Incorrect TDS section and Presumptive taxation
This query is : Resolved
11 July 2024
Dear Sir,
Mr A files his return u/s 44AD. He provides gaming services to individuals and corporates. One of his parties deducted TDS u/s 194I(a) instead of 194C and deposited the tax. He uploaded his return showing his entire turnover of 750500/- u/s 44AD.
But he got the intimation of defective return mentioning that the TDS is deducted u/s 194I which is ineligible for presumptive taxation.
There was no event of renting out of anything nor his invoice mentions rent etc.
How can the defect be rectified?
Kindly guide me.
Thanks & Regards,
Suraj
Mr A files his return u/s 44AD. He provides gaming services to individuals and corporates. One of his parties deducted TDS u/s 194I(a) instead of 194C and deposited the tax. He uploaded his return showing his entire turnover of 750500/- u/s 44AD.
But he got the intimation of defective return mentioning that the TDS is deducted u/s 194I which is ineligible for presumptive taxation.
There was no event of renting out of anything nor his invoice mentions rent etc.
How can the defect be rectified?
Kindly guide me.
Thanks & Regards,
Suraj
11 July 2024
Need to rectify the TDS return by the party. The TDS should have been deducted u/s. 194C IT act.
Message likes :
1 times
11 July 2024
You are welcome.
13 July 2024
Rambhia Sir, the party is not ready to revise their TDS return saying they are correct. Can we show this transaction under other income, though the TDS is deducted u/s 194I(a)? And rest of sale u/s 44AD? He is registered u/s GST also.
13 July 2024
If it is the same business, you cannot bifurcate. If different business then you can try.
13 July 2024
Sir, the business of Mr A is loss-making and also the books were not properly maintained by him, so presumptive taxation was opted since last year.
He has only savings interest as other income. The other party filed tds u/s 194I(a) this year, his return got defective.
What if we file his return as a normal return showing loss in response to the defective return notice?? will the tax audit be applicable then??
Kindly guide.
Regards,
Suraj
He has only savings interest as other income. The other party filed tds u/s 194I(a) this year, his return got defective.
What if we file his return as a normal return showing loss in response to the defective return notice?? will the tax audit be applicable then??
Kindly guide.
Regards,
Suraj
13 July 2024
Yes, in that case audit will be applicable. You can file return under normal assessment, with minimum 6/8 % profit margin.
13 July 2024
Sir, no other solution except to revise TDS return?? without his mistake.... His income is hardly anything and now if Tax audit is to be done then it will be costly affair for him. Is tax audit to be done for next 4 years also?
13 July 2024
You may try it with secondary business under rental income and declare the income under IF HP..
13 July 2024
Hmmmmm Yes sir... But that other party is not even ready to revise TDS return nor provide contact details of their CA... Actually IT dept should provide some solution in such cases.....
13 July 2024
I repeat declare the sec. 194I(a) income under IF HP as secondary business...
13 July 2024
Sir, IF HP mean Income from House Property? or to show under Income from Other Sources?? IFHP activity is not registered under his GST registration.
I'm sorry if I am annoying you.
I'm sorry if I am annoying you.
13 July 2024
Yes, you need to register there as early as possible, if the TDS is & will be deducted u/s. 194 I(a), there is no alternative.
It is renting of machinery & not House property only.
It is renting of machinery & not House property only.
13 July 2024
I will ask him to update his GST registration. Will show this full transaction amount of 2.85 lakhs under other sources as It won't accept u/s 44AD, Thank You sir for reverting to my doubts, and queries so patiently.
13 July 2024
It is doubtful now, whether the system will accept the income under IFOS, as for the TDS section over the income. So, be careful. Good Luck.
25 July 2024
Dear Sir,
the party corrected their TDS return by changing the section from 194I(a) to 194C in their TDS return. The correction is reflected in Mr A's Form 26AS. So the defective return u/s 139(9) was filed after correcting the defecting. But now again Mr A received the same notice:
" You have filed your income-tax return in form ITR-4. As per TDS details in your Form 26AS, taxes have been deducted under sections 194IA/194IC/194S/194B/194BB/194BA, etc. of the Income-tax Act, 1961. These sections are reflected as (4IA/4IC/94S/94B/4BB/4BA) in Form 26AS. These sections imply heads of income for which form no. ITR-4 is not the appropriate form. Thus, the required schedules for reporting incomes pertaining to said TDS sections are not present in your return of income filed in form no. ITR-4."
