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Reasons for mistakes in credit for tax payments or TDS

A major reason for difference in refund amount during processing is that the details of tax payment or TDS do not match with the data available with the Department. The critical checkpoints are as under:

  • Corresponding deduction of tax (TDS) on salary by all Employers should be correctly entered in Schedule TDS1 in ITR1 or Schedule TDS 1 for ITR 2.
  • TDS on salary should be entered in Schedule TDS1 ONLY and TDS on other Income should be entered in Schedule TDS 2 ONLY.
  • Tax deduction Account Number (TAN) of the Employer/Deductor is the unique identifier for matching TDS claims made against TDS reported by Employer/Deductor.The TAN number is mentioned on the Form 16 given by the Employer or on the Form 16A given by the Deductor. In case the TAN of the Employer/Deductor is not correctly mentioned, no matching is possible and TDS credit will not be given.
  • If the TAN has been correctly entered but the Employer/Deductor does not report the same TDS details to the Department, especially the taxpayer Permanent Account Number (PAN), then also the TDS cannot be matched. Therefore it is advised to check Form 26AS for the amount which has already been deposited by persons deducting tax on behalf of the taxpayer. Thereafter, the taxpayer should bring this fact in the notice of persons deducting tax so that they can act accordingly.
  • In case of Tax payments of Advance tax or Self Assessment tax, the PAN used to submit the tax challan to the bank should be the same as the PAN used to submit the return. Without a valid PAN the tax payment received from the bank would be in suspense and cannot be matched with tax payment claim as entered in the return.
  • While making the tax payment at the Bank, NO MISTAKE should be made in the challan while entering the PAN, Name, Major head (20 or 21), Assessment Year, Type of tax payment {advance tax (code 100), Self Assessment tax (code 300)}, tax applicable (Income tax other than companies).
  • Any tax payment made under code 400 corresponding to ‘Tax on regular Assessment’ cannot be used for matching and accordingly credit cannot be given against advance tax or self assessment tax claims.
  • The Challan Identification Number (CIN) is the combination of BSR code (any bank branch’s unique 7 digit identification number issued by RBI), date of deposit of challan (DD-MM-YY), and the running serial number of the challan, and is mentioned by the Bank while accepting tax payment on its seal. In case this is not clearly legible, the Bank can be requested to provide correct details. This must be entered correctly in the return while claiming credit.

 

FAQ on Registration on ITD e-filing website & How to upload ITR

What information do I need, to register myself in the ITD e-filing website?

Answer: The basic information required is: PAN, Full Name, Date of Birth/Incorporation, Communication Address, valid e-mail id, Mobile number and Digital Signature Certificate (if applicable). For persons other than Individuals, in additional to the above mentioned information, PAN details and contact details of the Principal contact are required.

What happens if I don’t register?

Answer: Without Registration, the user cannot e-File the Income Tax Return. Also, additional services like Viewing 26AS Statement, status of Income Tax Return, File Rectification, Refund re-issue request, etc cannot be availed. The registration needs to be done only once.

Should Registration be made in the name of the Company or can a director register in his/her name and file the Income Tax Return of the company from his/her User ID?

Answer: No. A company’s PAN is required to be registered on ITD e-filing website for uploading the Income Tax Return of the company. The same applies for Firms, LLP, AOP, BOI, Local Authority, Trust, Artificial Juridical Person and Co-operative society.

What do I do next after registration?

Answer: After registration, ITD will send an activation link on the registered email ID of the taxpayer. Once the taxpayer clicks on the link, the User ID of the taxpayer becomes functional. Now, the taxpayer can login into ITD e-filing website. Therefore, taxpayer is advised to provide a valid e-mail ID during registration process.

In case, taxpayer has entered the wrong email-id during registration and taxpayer is not able to activate the User ID, what is to be done by taxpayer to activate the account?

