Background:
My cousin has just started freelancing at a startup, after quitting his regular job. His first client paid him correctly for his first invoice in November 2017, but the TDS that the client deducted, is not reflected in form 26AS even though the client said it would happen by December 15th 2017. My cousin has raised this matter with the client's accounts department and the accounts department checked on the 24th of March, emailed him that they had entered some PAN detail wrongly, mentioned it has been corrected and will be reflected in form 26AS in 4 to 6 days. The TDS is still not shown on 26AS.
Questions:
1. Since the amount earned via freelancing is not more than Rs.70000 upto March, and since there's also the form 16 from his previous employer, can he file his tax return in ITR1 and mention the 70000 as "additional income"? Instead of filing taxes as ITR4, because the startup seems to have either not paid the TDS to the government or has paid it under some other PAN number and has no intent of correcting the error.
2. Since the TDS is not there on 26AS, I guess the only problem my cousin will face is that he will have to pay the TDS amount himself. Apart from that I hope he does not have to worry about any other potential problems?
CAclubindia