What could be the possible reason for this? The revised Form 26AS shows F in booking status against the entry of 194I(a) and the new entry of Section 194C is correctly appearing. AIS takes time to update. The Mr A's party corrected their TDS return on 19th Feb and so response to defective return was filed on 21st Feb 2024 after the revised form 26AS
Please guide.
Thanks & Regards,
Suraj
the party corrected their TDS return by changing the section from 194I(a) to 194C in their TDS return. The correction is reflected in Mr A's Form 26AS. So the defective return u/s 139(9) was filed after correcting the defecting. But now again Mr A received the same notice:
" You have filed your income-tax return in form ITR-4. As per TDS details in your Form 26AS, taxes have been deducted under sections 194IA/194IC/194S/194B/194BB/194BA, etc. of the Income-tax Act, 1961. These sections are reflected as (4IA/4IC/94S/94B/4BB/4BA) in Form 26AS. These sections imply heads of income for which form no. ITR-4 is not the appropriate form. Thus, the required schedules for reporting incomes pertaining to said TDS sections are not present in your return of income filed in form no. ITR-4."
What could be the possible reason for this? The revised Form 26AS shows F in booking status against the entry of 194I(a) and the new entry of Section 194C is correctly appearing. AIS takes time to update. The Mr A's party corrected their TDS return on 19th Feb and so response to defective return was filed on 21st Feb 2024 after the revised form 26AS
Please guide.
Thanks & Regards,
Suraj
25 July 2024
Unless the AIS reports gets corrected, the return will not get accepted.
25 July 2024
Ohh....... sir, I heard that AIS takes time to update. But in AIS, they also mention following:
- If there is variation between the details of tax paid as displayed in Form26AS on TRACES portal and the information relating to tax payment as displayed in AIS on Compliance Portal, the taxpayer may rely on the information displayed on TRACES portal for the purpose of fling of tax return and for other tax compliance purposes.
Then, can't they consider updated Form 26AS?
- If there is variation between the details of tax paid as displayed in Form26AS on TRACES portal and the information relating to tax payment as displayed in AIS on Compliance Portal, the taxpayer may rely on the information displayed on TRACES portal for the purpose of fling of tax return and for other tax compliance purposes.
Then, can't they consider updated Form 26AS?
25 July 2024
For few days this is applicable. Why the AIS is still not updated? Means AIS is correct.
25 July 2024
Lets see, hopefully AIS gets updated soon with revised data. Thank you sir.
25 July 2024
"Sorry, I am not a featured member."
For featured members contact....
https://www.caclubindia.com/catalogue/featured.asp
For featured members contact....
https://www.caclubindia.com/catalogue/featured.asp
25 August 2024
Good Luck.
26 August 2024
Sir, you help us in resolving our queries.... Thank you so much.....
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- REGARDING GST ON COMMERICIAL PROPERTY
- Is this income indian or foreign income?
- 15ca /15cb whose income tax login? remitter or nri seller's login?
- GST on export of services and Input Credit
- ITC temporary reversal and reclaim
- RCM applicability on Rent Paid by Registered Person to Unregistered Landlord for Residental Building
- TDS U/S. 194NF
- Regarding Documentation & Compliances for Opening of Unit of Pvt Ltd.
- Applicable TDS rate for sale of property in Nov 2024
- REGARDING 25 AS DATE OF PAYMENT AND DATE OF BOOKING
- Short and Excess provision of expenses
- Issue of gst e invoice
- Interchangeable words in accounts
- Adjusted profit/Loss in the case of LLP and Pvt. Ltd.company
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
- Query for dubts
- Regarding Resignation by Auditor from Pvt. Ltd.
- Regarding einvoice taken on nil rated sales
Trending Online Classes
CAclubindia