Answer:

  • Click on the ‘Resend Activation Link’ found on the Login page of e-filing website (click ‘Login Here’ button under Registered User section on the right hand side of the home page).
  • On the page, select the User type and enter details like PAN, Date of Birth/ Incorporation, Password and new e-mail ID. Note: In addition, a Chartered Accountant needs to enter the Membership Number and Enrollment Date.
  • The Activation link is sent to the new e-mail ID. Click on the Activation link. If you do not click the activation link, the registration process is incomplete.

What should I do when the authorized signatory (Principal Contact) assigned in e-Filing application has changed?

Answer: You can assign the new authorized signatory (Principal contact) in e-Filing application. LOGIN and GO TO ‘Profile Settings’ → ‘Update Principal Contact details’, and update the PAN and Contact details of the new principal contact. On submission, the details are updated. To update the DSC of the new principal contact, GO TO ‘Profile Settings’ → ‘Register Digital Signature Certificate’.

What is e-Filing of Income Tax Returns?

Answer: Filing of Income Tax returns is a legal obligation for every person whose total income for the previous year has exceeded the maximum amount that is not chargeable to Income Tax under the provisions of the I.T Act, 1961. Income Tax Department has introduced a convenient way to file these returns online using the Internet. The process of electronically filing your Income tax returns through the Internet is known as e-filing of returns.

How is e-Filing different from the regular filing of returns?

Answer: E-filing offers convenience of time and place to tax payers. This facility is available round the clock and returns can be filed from any place in the world. It also eliminates/ reduces interface between assessee and tax officials. The procedure of e- filing is explained under Help section → e-Filing.

What are the steps in brief to upload the Income Tax Return on this website?

Answer:

  • Visit ITD e-filing website https:\\incometaxindiaefiling.gov.in
  • On homepage, GO TO ‘Downloads’ section and select applicable Income Tax Return Form of the relevant Assessment Year OR Login to e-Filing application and GO TO ‘Downloads’→’Income Tax Return Forms’ and select applicable Income Tax Return Form of the relevant Assessment Year.
  • Download the excel utility of the Income Tax Return (ITR).
  • Fill the excel utility and Validate.
  • Generate an XML file and save in desired path/destination in your desktop/system.
  • LOGIN to e-Filing application and GO TO → e-File → Upload Return.
  • Select the Income Tax Return Form and the Assessment Year.
  • Browse and Select the XML file
  • Upload Digital Signature Certificate, if available and applicable.
  • Click ‘SUBMIT’.
  • On successful upload, Acknowledgement details would be displayed. Click the link to view or generate a printout of Acknowledgement/ITR-V Form.

What do I need to do post uploading the Income Tax Return?

Answer:

  • If the Income Tax Return is uploaded with DSC (digitally signed), on generation of “Acknowledgement” the Return Filing process is complete. The return will be further processed and the Assessee will be notified accordingly. Please check your emails on these notifications.
  • If the return is not uploaded with a DSC (digitally signed), on successful upload of e-Return, an ITR-V Form will be generated. This is an Acknowledgement cum Verification form. A duly verified ITR-V form should be signed and submitted to CPC, Post Bag No.1, Electronic City Post office, Bangalore-560100 by Ordinary Post or Speed Post (without Acknowledgment) ONLY, within 120 days from the date of e-Filing. On receipt of the ITR-V at CPC, the return will be further processed and the Assessee will be notified accordingly. Please check your emails on these notifications.

What is the ‘Pre-Fill’ button in the Excel Utility and how can I use it?

Answer: The ‘Pre-Fill’ button in the Excel utility helps the taxpayer in pre-filling Personal and Tax information as available with Income Tax Department. To pre-fill, Login to e-Filing application and GO TO → Downloads → Download Pre-filled XML to the desired path/destination in your desktop/system. Open the Excel utility (ITR) and click the “Pre-fill” button. This will require you to select the path/destination where you have saved the XML and click OK. The details will be uploaded into your utility. You may edit the tax details, if needed).

If I have paid excess tax, how and when will it be refunded to me?

