisdiction to claim 155(20)???
pl clarify

RAJA P M

"Do the Right Thing...!!!"

128116 Points Joined January 2015

Originally posted by : Mahesh Shah
	Pl also clarify my queryDo we have to make hand written application to AO of our jurisdiction to claim 155(20)???pl clarify

Yes, As per inserted section it will make application AO. He will make order or Intimation against Your application.

But, The Section into force from AY 2024-25.

As per above query the TDS will be claim through application to AO.

Mahesh Shah

2341 Points Joined July 2017

As I have gone through 8 percent govt bonds terms of tds

When int paid is non cumulative.....then tds had to be claimed in that financial yr along with int

When int is on cumulative.....then whole cumulative int along with tds had to be accounted in yr of maturity and not accural basis??

Same is case with 7.75 percent bonds ( now floating rate bonds)

Then this issue would not have arrived??

Am I right

sabyasachi mukherjee

27922 Points Joined May 2017

Pls upload a copy of the notice. Since tds has already been deducted.

Mahesh Shah

2341 Points Joined July 2017

Also there is a issue when rectification rights are with CPC ,...AO will not rectify...till CPC transfers rectification rights to AO

And since all system is auto computerised.....how to approach CPC to transfer rectification rights to AO??

Kindly guide

Thanks

SUNIL KUMAR JAIN

CA IN PRACTICE

52 Points Joined October 2009

Sir

The notice is attached. My confusion is that section 155(20) is effective from 01/10/2023 and it is a machinery provision, then why it should not be invoked for claiming refund for assessment year 2023-24. Please guide me if there is any clarification in this regard. Also if the TDS credit can-not be claimed in return of income for A.Y. 2023-24 relating to interest which has already been subjected to tax in earlier years, what will happen to that TDS. Will it remain unclaimed?

Thanks

C.A. SUNIL JAIN