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Well, the scenario I am going to elucidate is not something new or unheard off, however, there are few cautions which are often ignored thereby resulting into complications being faced by Salaried Assessees.
Quite some number of times it so happens with people working in Corporates that a Professional would visit them, take their respective Tax Deducted at Source (TDS) certificate Form 16, file their Income Tax Return for a mere amount and then when a scrutiny or a demand notice comes then this very Professional is mostly not traceable with respect to the same.
To clarify, I would say that there is an issue at both the ends because as far as Assessee is concerned he/she wants to get his/her Income Tax Returns filed with minimum effort and expense and are not mostly concerned about the accuracy of the same, however, as far as Professionals are concerned they too, in order to get clients, facilitate them in away which might someday go against the clients.
Thus, Assessees and Professionals need to take care of certain simple things in order to make filing of Income Tax Return and post Return filing scenario a smooth walk.
Assessees:
- Should understand that its not only Form 16 (Certificate of TDS on Salary) which is required to prepare and file an Income Tax Return because it may be that Assessee has invested in Fixed deposits or has various other sources of Income thus, Income from all sources is required to be shown in the Income Tax Return and Income Tax commensurate to the same should be paid before filing the Return.
- In order to get benefits for the respective deductions and exemptions provided under the Income Tax Act, 1961, the Assessee should maintain a proper record of all the investments/insurances bought during the year, all the payments with respect to rent, donation, School tuition fees for children etc. Example: Life insurance premium payment receipts, Mediclaim premium payment receipts, Donations receipts with respect to Donations extended to registered bodies, Provident fund contributions etc.
- Assessees should download Form 26AS from www.incometaxindiaefiling.gov.
in in order to ascertain the TDS deducted with respect to Salary, interest etc. as Form 26AS gives a snapshot of Assessees income during the year on which TDS has been deducted. Plus Form 26AS also gives you the information on Advance Tax paid by you, if any, during the year. It also, among other things, gives you the information with respect to the status of Refunds claimed in prior years by the Assessee in his/her Income Tax Return. - Assessee should co-operate with the Professional by providing complete Bank statements and other documents per the requirement, in order to enable the Professional to prepare and file correct Returns. Just like you provide complete information to the Doctor so that the Doctor can help you in a proper and informed way.
- Assessees must peruse the Return before filing in order to make sure that all their Incomes, investments, deductions etc. have been incorporated in the Income Tax return.
- Lastly, compensate the Professional reasonably in order to make sure that the Professional takes due care with respect to preparation and filing of your respective Income Tax return and is responsive in case if Assessee receives any correspondence from Income Tax department. Always remember that a happy Professional leads to a happier client.
Professionals:
- Must Educate clients with dos and donts regarding Income Tax returns.
- Should not try to lure Assessees by charging minimalistic fees and providing coarse quality service.
- Apprise Assessees of the repurcussions of non-compliance with the Return filing norms and improper disclosures.
- Should act responsibly in case if Assessee receives a correspondence from the Income Tax department which he/she is unable to comprehend or reply to.
- Must maintain a proper record of the Income Tax returns filed on behalf of Assessees including the documents provided by the Assessees for preparation and filing of Income Tax returns.
- Keep track of the Intimations under Section 143(1) of the Income Tax Act with respect to the Income Tax returns filed by him/her and notify the Assessee and take the corrective action in case of any issue.
Thus, the aforementioned cautions and actions are small steps which, if taken timely, can make life easier and spare ones self of unnecessary hassle of Income Tax scrutiny and departmental clarifications because a stitch in time saves nine. Always remember that preparation and filing of inaccurate Income Tax returns in an attempt to save some money and time might lead to non-compliance and consequently wastage of a lot of time and money.
Please file your Income Tax Returns accurately and timely !!!
(Author Details- CA Sahil Jolly – Jolly & Co. Chartered Accountants, Contact: +91-9999830077, Email : casahiljolly@gmail.com)
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Dear Tax Guru,
I have fixed deposits in 5 banks.Though i have furnished 15H forms to all these banks, only three banks’ “interest paid” reflect in the 26AS (one bank has done TDS, which reflects in 26AS).
My question is, what to do with the UNSHOWN interest(in26AS) paid to me while filing my returns. If i show that in my Returns, there will be Mismatch….If i disclose all the interest receieved by me, the ITD might call for clarifications on that Extra Tax paid by me.These Two Banks, say as they have Not done TDS, they are not Bound to send details for 26AS.
I am senior citizen 67yrs.started to file Online recently…and in a state of confusion; like to know the Right way to go about this Tax Returns. Kindly Guide me the Right Way, help me have Peace of mind..
Dear Mr. Gokhale,
You are absolutely right and that is why I have stressed on the respective responsibilities of both, the Assessee and the Professional, which go hand in hand in ensuring legal compliances and a stress free life.
Regards,
Sahil Jolly
Jolly & Co. Chartered Accountants
Email: casahiljolly@gmail.com
Dear Mr. Ramanan,
The Income Tax Law has the respective penalty in place if the deductor, whether Bank or any other person, is not issuing TDS certificates.
Thus, these days certificates have to be downloaded from TRACES portal and if the deductor does not download the certificate from TRACES portal by the due date of issuance of the same then there is a penalty of Rs.100/- per day for the delay.
However, in case if Bank is downloading certificates timely but is not issuing the same to the deductees then, as of now, the only recourse we have is to lodge a complaint with the Bank’s management.
