TDS ISSUE

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

21 July 2010 Facts of the case:

Mr.S is an individual have deposited Rs.10L in FD for 5 years on 01.04.2005. He died on 31.12.2005. There is no nomination for this account. The legal heirs has been decided in the Court of Law on 30.06.2010. Now the legal heirs has appointed Mr.X, an individual for the purpose of collecting the proceeds from banker and distributing the proceeds to the banker.

Banker has raised the following queries:

·On whose name the TDS has to be deducted
·If TDS has been deducted in the name of Mr.X, whether Mr.X has remedy under the act.

My view is as follows:

One view:

TDS has to be deducted in the name of legal heirs since the TDS provisions will be based on the recipient of taxable income and not receipts.

Other view:

S-194A – “Any person …..credit of such income to the account of the payee….”

Payee refers to the person who receives the money. Hence tax can be deducted in the name of Mr.X.

In this case, how the above transaction will reflect in his IT returns.

Kindly give your views.

CA. Anoop Gadia

CA. Anoop Gadia (Expert)
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21 July 2010 any amount received by the nominee or legal hair of assessee on the death of such assessee other than interest are not taxable
xxiii and xxiv of sub section (2) of Section 80C.

on this problem the TDS detected on legal heir is right and they can set off for there tax liability from this TDS or Refund