Case AQ - Should i not be paying self assessment and waiting for demand intimation ? Posted by - Prashant Devarde On - Youtube hello amlan , thanks for the nice informative video . i have one doubt regarding this . here you have paid intimation tax /demand tax when you got the intimation from the income tax dept. (for penalty for delay in tax filling) . in many cases salaried employee file ITR correctly as per form 16 and also mentioned the interest income form FD/RD which is less than 10 K (TDS not deducted at bank as it is less than 10k) . now tax on salary income already deducted by their company and now employee only need pay tax on interest income . then i would like know your view on below points . 1) employee already know how much is the extra income (from RD & FD ) & what will be the applicable tax on it through tax calculation sheet (which is not paid ). is it ok/possible to pay this applicable tax in advance few days before the filling the ITR & then add this challan NO in TDS while filling the ITR ? OR 2) just file the ITR with extra interest income and wait for intimation from the tax department for demand tax (with accurate demand figure )on this extra income . then pay this demand tax just like you showed in your tutorial please share your view on this Case Solution - By Amlan Dutta +Prashant Devarde ...you are getting it all wrong ..but let me explain the solution with a case study ...consider that i am resident non senior( less than 60 yrs ) individual for the previous year 2013 14 (assessment year 2014 15 ) ...Say in this year , salary and FD interest income alone contribute to my gross total income ...say i have salary income of 11 lacs and FD interest income of 3 lacs ....now my gross total income will be therefore 14 lacs ...say i have invested in provident fund under section 80 C (listed under chapter VIA )for 1 lac Rs Therefore my total income transcends to 13 lacs (Gross total income - aggregate of all deductions under Chapter VIA ) Now, since i am filing return in capacity of a resident individual , tax is applicable as per slabs i.e 0 for 0-2 lacs, 10 % for 2-5 lacs i.e 30000 Rs , 20 % for 5- 10 lacs i.e 1 lac and 30 % for more than 10 lacs i.e 30 % on 3 lacs i.e 90000 Rs ....so total tax that is applicable to me shall be 30000 + 100000 + 90000 = 220000 Rupees + Education cess(3 % )=220000+6600=226000 Now , see what happens ...the company deducts tax as per income slabs on salary total income of 10 lacs i.e 133000 Rs under section 192 The bank deducts TDS on FD interest income as per section 194 A at the rate of 10 % i.e 30000 , Now the total TDS deducted therefore sums up to 163000...i.e from my account i have credit available of 163000 to meet my tax liability whereas i needed credit of 226000 . So , i use the income tax challan to pay this balance i.e 226000 - 163000 = 60600 If i pay in advance , it is called advance tax , if i pay after year ends , it is called self assessment ..if i pay after year ends , then i pay this tax plus penal interest computed under section 234 B/C (return will compute and tell you how much is due in the tax payable field ) As a taxpayer i need to ensure that i pay this 60600 Rs advance tax /60600+ x amount self assessment tax using challan 280 and take credit in return using Schedule IT ( because i am paying tax , so i use schedule income tax and not TDS because tax is not being deducted at source )..... I need to ensure that whatever the tax liability i.e 226000 in my case is met using the tax credit be it in form of TDS credit available to me on account of salary TDS and ban interest TDS or income tax credit available to me in terms of self assessment/advance tax that i pay ! Only after i show this in return , should i upload the the return ... Understand what has happened in the process ...i have declared my income and paid taxes due on it and submitted the return for assessment ! Once in assessment , assessing officer finds that i have hidden some income or finds that i dont have sufficient tax credit which i availed , he may raise further demand, This demand may be raised either through preliminary intimation under section 143(1) or demand under section 156 ! Whatever be the form for raising the demand , if taxpayer agrees to pay , the challan remains the same i.e challan 280 ...here however since it is the assessment of the AO which led to the demand being raised , so you use the head 400 (tax on regular assessment ) to pay the demand ! You are not required to rectify /revise return for taking tax credit as in case of self assessment / advance tax because closer study of the tax return will show that the tax credit tab has no field for taking tax credit for demand tax paid ..it is merely for advance /self assessment paid tax ! I had paid self assessment tax and made my tax liability nil before uploading my return ..however during preliminary assessment the AO raised a demand of 270 Rs which i used challan 280 to pay off ! Answering your question , taxpayer must ensure that he pays the self assessment tax before he uploads the return like the case described and not wait for the intimation or other demand because that would imply financial burden considering the huge penal interest liability that would get build such taxpayer even think of such a option ! I will see if i can have a video for this subject Bye , Amlan Dutta
Posted on: Sat, 03 Jan 2015 06:17:31 +0000
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