Answer: To claim the excess paid tax, the assessee has to be file Income Tax Return, irrespective of the fact whether the income is taxable or not. The amount of refund will be remitted to the assessee either through cheque or directly to the bank account as mentioned in the ITR form after the processing of the return.

I have forgotten my password. What is to be done to retrieve it?

Answer: Click on the “Forgot password” link on the homepage of ITD e-filing website. In the ‘Forgot Password’ page, enter your User ID and Captcha Code, and click ‘Continue’. Select one of the below options on the next page:

1) Answer Secret Question- Enter your Date of Birth/Incorporation and answer the secret question, OR

2) Upload the Digital Signature Certificate (DSC) which is registered on e-Filing application.

Click Submit. On successful submission of request, a new system generated Password is sent to your registered e-mail ID. LOGIN to e-Filing web-site using the system generated Password. On first LOGIN using this password, you are prompted to change the Password. Enter a New Password according to the format prescribed and SUBMIT. Please note that your password cannot be the same as your three previous passwords.

Can a LEGAL HEIR e-File the Income Tax Return of the deceased assessee?

Answer: Yes. A Legal Heir can file Income Tax Return, View Status of Income Tax Return, ITR-V Acknowledgment and other filing status in respect of the Income Tax Return of the deceased person for the e-Filed Assessment Year.

The Assessing Officer (AO) designation and code as per ‘Know your PAN’ is different from my Jurisdictional AO.

Answer: Please apply before the jurisdictional Assessing officer to initiate the process of acquiring PAN by Jurisdictional Assessing Officer.

How can taxpayer find his Assessing Officer (AO) Code?

Answer: GO TO ‘Know your Jurisdictional A.O.’ under ‘Services’ menu on the home page of ITD e-filing website. Enter your PAN and know your Jurisdictional AO.

How can I come to know about TAN of my deductor?

Answer: Kindly refer to Form 16 or Form 16A issued by the employer for the TAN. You can also see the details of deductor in the 26AS Tax credit statement made available by the NSDL in its website, which can be easily accessed through ITD e-filing website.

How do I know whether my e-Return is being processed at CPC Bangalore or the Assessing Officer?

Answer: The taxpayer is advised to LOGIN to the website and GO TO ‘My Account’ → ‘My Returns/Forms’ and check the status of Income Tax Return for a given Assessment Year.

Is it mandatory to file return of income after getting PAN?

Answer: No. The liability to file return of income is governed by different set of parameters laid down in the Income Tax Act 1961.

Who can file the return for a deceased assessee?

Answer: A legal heir can file the return in such case.

How can I assign myself as a LEGAL HEIR for a deceased person?

Answer: To register as a Legal Heir, the deceased and the requester should be registered in the e-Filing application.
Below are the steps for registration of Legal Heir:

Step 1 – LOGIN to e-Filing application and GO TO → My Account → Register as Legal Heir.

Step 2 - Provide details and attach a zip file containing the documents (a copy of the Death Certificate, a copy of PAN card of the deceased, self attested PAN card copy of Legal Heir and Legal Heir certificate).

Step 3 – Click on the SUBMIT button.

Step 4 – The request will be sent to the e-Filing Administrator.

Step 5 – Requester should send a hard copy of the Death Certificate, a copy of PAN card of the deceased, self attested PAN card copy and Legal Heir certificate to the CPC- eFiling Administrator, Post Bag No. 12, Electronic City Post office, Bangalore- 560100 within 30 days.

Step 6- On receiving the documents, the e-Filing Administrator will review and approve and a confirmation e-mail is sent to the registered e-mail ID.

Once assigned as a Legal Heir, can I e-File for the deceased person for compulsory DSC cases?

Answer: Yes. You should register your Digital Signature Certificate (DSC) in e-Filing application, if not already registered. Once registered, use your DSC to file for the deceased person.

Ten Tax Saving Options for Salaried Employees

1. Leave allowance: An employee can use such an allowance to cover his domestic travel and can be used for air, rail, and road transport.

