22 April 2011
I am in receipt of an Income Tax Intimation u/s 143(1) demanding additional payment of income tax for AY 2009-10. I am a salaried employee, and my income for AY 2009-10 included superannuation income settlement from my ex-employer as well. TDS on Superannuation was calculated by my ex-employer as per the provision of SCH IV (...tax on the amounts so paid shall be deducted at the average rate of tax at which the employee was liable to tax during the preceding three years or during the period, if less than three years...). I had e-filed my ITR for AY 2009-10, and shown the Superannuation Income separately from another employer. CPC Income Tax Department has treated this superannuation income at normal rates of income tax, and sent me this demand notice. I did not claim relief u/s 89(1). I immediately filed an application for rectification of mistake u/s 154, sent under certificate of posting. However, this application has been rejected now by the IT Dept. Please advise on what to do as the TDS has been deducted correctly by applying the average rate of tax for last 3 years by my ex-employer.
22 April 2011
Hi Manoj. Schedule IV, Part B, Rule 6 states as follows: "6. Deduction of tax on contributions paid to an employee.-- Where any contributions made by an employer, including interest on contributions, if any, are paid to an employee during his lifetime, in circumstances other than those referred to in clause (13) of Section 10 tax on the amounts so paid shall be deducted at the average rate of tax at which the employee was liable to tax during the preceding three years or during the period, if less than three years, when he was a member of the fund, and shall be paid by the trustees to the credit of the Central Government within the prescribed time and in such manner as the Board may direct."
My employer has deducted and paid tax as per the above rule.
Since the time for submitting the revised ITR for AY 2009-10 had already passed, can you please suggest how can I claim relief u/s 89 now? Would help if you can detail the process I need to follow please.
23 April 2011
THANKS FOR SHARING FURTHER DETAILS ON THE QUERY THE MONEY RECD IS FULLY EXEMPT UNDER SECTUION 10(13) IF THE SAME HAS BEEN RECD ON RETIREMENT IF THE MONEY IS RECD OTHERWISE THAN ON RETIREMEMNT THAN IT IS NOT SO EXEMPT RELIEF UNDER SECTION 89 IS NOT AVAILABLE AS THE PAYMENT IS FROM SUPPERANNUATION FUND DO NOT GET CONSUFED BY TDS RATES THEY ARE FOR DEDUCTION OF TAX ACTUAL TAX LIABILITY MAY DIFFER
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