Regards,
Sahil Jolly
Jolly & Co. Chartered Accountants
Email: casahiljolly@gmail.com
It was often observed that some assesees do online share trading in their name or transfer some amount from their account to their house wife’s account ( not having any other source of income) and do share trading transactions from her account or transfer some amount to their wife’s account and issue for 15 G/H to the banks and do not disclose these income in their ITRs. All these tricks may boomerang on them if selected under scrutiny or detected through AIR.
A professional needs to explain the repercussions of these to their clients. Now a days most of the transactions come under scanner of Income Tax department. If the client responds positively then they are saved of future losses in the form of interest and penalties. If the client still hides these facts from the professional, then in future, at least he can not shift the blame on tax professional.
Dear Sir,
This is A.S.VENAKATA RAMANAN TAX CONSULTANT IN CHENNAI.As now a days 26AS is CORRECT- NO MISTAKE – INCOME TAX DEPARTMENT, PROFESSIONAL LIKE C.A.S telling ,but i am against on that,why please read below:
A salary person depositing in FIXED DEPOSIT-Rs.100000 @10% 1 year, -bank deducting and filing or non filing of E TDS, but the interest amt reflected in 26 AS, the assesse not receiving the TDS CERTIFICATE,even several time asked with bankers(bankers MANDATORY DUTY to issue or sending data base address) they are not sending,in such case the salary people will suffer lot from department through 143(1)…. how to solve this.
A rule to be implement,if the bankers not issue or sending TDS certificate to the assessee-instead of penalising ASSESSEE bankers SHOULD BE PENALISED SEVERLY.
A.S.VENKATA RAMANAN,
R.S.CONSULTANT.TAX CONSULTANT
Hi, I am inspired to see the aforementioned comments 🙂
Anyways, getting back to the point, I see that quite some number of people have queries with respect to Form 26AS. Thus, following are some of the points in order to address the same:
1. First and foremost, everybody should take care that they obtain and maintain their respective
TDS certificates.
2. Form 26AS is a checklist of sorts which you need to compare with your respective TDS
certificates in order to make sure that TDS which has been deducted on your behalf is duly
appearing in Form 26AS and if its not then most likely the TDS returns which have been filed
by the respective deductors, who have deducted your TDS, contain some errors and thus,
require a revision.
3. In case if TDS deducted on your behalf is not fully reflected in Form 26AS then you need to
inform the deductor, under whose name your respective TDS is not reflecting properly in
Form 26AS, and ask the deductor to correct the errors and revise the TDS returns so that your
due TDS credit gets reflected in departmental records accurately.
4. Most of the times what happens is that the person deducting your TDS fills incorrect details in
TDS returns like incorrect PAN no., Challan details etc. due to which your TDS credit does not
appear in Form 26AS. Thus, any error in Form 26AS with respect to TDS can be rectified only
by the person who has deducted your TDS i.e. the deductor i.e. the person responsible for
making payment to you and, in order to carry out the rectifications, deductor needs to revise
TDS returns filed by him/her/it.
5. Lastly, despite Form 26AS, we need to file the Income Tax return because Form 26AS reflects
only the Income which is subject to deduction of TDS and not the Income other than that.
Example : Savings account interest, Capital gain on securities etc. which individually
might be small but together might result into a significant amount and incurrence of Tax
liability. However, there may also be a situation wherein TDS deducted on your behalf is more
than the amount of Tax required to be paid thus, its only after Assessing one’s income and
filing the Tax return that you may obtain a refund of excess Tax deducted.
Though our Taxation laws have become complicated over time but they have mainly been made so vide practical scenarios and the rationales behind Income Tax Act, 1961 mandating filing of Income Tax returns beyond a threshold is that how will Government come to know the correct status of your Income, how will you be granted a refund in case if excess Tax has been paid by you etc.
Thus, proper maintenance of records, timely compliance with Statutory requirements and partnering a Professional will always go a long way in ensuring your mental and financial well being because when we are living in a country then, though with logics, but we need to comply with the respective Statutory requirements.
Regards,
Sahil Jolly
Jolly & Chartered Accountants
Email : casahiljolly@gmail.com
How to recorrect the amount of tds shown in incometaxindiaefiling site if it shows wrong amount of refund?
when do you reply to the above doubt?
I don’t want to accept everything as it is. I want rationale.
To tax guru: Bangalore 07-02-2014
Kindly clarify the following doubt:-
When form 26AS gives complete details of tax credit, why should I file tax return?
When my tax return is the basis, why is form 26AS (tax credit) required?
What is to be done with it? Why to rely on it.
Since you are expert in tax matters, kindly clarify.
Dear Sahil,
I found wrong amount added by my previous employer in Form26AS mentioning TDS as 0. Can it be rectified by me. How to complain about this discrepancy? Please help.
A person who is having income from any source should always keep the following minimum requirements with them whether they file the return or not.
1. bank statements
2. property tax paid/insurance premium paid receipts
3. housing loan interest certificates
4. donations paid
5. school fees paid
6. Investment proofs
7. capital gains
if shares etc – to get capital gains consolidated statement
if house property purchased or sold – to have full details
8. pan copy
the income tax web is very customer friendly now. so with pan no. anybody can register in the site and down load the form 26 AS – Tax credits available in their name. They can verify whether the return and form 26 as matches with each other.
this way the burden can be reduced to the maximum extent possible
Useful and timely post. Thanks
VERY USEFUL NOTES FOR EMPLOYEE AND PROFESSIONALS.
So right you are. Great article for raising awareness about the issue. People just want to get over with filing tax return and just give Form 16 to income tax pre-parer, till they receive notice from the IT department and then the grill starts!