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.
Sunil: My current organisation has deducted my TDS for the FY 2021-22 and still not deposited. Kindly advice repercussions could be and how to take it forward with my company.
Mihir Tanna: I hope you have filed your ITR and claimed said TDS in ITR. If TDS is not deposited by employer, it will not appear in 26AS and you will not be able to get credit of the same. Thus, it is advisable to keep written communication with employer, requesting to deposit TDS and provide Form 16 downloaded from traces (income tax website) at the earliest.
If said TDS is not deposited within reasonable time, you have to contact CPC department of Income Tax.
Through telephonic talk you have to explain the issue and request them to transfer your ITR to jurisdictional assessing officer (AO) so you can get TDS credit.
Once ITR is transferred to AO, you can explain to issue to AO, file copy of your communication with employer along with documents related salary and TDS deducted.
You can request AO to grant credit and communicate with your employer for depositing the TDS amount.
Balaji Natarajan: I have a very basic question about direct taxes. Interest earned on FD is generally much lesser than inflation %. In that case, why is the interest earned on an FD, taxed?
If I earn 5% interest on Rs 1 crore FD, it would be ~5 lakh per year, which should be tax free. What is your opinion?
Mihir Tanna: In my view, Government usually frames income tax regulations in such a way that taxpayers are encouraged to keep investing part of their savings in long term secured mode of investments and which in turn can help taxpayer meet long term needs. Therefore, it provides exemption and deduction from income tax if you invest in specified modes for long term. For instance: Interest income earned from PPF, specified bonds, etc., have lock-in period and interest income is not taxable.
Similarly, if you invest interest income on FDs, in tax saver mutual funds (which have lock-in period of 3 years), you will get deduction u/s 80C up to specified limits.
Satyanarayana: I am a HR service provider. In one of my services, I used to pay EPF to various small contractors of a big corporate company. But salaries used to be paid by the respective contractors. For paying EPF on behalf of the small unorganised contractors the Company used to reimburse EPF actuals and separately they used pay service charges to me. I am showing this income in the IT returns.
Whereas IT department is adding this EPF amounts to income since salary disbursement is less comparing with EPF remittance.
Kindly suggest a way out or shall I stop this kind of services in the coming months?
Mihir Tanna: If an employer or authorised signatory has multiple establishments, he should obtain registrations for all the establishments with EPFO.
Employers are required to make remittances only after generating challans from the employer portal of the EPFO.
I understand that you have not followed specified procedure of EPFO. Please check EPFO portal or office for more details.
Clarissa D’souza: Thank you for offering advice to us who have no way to get our problems solved. I filed my returns according to AIS. My Returns were pre-filled. In it Interest from Post Office NSC was included in lump sum of 5+ years.
I approached the PO for an annual interest certificate but they refused saying you should do your own calculations and the PO does not issue Interest certificates.
In the absence of this, I filed my returns with an amount much higher than received or accrued. I had to pay a high tax. Should not POs issue certificates if the Interest is shown in AIS?
Mihir Tanna: I understand your concern but in my view rather than discussing on POs’ responsibility. I will advise you to check interest amount from calculator provided by income tax at website here (external link).
If the amount of taxable interest is lower than amount appearing in AIS, you may write to concerned authorities of NSC and after confirming amount of interest, if it is observed that interest amount shown in AIS is higher, you can provide feedback at income tax portal at given place.
Pratima Bajpai: I am filing my ITR 3 under Section 44ADA. What is the relevant professional income code for Royalty Income from Books?
Mihir Tanna: Royalty has embedded in it the concept of rentals received as consideration for use of or the right to use any patent, trademark, design or model, plan, secret formula or process.
So in my view if it is chargeable as Income from Business & Profession and in the absence of any specific clarification/code, it can be considered under code "Retail sale of other products n.e.c – 09028.
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