FAQs on Tax Payment, TDS and Refund

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  • Last Updated on 2 August, 2022

Q1. What are the maximum exemption limit and slab rates applicable for Assessment Year 2018-19? 

The maximum exemption limit and the slab rates for Assessment Year 2018-19 are given in the following table:

Class of persons

Income Slab (Amount)

Tax rate

Resident senior citizen (age 60 years or more but less than 80 years)

Up to Rs. 3,00,000

Nil

Rs. 3,00,000 to Rs. 5,00,000

5%

Rs. 5,00,000 to Rs. 10,00,000

20%

Above Rs. 10,00,000

30%

Resident super senior citizen (age 80 years or more)

Up to Rs. 5,00,000

Nil

Rs. 5,00,000 to Rs. 10,00,000

20%

Above Rs. 10,00,000

30%

Any other individual or HUF (i.e., other than above)

Up to Rs. 2,50,000

Nil

Rs. 2,50,000 to Rs. 5,00,000

5%

Rs. 5,00,000 to Rs. 10,00,000

20%

Above Rs. 10,00,000

30%

 

Q2. When do I need to pay education cess and surcharge?

Surcharge is levied at the rate of 10% on the amount of income-tax if net income exceeds Rs. 50 lakhs but doesn’t exceed Rs. 1 crore and at the rate of 15% on the amount of income tax if net income exceeds Rs. 1 crore. Education cess is an additional levy which is calculated on the aggregate of total tax liability and surcharge levied there on. Cess is levied in two parts, Education Cess at the rate of 2% and Secondary & Higher Education Cess at the rate of 1%. If surcharge is not applicable then the cess shall be calculated on total tax liability.

Q3. Can I claim benefit of tax deducted in advance on income which is taxable in subsequent years?

Certain provisions of TDS (including TCS) require deduction of tax at source at the time of payment or at the time of credit, whichever occurs earlier. Advance payments are also subjected to TDS. Old ITR form did not have any mechanism to carry forward the excess TDS, thus, taxpayers were required to show the entire TDS as a deduction and claim refund of excess TDS. To overcome the issues, the Schedule of TDS/TCS in the ITR forms now provides columns to fill in the information of tax deducted in previous years but credit for the same is claimed in current year. You cannot claim credit of TDS pertaining to income which is taxable in subsequent year. Thus, such TDS credit can be carried forward to subsequent year and can be claimed in the year in which income is offered to tax.

Q4. I have filed my return of income electronically but in refund/demand status it is mentioned as “refund not determined”. What does this status indicate? 

This status depicts that your return is not processed. You will get status of tax-refund after your return is processed by the income-tax department.

Q5. I have claimed tax refund by filing income-tax return but my refund claim failed as I have mentioned incorrect account number. How can I submit correct account number to claim tax refund? 

You can submit your correct bank account number after selecting option of refund reissue. Procedure to apply for refund reissue is outlined hereunder:

1. Login to https://incometaxindiaefiling.gov.in
2. Go to ‘My Account’ and select ‘Service Request’.
3. Select Request Type as ‘New Request’ and then choose ‘Refund Reissue’ under request category. 
4. Update bank account details.
5. Click on submit.

Q6. I received advance salary (for the month of April, 2018) in the month of March 2018. Whether the same will be taxable in A.Y 2018-19? 

Salary is taxable on due or receipt basis, whichever is earlier. So it will be taxable in the assessment year 2018-19. Once salary is included in income of assessment year 2018-19 on receipt basis it will not be included again on due basis in assessment year 2019-20.

Q7. My employer did not deduct tax from my salary income. Whether in such case I am liable to pay tax on my salary income?

TDS is only a mode of early collection of tax. The ultimate liability of paying taxes is on the person earning income and, hence, if the employer fails to deduct tax, then it is the liability of the employee to pay the tax on the same. Further, if the employer has deducted less tax, then it is the liability of the employee to pay the balance tax.

Q8. How to know TAN of my deductor? 

It can be found either on Form 16/16A or in 26AS tax credit statement available on https://www.tdscpc.gov.in/app/login.xhtml TRACES (TDS Reconciliation and Correction Enabling System) website.

Q9. How best to proceed in case of TDS mismatch? 

Even if the credit for TDS as claimed in the return matches with the balance appearing in the Form 26AS, Assessing Officer may raise a demand for payment of differential amount due to TDS mismatch. The reasons for such difference could be as under:

1. TAN of deductor was wrongly mentioned
2. Name of deductor was not spelt out correctly
3. Tax deducted by one deductor was wrongly included in the amount of tax deducted by another deductor
4. In case of such TDS mismatch, an assessee can file a rectification request in the following manner:

a) Login to your account in https://incometaxindiaefiling.gov.in
b) Go to e-File > Rectification request
c) You need to fill up the following details:

    • PAN
    • Return to be rectified
    • Assessment Year
    • Latest Communication Reference Number issued under section 143(1)/154 (it starts with CPC/Assessment Year/)
d) Click on Validate to go to next step
 
e) On the next screen, choose ‘Taxpayer is correcting data for Tax Credit Mismatch Only’ from the drop-down box of ‘Rectification Request ‘Type’
 
f) Check from the following relevant boxes for which item rectification is sought for:
 
g) Fill in all the relevant details, including details of tax deducted and reported in the return of income filed earlier h) Click on the button ‘Submit’ to submit the rectification request. The TDS mismatch may also be due to error in TDS return filed by deductor. In such a situation you should intimate the deductor about such error and tell him to rectify the TDS return.
In Press Note No. 402/92/2006, dated April 17, 2014 CBDT had noted that many taxpayers commit mistakes while furnishing details of tax credit in the return of income. Such mistakes include:
 
  • Invalid/incorrect TAN of deductor;
  • Furnishing same TAN for more than one deductor;
  • Filing information in wrong TDS Schedules in the Return Form;
  • Furnishing wrong challan particulars in respect of Advance tax, Self-assessment tax, etc.
 
