Do you have any personal income tax query?
Mihir Tanna, Associate Director, S K Patodia & Associates (external link), a chartered accountants firm that offers consultancy, audit and tax services, will answer your queries.
Please mail your queries at firstname.lastname@example.org with the subject line 'Ask Mihir' and Mihir Tanna will answer all your tax queries.
Amit Patel: My company's (pvt ltd) taxation dept. told me no tax cutting this year (my package is. 7.2 lakh per annum). But now HR added last year's arrears (Rs 31,000) in this month's (Sept month's) salary calculation and tax deducted Rs 2445 without giving information to me. So what can be done? Filing ITR personally?
Mihir Tanna: As per Section 89 of Income Tax Act, tax relief is provided by recalculating tax for the year in which arrears are received and the year to which the arrears pertain; and the taxes are adjusted in the year in which they were due.
We understand that Rs 31,000 is pertaining to FY 2021-22 for which return is filed and received in FY 2022-23 when it was due.
Usually, employers calculate relief u/s 89 and on balance amount TDS is deducted. Moreover, above said amount of salary is taxable in FY 2022-23 as we understand that it was not due in FY 2021-22 and accordingly it will be shown in ITR of FY 2022-23.
Krishan Gopal Dua: I have filed my ITR-1 for AY 21-22 in time. Demand was raised on 14 Jan for Rs 1,690 on processing of my ITR.
a) I have paid the amount on 27 May, 2022 through net banking against challan no 10574. BSR code 0510308. I have erroneously paid Rs 1,690 in serial 300 (self-assessment) instead of SL 400. The amount remains to be shown outstanding in mine account and acceptance of return remains pending. I have tried to correct the SL 400 through my PAN account but I have not been successful in changing serial. In rectification icon this amount of Rs 1690 is not shown because only payments prior to submission of ITR are only shown. However, this Rs 1,690 is shown in it is shown in 26As. So I have not been able to change to SL 400 instead of SL 300.
b) I requested for reprocess of ITR so that this amount may get reflected and ITR will be accepted. After reprocessing request amount has been reduced to Rs 1,230. But ITR has not been accepted. It is showing with additional interest of Rs 108 as on today.
c) Additionally Rs.1690 + Rs 112 has been deducted from refund of next year return on 14 September 22. This is also reflected in 26AS
d) Therefore I have paid Rs1690 through net banking challan plus Rs 1,690 through deduction from refund plus Rs 112 as interest. Total payment made 1,690+1,690+112 = Rs 3,492. Whereas I am required to pay only Rs 1,230.
e) ITR still outstanding and not accepted till date and amount of Rs 1,230 is reflected unpaid.
Sir my query is:
a) Am I required to pay amount Rs 1,230 + interest? After the re- processing, despite having paid Rs 1,690 against initial demand by net banking plus there has been deduction from refunds. i.e. twice if I ask for re-processing?
b) Now that amount has been paid. What action I need to take to complete the processing of ITR.
Mihir Tanna: If tax demand is paid after 30 days, income tax charge interest @1%. I understand that Rs 112 is interest charged for late payment of tax demand and all other demands are not valid. Such demand can be deleted by filing application u/s 154 of the income tax act.
Check e-filing portal “outstanding demand” tab. If rectification rights are with CPC, you can request CPC Customer Care to transfer ITR to assessing officer.
Once the case is transferred, you can explain the issue to jurisdictional officer, request officer to pass rectification order as mistake is appearing from records and issue refund for wrongly adjustment of next year refund.
Gulshan Singh: I received money from my PF Account after retirement and paid money for purchase of a flat in my son’s name. Later on the flat sold after 3 years with a profit of Rs 5,000 but commission paid to dealer was Rs 20,000. The earlier amount paid for purchase by me to seller was online from my bank account but in latter case, the amount was transferred to my son’s account who then paid the purchaser (in 2nd case of sale of house). Later on, after sale of flat, this sale amount was transferred by my son to my account.
Should I show the profit of Rs 5,000 in my income tax return?
Further, it is also informed that this house was purchased and later sold on Power of Attorney as registry for this property/colony is not open by the govt. Please guide me in the matter whether my son should show this transaction in his return or I should do it as money was initially paid by me and later on taken back by me only?
Please help in the matter and oblige.
Mihir Tanna: Once property is gifted to relative and all the legal formalities are completed, relative becomes actual owner i.e. in your case your son. Hence, the profit arising on the transaction is to be shown in your son’s return.
The money received on transfer of flat and sent to you is gift received from son and gift received from relatives is not an income.
You can read more of Mihir Tanna's responses here.
Note: The questions and answers in this advisory are published to help the individual asking the question as well the large number of readers who read the same.
While we value our readers' requests for privacy and avoid using their actual names along with the question whenever a request is made, we regret that no question will be answered personally on e-mail.