TAX TALK-25.06.2012-THE HITAVADA

TAX TALK-25.06.2012-THE HITAVADA

TAX TALK

BY CA. NARESH JAKHOTIA (Chartered Accountant)

“WRONG SUBMISSION OF FORM NO. 15G & THE CONSEQUENCES”

Query 1]

1.      I retired on Dec.-2011 under the VRS scheme. I have got all my dues and retirement benefits on Jan-2012, which is exempt from tax.

2.      My net Taxable Salary after deductions under chapter VI-A was Rs. 2,45,020/-. The employer had deducted TDS amounting Rs. 8,500/- whereas my tax liability was at Rs. 6,700/-. Later I invested my savings in FD with SBI for a period of 5 years on Jan.-12 & the interest is deposited on a monthly basis. As I was under the impression that excess tax is already deducted from my salary income, I directed the bank not to deduct TDS on interest and accordingly filled up the Form No. 15G and submitted it to the bank. Now at the year end, I came to know that the total interest I have received up to March-12 is around Rs. 37,000/-. Thus, I have to pay additional tax in excess of my TDS amount. Hence, my queries are:

a.      Would there be any complications since I submitted the Form no. 15G and later is needed to pay more tax? What are the consequences for this?

b.      Do I need to report the amount received towards PF, Gratuity, Leave Encashment & VRS which are exempt under section 10 in my return form (Sahaj)? [Piyush Meshram-zeusgold.1@gmail.com]

Opinion:

1.      Form No. 15G- When can be submitted:
Form No. 15G is a declaration form which can be filed by non senior citizens if the following two conditions are satisfied:
a) The final tax on his estimated total income computed as per the provisions of the Income Tax Act should be NIL, and
b) The aggregate of the interest etc. received during the financial year should not exceed the basic exemption limit.
If both these conditions are satisfied, Form 15G may be furnished and in such case, the entire interest income can be paid without deduction of tax at source.

2.      Penalty for submitting false statement:
Before signing the verification, the declarant should satisfy himself that the information furnished in the declaration is true, correct & complete in all respect. Any person making a false statement in the declaration shall be liable to prosecution u/s 277 of the Income Tax Act-1961 and on conviction:
a) in case where tax sought to be evaded exceeds Rs. 1 Lacs (Rs. 2.50 Lacs w.e.f. 01.07.2012), with a rigorous imprisonment which shall not be less than 6 months but which may be extend to 7 years & fine.
b) in any other case, with rigorous imprisonment which shall not be less than 3 months but which may extend to 3 years (2 years w.e.f. 01.07.2012)& fine.

3.      Remedy now available:
It appears that you have submitted Form No. 15G under the wrong impression that tax on your estimated income for the relevant year is Nil. You may pay the balance amount of your tax liability now at the time of filing the return of income. As far as prosecution is concerned, it may be noted that the Commissioner of Income Tax is empowered to grant immunity from prosecution u/s 278AB of the Income Tax Act-1961.

4.      Exempt Income & Reporting in Sahaj:
The exempt income is required to be reported in the Sahaj in Part D (D19).

Query 2]

I have fixed deposits in various banks. They are doing deducting tax at source (TDS) but not giving credits to me by depositing it in the Government A/c.  I am not getting the credit of the amount of TDS & the same is not being reflected in 26AS. What procedure I should adopt to get the full TDS Credit? Where should I complain? [U.C.Sahu, Bhilai - uttamindustries@sify.com]

Opinion:

1.      The person deducting the tax at source is duty bound to:

a.       Deposit the tax deducted at source within prescribed time to the Government Treasury.

b.      File the Quarterly TDS return in respect of the Tax Deducted

c.      Issue the TDS Certificate to the Deductee within a prescribed time.

2.      For non compliance of each and every part mentioned above, there is a separate penalty and consequences under the Income Tax Act-1961 as under:
a] For non issuance of TDS Certificate within a prescribed time, penalty is imposable u/s 272A (2) @ Rs. 100/- per day during which the failure continues. However, the amount of penalty cannot exceed the amount of tax deductible/deducted.
b] For non filing of TDS Return also, there is a penalty provision of Rs 100 per day. The recent Finance Act-2012 has imposed a fee of Rs. 200/- per day for late filing of TDS Return. Besides, a penalty of Rs. 10,000/- to Rs. 1,00,000/- is there for non filing or inaccurate filing of TDS return. The amendment is w.e.f  01.07.2012.

3.      Without Quarterly TDS Return being filed by the Deductor, you will not be entitled for the Tax Credit in respect of TDS done from payment made to you. Also, unless and until the TDS return is filed by the Deductor, deductee will not be able to view the TDS Credit in Form No. 26AS.

4.      There is a general grievance that in many cases the Bank and other Tax Deductor are either not filing the quarterly TDS return (or are not issuing the TDS certificate) despite many requests & reminders by the Deductees.

5.      In such cases, Deductee can follow the following approach:

i.        Write a letter to the Deductor incorporating:
a] The details of payments done and the tax deducted therefrom.
b] Provision of Section 203 which requires the Deductor for issue of tax certificate within one month from the date of tax deduction

ii.     Keep the proof of letter issued to the Deductor

3. If despite this, the certificate is not issued, write a letter to Joint Commissioner or Addl. CIT of TDS wing who has jurisdiction over the Deductor mentioning the detailed facts elaborated above.

5. We advise all our readers to regularly track all the tax deducted & deposited in your account [i.e. Tax Credit in Form No. 26AS] by registering your PAN at www.incometaxindia.gov.in. In the absence of availability of TDS in form No. 26AS it would be difficult for the Assessing Officer to grant the TDS Credit.