Tax Refund in case of Salary Recovery
This query is : Resolved
10 August 2020
As per last F.Y rule any prerequisite over and above the limit of 1.5 lakh is taxable. My employer paid excess superannuation fund based on provisional rate of contribution (% of Basic + DA). The fund crossed the limit of 1.5 lakh and tax has been deducted as per tax slab. Later in this F.Y when the rate of contribution to superannuation fund is finalized, the percentage has been decreased and excess amount paid as part of perquisite in last F.Y is being recovered in this F.Y.
Now the problem is that if I calculate superannuation fund for last F.Y based on final rate of contribution, my total perquisite has not crossed 1.5 lakh ans I would not have been taxed. But as employer has already paid excess in last F.Y so deducted tax and submitted the IT department. Now recovery is being done in this financial year but tax paid in last F.Y on behalf of that recovery is no where considered and employer is giving explanation that tax id deducted in the year salary is paid. As perquisite paid in last F.Y so tax deducted and recovery is done in this F.Y so that recovery will become part of this F.Y perquisite and taxed accordingly.
As a tax payer it appears to me that as amount paid in last F.Y is recovered back in this F.Y, so I have paid tax last year on a amount which I actually never received. Can anyone of you help in understanding how I can get arrears of TDS deducted or that TDS deducted adjusted in this F.Y
Now the problem is that if I calculate superannuation fund for last F.Y based on final rate of contribution, my total perquisite has not crossed 1.5 lakh ans I would not have been taxed. But as employer has already paid excess in last F.Y so deducted tax and submitted the IT department. Now recovery is being done in this financial year but tax paid in last F.Y on behalf of that recovery is no where considered and employer is giving explanation that tax id deducted in the year salary is paid. As perquisite paid in last F.Y so tax deducted and recovery is done in this F.Y so that recovery will become part of this F.Y perquisite and taxed accordingly.
As a tax payer it appears to me that as amount paid in last F.Y is recovered back in this F.Y, so I have paid tax last year on a amount which I actually never received. Can anyone of you help in understanding how I can get arrears of TDS deducted or that TDS deducted adjusted in this F.Y
12 August 2020
Your query is not properly clear but as far as I am able to understand is your employer has deducted TDS on a provisional basis and when the things were finalized you find out that ultimately tax should not have been deducted because of your particular perquisites did not cross the specified limit.
If this is the case, the TDS Deducted and Deposited on a provisional basis will be appearing in your Form 26AS. You just need to file ITR with the correct details and you will get the refund of TDS from the Income Tax Department.
If this is the case, the TDS Deducted and Deposited on a provisional basis will be appearing in your Form 26AS. You just need to file ITR with the correct details and you will get the refund of TDS from the Income Tax Department.
13 August 2020
Dear CA Karan,
Your interpretation of my query is absolutely correct. The problem here is the employer has already issued Form-16 with details of enhanced / provisional contribution / TDS. Employer is not in mood to revising the Form-16. Now if I fill any detail in ITR return which will not match with Form-16, I will receive notice from Income Tax department. What information I will be requiring from my employer to justify that notice from Income Tax department? Is there any method that Employer takes the recovery of extra TDS directly from Income Tax department and employee is not at all bothered by this?
Your interpretation of my query is absolutely correct. The problem here is the employer has already issued Form-16 with details of enhanced / provisional contribution / TDS. Employer is not in mood to revising the Form-16. Now if I fill any detail in ITR return which will not match with Form-16, I will receive notice from Income Tax department. What information I will be requiring from my employer to justify that notice from Income Tax department? Is there any method that Employer takes the recovery of extra TDS directly from Income Tax department and employee is not at all bothered by this?
13 August 2020
You are correct Mr. Gautam. Now you have two option
1. Ask your employer to revise TDS Return. So that a revised Form 16 can be generated. But as you are saying he is not willing to do that so it will be tough for you to convince him.
2. Take an undertaking from employer that earlier Perquisites were calculated on a provisional basis and TDS deducted accordingly but Actual perquisites are different from the calculation made earlier on a provisional basis and you file the ITR with actual details. And if any notice will come, you submit that undertaking to IT Depp.
But if both the situations are not possible then either you have to leave TDS by filing ITR according to Form 16 or otherwise file ITR with correct details and reply to the IT notice if any issued against you in future.
1. Ask your employer to revise TDS Return. So that a revised Form 16 can be generated. But as you are saying he is not willing to do that so it will be tough for you to convince him.
2. Take an undertaking from employer that earlier Perquisites were calculated on a provisional basis and TDS deducted accordingly but Actual perquisites are different from the calculation made earlier on a provisional basis and you file the ITR with actual details. And if any notice will come, you submit that undertaking to IT Depp.
But if both the situations are not possible then either you have to leave TDS by filing ITR according to Form 16 or otherwise file ITR with correct details and reply to the IT notice if any issued against you in future.
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