Consequently, the tax credit could not be allowed to the taxpayers while processing returns despite the tax credit being available in Form 26AS statement. The CBDT, therefore, has directed the taxpayers to verify if the demand raised on them is due to tax credit mismatch on account of such incorrect particulars and submit rectification requests with correct particulars of TDS/tax claims for correction of these demands. The rectification requests have to be submitted to the jurisdictional Assessing Officer in case the return was processed by such officer, or the taxpayer is informed by CPC, Bangalore that such rectification is to be carried out by Jurisdictional Assessing Officer. In all other cases of processing by CPC, Bangalore, an online rectification request can be made (as defined above).

Q10. I am a salaried person. My taxable salary is Rs. 5,40,000 on which tax has duly been deducted under section 192. During finalization of return, I found that my bank has given me a credit of Rs. 1,24,500 towards interest. Please guide me how best to proceed in such case? 

In this situation you have to pay the balance taxes on the interest income (or any other income) before filing of return. Balance taxes should be paid along with interest under sections 234B and 234C. The tax and interest can be paid in any authorized bank through Challan No. ITNS 280. Alternatively, it can be paid through online bank portal through following link.

Q11. I have Fixed Deposit (‘FD’) of Rs. 1,50,000 in bank and my total income (including interest income that would accrue on FD) is below the taxable limit. How to avoid deduction of tax on interest income? 

You can file a self-declaration to the bank in Form 15H if you are a senior citizen. Otherwise, you can file self-declaration in Form 15G.

Q12. How to avoid deduction of tax, if my interest income on saving deposits exceeds Rs. 10,000 and my total income including such interest income would be below the taxable limit?

Only interest income on time deposits which exceeds Rs. 10,000 would attract tax deduction at source. Thus, interest accrued on saving deposits would not attract TDS.

Q13. My Return has been processed and it shows ‘Outstanding Tax Demand’. What should I do now? 

Now a facility has been made available to taxpayers on the E-filing website (i.e., www.incometaxindiaefiling.gov.in) to provide online responses to such demands. The actions required to be performed by the taxpayer are prescribed as under:

1. Login to https://incometaxindiaefiling.gov.in then go to e-file menu and click on ‘Response to Outstanding Tax Demand”.
2. Select one option out of the following:

a) Demand is correct
b) Demand is partially correct
c) Disagree with demand

3. If option of “Demand is correct” is selected then a pop up is displayed as “If you confirm “Demand is correct” then you cannot ‘Disagree with the demand’. If any refund is due to assessee then outstanding demand along with interest will be adjusted against refund. If no refund is due to assessee then taxpayer has to immediately pay the demand.
4. If an option of “Demand is partially correct” is selected then taxpayer is required to enter the “Amount which is correct” and “Amount which is incorrect”. After selecting amount which is incorrect taxpayer should mandatorily fill up reasons from the specified list.
5. If an option of “Disagree with demand” is selected then taxpayer is required to furnish the details of disagreement with demand along with the reasons from the specified list. 6. After the taxpayer submits the response the success screen would be displayed along with the Transaction ID.

Q14. Whether I need to pay fee under Section 234F if there is a delay in filing my income-tax return for AY 2018-19?

Up to Assessment Year 2017-18, if assessee failed to file the return of income before the end of the assessment year, penalty under Section 271F could be imposed by the Assessing Officer. This penalty provision was omitted by the Finance Act, 2017. In lieu of such penalty, the Finance Act, 2017 levied a new fees if assessee does not furnish the return of income on the due dates prescribed under Section 139(1). The amount of such late filing fees shall be:

1. Rs. 5,000 if return is furnished after the due date but before December 31 of the Assessment Year [Rs. 1,000 if total income is up to Rs. 5 lakhs].
2. Rs. 10,000, in any other case.

After introducing this new provision, the assessees shall be required to pay the late filing fees under section 234F along with interest under section 234A, 234B and 234C before filing of return of income. The Income-tax Dept. shall not be required to initiate the penalty proceedings separately to levy such fees on late filers. The details of fees levied under Section 234F shall be reported in Part B TTI.

Q15. I have received cash gift of Rs. 1,00,000 from my childhood friend. Am I required to disclose the gift in my return of income?

As per section 56(2)(x), gifts received from relatives are fully exempt from tax. However, gifts received from non-relatives are taxable if they exceed Rs. 50,000. The term ‘relative’ is defined in section 56(2)(x) and it doesn’t include a friend. Therefore, cash gift of Rs. 1,00,000 is taxable in your hand and you will be required to report taxable gifts under ‘Schedule OS’ of ITR Forms.

Q16. I have received overtime payment for extra work from my employer. Is it taxable? 

Salary also includes overtime payment received from the employer. Hence, it will be taxable under the head income from salary.

Q17. I am getting monthly pension from government. Is my pension taxable? 

Monthly pension received from any employer, either Government or non-government would be taxable in hands of employee under the head Salaries.

Q18. I am having rental income from sub-letting of my property. Whether it is taxable as income from house property? 

It will be taxable under the head “Income from other sources” and not under the head income from house property.

Q19. I am getting parking charges from my plot of land. Whether this income is taxable under the head income from house property? 

Parking Charges will form part of your taxable income and same shall be taxable under the head “Income from other sources”, because rental income from land is not taxable under the head income from house property.

Also Read:
FAQs on Income Tax Return Verification
FAQs on Filing the Return of Income

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