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It dept considered full ctc in assessment, sent demand notic

Reddy (Software Engineer) (28 Points)

11 October 2011

I have submitted my returns for 2010-11. I have taken salary from Form-16 (after considering exemptions) and put it in the ITR form while submitting returns. Now I have received demand notice from IT dept and they have considered full CTC as salary.

I couldn't understand from where IT dept got this number. I have also checked in 'Form 26AS' in "Amount Paid/ Credited (506)" column and it is showing even less amount than what I have mentioned in the returns (that is if IT dept is considering this form then I should be receiving refund)

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6 Replies

Sunil Singh Thakur (AAO) (295 Points)
Replied 11 October 2011

Well mr reddy, you have not mentioned your ctc componentwise. However, income tax is always payable on your gross salary less deductions and exemptions available under various section of Income tax act.

The CTC may comprise your salary and other perquisits , reimbursement of personal expenses or dis charge of any other liability by your employer that u were liable to pay. However, your taxable salary should be reflected in Form 16 properly, there should be no difference between your taxable salary and CTC. It seems that there has been a mistake in your form 16. The copy submitted to the I.T. department is different that is why there is a demand. If you find that your actual taxable income is inflated , you can very well challenge the same before Income Tax department. No addition/deletion can be made on flimsy ground by the I.T. Department. Again no addition can be made without giving u an ooportunity of being heard.

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Reddy (Software Engineer) (28 Points)
Replied 11 October 2011

@ Sunil Singh Thakur, So should I ask my company to verify what details have been submitted to IT dept in form-16?

How can I challenge IT dept's notice?

Sunil Singh Thakur (AAO) (295 Points)
Replied 11 October 2011

well, mr. reddy as you have mentioned in your query itself that the demand notice by IT dept has been sent based on your CTC only. so there is little that can be done about it.

However, for the sake of your knowledge when intimation under section 143(1) is sent to the assessee with a demand , it is done on the basis of return only. in all likelihood your form 16 may not be tallying with the data furnished by your employer to I.T. department.

However, any addition which is not apparent from the return of income should not be made without giving to u an opportunity of being heard. So, first be assured that whether I.T. has assessed you on an income more than your CTC. Otherwise, there is no point in challenging.

Reddy (Software Engineer) (28 Points)
Replied 11 October 2011

@ Sunil Singh Thakur, Thanks for the response. IT dept took my CTC and calculated tax liability on that, they didn't reduce the exemptions (Professional Tax, and other allowances) provided to me.

Hence they reached to a higher number for tax liability. Should I just file a rectification or find out what my company submitted to IT dept?

N.J.R (Practice) (346 Points)
Replied 03 January 2012

Dear Sir,

Pls check the figure of Income Chargeable under Salaries (column 4) shown under Schedule TDS1 in ur ITR. Dept might hv consd that figure as Net Salary Income. If that is the case, pls file/upload rectification return online by correcting that figure by showing same figure of net salary income as shown under Part B - TI of ur ITR. Rectification will take around six months at CPC.

Thanks n Regards,

NJR

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Reddy (Software Engineer) (28 Points)
Replied 23 January 2012

Thank you NJR... I have already filed rectification and just got refund credited in account.

It is exactly what I did.

Earlier when I first filed, I thought it was a mistake in Form-26 that my salary is showing less (it was showing exactly one month less). However when I received Form-16 from company that number is different (it is more than 11months salary and less than 12th months salary).

But now I filled details in the "TDS" sheet identical to Form-26 and the number at "Part B TI" similar to the one in Form-16.

Thanks a lot all of you.