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What will cpc do in this case ?

Dipjyoti Majumdar (CA in service & CS. dipmaj@ rediffmail.com ) (3468 Points)

25 March 2014

Friends,

Suppose a salaried tax payer has some interest on FDs with banks on which tax has ben deducted by banks.

Naturally the same is reflected in 26AS. But as the assessee has not realised the interest in cash in his savings account as the FDs are not yet matured, he files his return without showing interest income and without claimimg TDS.

Will the CPC while making an assessment under section 143(1) add the interest income and tax credit to the salary income as filed in the ITR ?

Regards,

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10 Replies

Vardan Singh Sengar (Accounts Manager in Private Company) (433 Points)
Replied 25 March 2014

AS PER MY KNOWLEDGE AN INDIVIDUAL WILL GET A NOTIFICATION FROM CPC REGARDING PROPER CALCULATION OF HIS INCOME WHETHER RECEIVED OR RECEIVABLE AND FILE THE ITR ACCORDINGLY.

Manoj Mehta (Head Of Department (Accounts & Finance)) (1479 Points)
Replied 25 March 2014

Dear Dipjoyti, 143(1) intimation is just a calculation correction which initially gives an assessee an idea of his processing status. I.e tax payble or refund etc. So it will not add amount from 26as automatically. But i suggest in this case to file his revise return. Regards

Vardan Singh Sengar (Accounts Manager in Private Company) (433 Points)
Replied 25 March 2014

exactly...................................

Income Tax Wala: (Fin. Expert) (Chartered Accountants) (2010 Points)
Replied 25 March 2014

Dipjyoti

Manoj is absolutely right. so you should file revise return if the original return was filed in time provided u/s 139 (1).

but now again what if original return was not filed belated.?????

Dipjyoti Majumdar (CA in service & CS. dipmaj@ rediffmail.com ) (3468 Points)
Replied 25 March 2014

Manoj and Sudeshji,

What would be the Dept.'s view if it notices that due to inclusion of interest income the tax payer falls into 20% tax bracket. I do not wish to discuss about the option of filing revised return. Consider, as if the original one was a belated return.

Regards,

MAYUR ZANJRUKIYA (Student CA Final ) (21 Points)
Replied 25 March 2014

As income is accrued on FD it is your income forthe year hence you have to show the income in return. And even today income tax deparment do not trace income as per return and 26AS, they simply match TDs and TAN

VIVEK MALAVE (Chartered Accountant) (378 Points)
Replied 25 March 2014

Sir but wat will do when we apply cash system of accounting.... and not accrual ??? Wat we do????

Manoj Mehta (Head Of Department (Accounts & Finance)) (1479 Points)
Replied 25 March 2014

Dear dipjyoti , then you will get a demand and also SCN, of escape income. 143(1) Is not the section to deal with in this case. Regards

Jaynam shah (article) (32 Points)
Replied 26 March 2014

My dear TDS deducted on received basis... as your FD is not matured while filling return, you need not to show in your return, and also it would not shown in 26as also because as FD is not matured how tds would be deducted on it...

vinay mehta (student) (80 Points)
Replied 29 March 2014

Mr. JAYNAM, I dont agree with your opinion. TDS will be deducted by the bank because bank has to deduct that on basis of credit or reciept whichever is earlier and therefore it will be reflected in 26AS also. Further nothing would happen in 143(1), but in case AO finds a SCN would be issued or 143(3) proceedings depending.