VIVEK SINHA (Exec Ed) (62 Points)
17 January 2015If I earned money through salary in a given year (say 4.5 lakh) and also had a side income of around 2 lakh as a consultant (of which the firm paying cut 10% TDS) for freelancing ...which ITR I need to file and in which section do this other income to be shows and at what rate would it be taxed?
Z
(Tax Consultation (US and India))
(2970 Points)
Replied 17 January 2015
It should be ITR 4 since you have income from profession.
VIVEK SINHA
(Exec Ed)
(62 Points)
Replied 17 January 2015
Thanks.
One follow-on query. I think made a mistake and added it as addiitonal biz income while filing returns for FY2010-11 (AY 2011-12). And even though don't recall receiving any demand letter... now that my last-to-last year's ITR 2 (FY 12-13 or AY 13-14) was rejected as (the physcial printout) it reached them late, its showing as a pending demand.
Do I need to refile the ITR2 for FY 2012-13 (AY 2013-14) and a/c for this demand (Rs 16,190) while netting the refund request for Rs 11,120 for FY12-13?.. Also it doable online?
Thing is the whole case pertains to my wife who is no longer earning so didn't file ITR for this year.
Z
(Tax Consultation (US and India))
(2970 Points)
Replied 17 January 2015
I didn't quite get you. Explain again and give more details
VIVEK SINHA
(Exec Ed)
(62 Points)
Replied 17 January 2015
So it happens to be the case for the tax returns filed for my wife.
Starting with the genesis.. So we filed her FY 12-13 ITR 2 (primarily salary income besides non taxable dividends and saving bank interest) which called for refund of some 11,000 bucks. Filed online and mailed the physical copy. But they received it late and rejected it. I didn't notice it and now she's not working so didn't file ITR for last fiscal.
Now we get an email u/s 245 sayign need to adjust refuund call with previous demand////and when I check back her online efiling....a/c shows pending demand for fy10-11 (ay 2011-12) of 16190 bucks. it was in this year that she had a side income as a consultant for which she was paid around 2 lakh and there was a tds element of 20,000 deposited by a different organisation in addition to the tds on salary by her employer. we had (apparently incorrectly) showed as a biz income and added to shows as total income and then submitted ITR that year.
1. I assume they want me to refile the ITR2 for FY 2012-13 (AY 2013-14) and a/c for this demand (Rs 16,190) while netting the refund request for Rs 11,120 for FY12-13?.. Also is it doable online? Does the refund request still hold in suuch cases especially when there is a old pendign demand and the ITR didnt reach them in time?
2. If i contest the demand, which I believe is a long-drawn process, then I need to refile a correct ITR for that year fy10-11? any clue what sort of penalty do that impose in such cases?
3. in case of (1) above when they say pendg demand 16000 odd.. does that include penalty amount for late payment or that is separate as and when i file to pay it?
Z
(Tax Consultation (US and India))
(2970 Points)
Replied 17 January 2015
Since the ITR V pertaining to F.Y 12-13 was not sent, it would not be treated as a valid return. Still such a return is kept for records and are prima facie evidence of the income, I suppose thats the case here
If the demand is correct then its good that system adjusted it
Check why they have raised the demand of this amount, you can request for intimation[S.143(1)/rectification S.154] for the F.Y 10-11]
Return can be rectified within 4 year period , so if there is any mistake in that return then you can rectify it
Rectification can be done,online, by you u/s 154
If the demand is correct then let them adjust it and pay the differential , since the return is not valid in the 1st place.
If AO levies any penalty then they have to write something like penalty proceedings have been initiated or penalty notice are being issued , you would be receiving the SCN as to why penalty should not be levied on you, penalty order
[Lets not get into that until we know whether the demand is correct]
Since Tax was also deducted at source @ 10% of consultation Income I am presuming it to be of professional fee [S.194J] , And probably your wifes income was chargeable at higher slab rate so they are asking the differential
Explanation to S.194J
"professional services" means services rendered by a person in the course of carrying on legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy
VIVEK SINHA
(Exec Ed)
(62 Points)
Replied 18 January 2015
So you suggest I should ...
1. First of all file a request for resending the intimation? I see this option online (email suits me fine and there is one such option which is great) This should be u/ 143(1) or rectificaiton 154? I guess the former.
2. Post which if the demand looks valid as probably I filled the ITR 4 incorrectly 3 yrs ago (on the face of it.. she had salary income of Rs 4.58 lac, sec 80ccc deduction of Rs 1 lac for which around Rs 39,000 was salary tds and this professional fee of Rs 2.4 lac for which separate tds of Rs 20,000 was deposited). I need to file for rectification request for that AY (2011-12 in this case) and then refile itr4 for that year and pay the amount?
3. Or do I anyway refile last year's correct ITR (which was received late at their end so was not considered valid) paying the net amount after factoring in the demand call and the refund call? IN either case I am guessing I need to refile ITR for both the years.
Z
(Tax Consultation (US and India))
(2970 Points)
Replied 18 January 2015
1.)This you will have to check in the notice received by you u/s 245, it will be explicitly mentioned that whether the demand has been raised u/s 1431a or 154.
2.)Once you receive the above information you need to check whether the demand is correct, if it is correct (partly or fully) take necessary steps [(Dis)/Agreeing to the demand(fully/partly) in the pending options from your account @ incometax site]
If you find that there is any mistake (apparent from record) in your ITR then you can rectify it u/s 154
[Sir you also check which ITR form was used , in previous post you mentioned ITR-4 , earlier you mentioned ITR 2]
3.) Its better if you do not touch that return[F.Y.12-13] since it is not a valid return and still your refund is being adjusted. There is a different procedure for claiming refund in this wherein you will have to make application u/s 119(2)(b) for condonation of delay and you should have a solid reason for that. [Rare chance of getting refund]
You may obtain a second opinion on this ITR of F.Y12-13
VIVEK SINHA
(Exec Ed)
(62 Points)
Replied 31 January 2015
Hi, some additional queries underlined... with what's transpired since our last interaction.. and thanks in advance for taking time out to answer my previous posts.