2.Gratuity paid to an employee also has taxation benefits. To determine the taxability of gratuity, it is important to understand whether an employee is covered by payment of gratuity act. If an employee is covered by this act, lower of the following will be exempted from tax: -

  • 15 days salary based on salary drawn for each year of service.
  • Rs. 10,00,000/-
  • Actual gratuity received.

If an employee is not covered under the gratuity act then, the lower of the following will be exempted from tax:-

  • ½ month salary for each completed year of service.
  • Rs. 10,00,000/-
  • Actual gratuity received.

3.New pension scheme (NPS) : In this scheme an employer contributes an amount to the NPS which is the same amount that is contributed by the employee. Both of these contributions are eligible for deduction u/s 80 CCD (2) of the act. Thus such contributions reduce the overall tax liability of the employee.

4.House rent allowance (HRA) is paid by an employer to an employee to pay any rental towards his house property. An exemption is available under such HRA. The exemption is based on the least of the following: -

  • An amount equal to 50% of the yearly salary received (applicable to major Indian metros and 40% in other cases)
  • Actual HRA received
  • Rent paid in excess of 10% of the salary received in a year

5. Travelling allowance: Such an allowance is paid by the employer to the employee to meet his cost of travel on tour or on transfer from his work. This allowance can be completely exempt if the employee utilizes an amount equal to or more than the allowance.

6. Another option that is available to the employee is transport allowance. Such allowance is exempt up to Rs. 800/- per month i.e. 9600/- per year as a maximum deduction is available against this allowance.

7. In case a salaried employee has children, he should ask his employer to pay him children education allowance. A deduction of Rs. 100/- per month per child up to a maximum of two children is available.

8. An employee is entitled to receive perquisites  from his employer. The tax on such perquisites is generally borne by the employer and is tax exempt for the employee. Perquisites include payments by the employer to the employee such as car conveyance, free food and beverages, interest free or concessional  loan, sweeper/gardener/cook allowance, leave travel concession etc. These options are generally available as a part of salary structuring which an employee can provide to his employer.

9. Other general deductions u/s 80 C is also available to the salaried employee. Under this section, he can make investments in approved FD, Equity oriented MF, PPF etc. He can also pay his life insurance premiums. The total benefit available under this section if Rs. 100000/-.

10. An employee can also make several donations u/s 80 G and use that to reduce his total income. Such donations offer either 100% deduction or 50% deduction depending on the institution to which the donation is made.

Budget -1% TDS on transfer of Immovable property exceeding Rs.50 lakh

Tax Deduction at Source (TDS) on transfer of certain immovable properties (other than agricultural land)

There is a statutory requirement under section 1 39A of the Income-tax Act read with rule 11 4B of the Income-tax Rules, 1962 to quote Permanent Account Number (PAN) in documents pertaining to purchase or sale of immovable property for value of Rs.5 lakh or more. However, the information furnished to the department in Annual Information Returns by the Registrar or Sub-Registrar indicate that a majority of the purchasers or sellers of immovable properties, valued at Rs.30 lakh or more, during the financial year 2011-12 did not quote or quoted invalid PAN in the documents relating to transfer of the property.

Under the existing provisions of the Income-tax Act, tax is required to be deducted at source on certain specified payments made to residents by way of salary, interest, commission, brokerage, professional services, etc. On transfer of immovable property by a non-resident, tax is required to be deducted at source by the transferee. However, there is no such requirement on transfer of immovable property by a resident except in the case of compulsory acquisition of certain immovable properties. In order to have a reporting mechanism of transactions in the real estate sector and also to collect tax at the earliest point of time, it is proposed to insert a new section 194-IA to provide that every transferee, at the time of making payment or crediting of any sum as consideration for transfer of immovable property (other than agricultural land) to a resident transferor, shall deduct tax, at the rate of 1% of such sum.

In order to reduce the compliance burden on the small taxpayers, it is further proposed that no deduction of tax under this provision shall be made where the total amount of consideration for the transfer of an immovable property is less than fifty lakh rupees.

This amendment will take effect from 1st June, 2013.


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