# (1) So I did get the reply from them after I filed for notice uder 143(1). It looks like they have sent back the same ITR4 that I had filed back then with an additional column with their calculations. But there is no demand in there. Infact it says refund which was almost as per our claim, minor diference. Maybe we got too.
So is it possible that the demand is given the variance between TDS claimed and what was deposited. I would certainly check this. If it is so. I see there are two moves.. (a) The amount was not deposited by the previous employer (either on time or ever) despite saying so in form 16. Any easy recourse to this? (b) it was deposited but then deptt has not taken that into account properly... I would thhink this is a far fetched thought for the optimist me.
I guess if it was the former I need to to file for rectification..the payment is to be made before, during or after filing for rectification?
What if it's the second case?
# (2) Yes, I rechecked, I did file ITR 4 only not 2.. so as such the form was correct :) So the subject line of this post is now void and redundant I guess.
# (3) So you said I should not touch this ITR filed for 2012-13 (AY FY14)..Anyway, since it was filed. but not accepted and so not valid.. just so that we are clear of any potential problems in future.. after I do what I have to do in # (1).. how can I get this registered in records.. whether or not I get a refund (would be nice if I get it).. so I need to refile it as you said 119 (2) (b)... this is also doable online?
Z
(Tax Consultation (US and India))
(2970 Points)
Replied 04 February 2015
"So is it possible that the demand is given the variance between TDS claimed and what was deposited."
If that'd be the case there would be difference in "Total tax credit" under pre paid taxes, check for same
Further you can view whether you have received the credit or not from form 26 AS [can view from income tax site or traces site]
There is a provision [S.205]
Where tax is deductible at the source under [the foregoing provisions of this Chapter] the assessee shall not be called upon to pay the tax himself to the extent to which tax has been deducted from that income.
That if there is tax credit mismatch you may write to AO , giving proof of tax deduction[Form 16] and quoting this provison
"how can I get this registered in records.. whether or not I get a refund (would be nice if I get it).. so I need to refile it as you said 119 (2) (b)... this is also doable online? "
You wont get any benefit even if you file application u/s 119(2)(b). Do you have a VALID reason to not to file the retun or ITRV ? Don't get your hopes high
I suppose it would be nice if you are getting refund otherwise you are not entitled to it in 1st place and secondly you can be liable to interest u/s 234A. Penalty u/s 271F can also be levied [Rs. 5000]
But then again, you may take a second opinion in this regards
VIVEK SINHA
(Exec Ed)
(62 Points)
Replied 04 February 2015
For AY 10-11 yes. filed manually (that year was only salary income I think). On the notice it says AY 10-11 but when I ask for intimation for that year they say no intimation. When I had put in the request for AY 11-12 the sent me the ITR 4 with extra column with their calculations but as I said earlier no demand.
The pending demand section on the site it says AY 2010-11 section code-1431a, uploaded by jurisdictional AO and rectification status CPC.
So...
1. How can I get the details of the demand? Should I mark that I do not agree to it? in the submit response option? I want to avoid the hassle to going to IT office.
2. Assuming the demand is correct and I need to file for rectification..the payment is to be made before, during or after filing for rectification?
3. I know you said it. But I am not sure what is to be done with ITR2 of FY12-13 (AY 13-14)..if it was not accepted and so not valid then how are they processing that and adjusting with the previous demand? You mean to suggest I just let this 'ITR2' as it is. But then how would they adjust it? would they refund it after I clear my previous dues? Coz my understandingg of adjusting would me paying net amount..
Z
(Tax Consultation (US and India))
(2970 Points)
Replied 04 February 2015
VIVEK SINHA
(Exec Ed)
(62 Points)
Replied 04 February 2015
# Thanks. I get the first part. The reason for the demand I can check only after contacting the AO.
# The reason I had mentioned rectification was that i thought I need to rectify the ITR that I filed and pay the money. Maybe I didn't include some payment which calls for the demand. So you are sayign that is done with. So if the demand is correct then I just have to pay not to refile old returns again.
# Ya I get that FY12-13 returns are not valid and I can't file a valid return. What i was asking was referred to using the same data to file a late ITR (read somewhere can do so within 2 yrs)... Also as I mentioned since its not valid anyway how is the deptt adjusting it?..And if they are does it mean the process calls for me to first pay whatever is due and then I get a refund (even though my returns and as such a refund call is not valid). Or what I need to pay is after adjusting for the refund call. ie 16000 (demand), 12000(our refund call).. hence I need to pay 4000. Which one of these is true. I pay 16000 and wait for refund if at all or i pay 4000.
Z
(Tax Consultation (US and India))
(2970 Points)
Replied 05 February 2015
"(read somewhere can do so within 2 yrs)"
S.139(4) Any person who has not furnished a return within the time allowed to him under sub-section (1), or within the time allowed under a notice issued under sub-section (1) of section 142, may furnish the return for any previous year at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier :
For F.Y 12-13 (A.Y 13-14 ) Return could have been filed till end of relevant assessment year
i.e upto 31.03.14
Sir first you check why the demand was raised in the first place, talk to your jurisdictional AO , payment comes later
Maybe it allowed because of some system error... I do not know for sure but it shouldn't have happened
It should be net [4000]
Since you will have to contact AO, you may discuss this with your AO, but I believe once he'll know that return was not valid he might not adjust the demand
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