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Thread: Refund of tax deducted on arrears

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    Junior Member mk1969 is on a distinguished road
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    Question Refund of tax deducted on arrears

    The Govt will deduct tax from the arrears to be paid to Govt employees. Is there any provision that the deducted amount can be refunded/claimed. Pse explain any body. thank u.

  2. #2
    Junior Member amitava is on a distinguished road
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    Unhappy Refund of IT ...

    No. The PAOs can only credit the IT head. They are not authorised to withdraw any amount from it. Once IT is deducted, refunds can only be authorised by the ITOs through a refund order. Whatever leeway was available to PAOs earlier to make some adjustments within the financial year has become almost impossible because of the requirements of e-filing (TIN, TAN & PAN) system put in place.

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    Senior Member jitendraacr is on a distinguished road
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    it can be claimed only by filing IT return in appropriate form. there is no other provision.

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    Member mrajeev is on a distinguished road
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    Thumbs up

    I am in disagreement with the opinion above. The Tax is calculated on the overall income during the FY and as such, the amount can be adjusted against the Balance Tax payable during the rest of the year. Further, if the refund is done in the same quarter in which the tax was deducted (i.e. before e-filing the qurarterly return by the PAO), the same can be refunded. The PAOs can ensure that excess tax is NOT deducted in the last month of the quarter and balance tax, if any, after proper calculation can be deducted in the next month, which will eventually the first month of the next quarter, so that enough time is available for making adjustments/refunds.

  5. #5
    Senior Member sudacgwb
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    Smile Refund of excess IT paid/deducted at source.

    Sir,

    Department cannot refund the income tax deducted from the employee even after knowing excess has been deducted from the employee towards income tax. Normally DDOs wont deduct income tax unless their computations show the tax is due from the employee.
    In respect of the income tax deducted at source, if in excess of what is due, one must file and get the refund from the income tax department who will directly credit to the employee's account, if provided in the Return Filed. IN FACT INCOME TAX DEPARTMENT pays interest also for the delay in refunding the excess money collected.

    (mk1969) Coming to another aspect of the one who has started the thread, section 89 provision can be utilised to spread the income over the years to which it corresponds and get the refund, if due.

    ss

  6. #6
    Senior Member badri mannargudi is on a distinguished road
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    Exclamation Excess TDS and refund thereof

    Quote Originally Posted by sudacgwb View Post
    Sir,

    Department cannot refund the income tax deducted from the employee even after knowing excess has been deducted from the employee towards income tax. Normally DDOs wont deduct income tax unless their computations show the tax is due from the employee.
    In respect of the income tax deducted at source, if in excess of what is due, one must file and get the refund from the income tax department who will directly credit to the employee's account, if provided in the Return Filed. IN FACT INCOME TAX DEPARTMENT pays interest also for the delay in refunding the excess money collected.

    (mk1969) Coming to another aspect of the one who has started the thread, section 89 provision can be utilised to spread the income over the years to which it corresponds and get the refund, if due.

    ss
    Dear friends,
    The A.Os/DDOs (including those in Incometax Department) are supposed to transfer the amounts deducted as TDS to Govt of India-m Account Income Tax. Hence there is no possibility to expect any return of excess amount of TDS before the assessment is done by the jurisdictional Income Tax officer.
    The case of Advance payment of Incometax is different, in the sense that while paying the last instalment of Advance payment adjustment of any excess payment is possible.(This provision is not applicable to salary Class, for obvious reasons)

    As an aside, It is true that normally DDOs or AOs, as the case may be, would deduct TDS only after working out the details of income and the deductions (that are permissible) on the basis of information provided by the individual ( LIC Premia and others). In the current F.Y in some departments, without applying their mind, some DDOs/A.Os have deducted TDS at flat Rates of 20% or 30%, as the case may be. Things could have been better, had such A.Os/DDOs taken care to see GConnect (and like reliable websites) which had given Excel Sheet(there would not have been any exess TDS).
    With regards,
    Badri
    Last edited by badri mannargudi; 25-03-2009 at 08:38 AM.

  7. #7
    Member mrajeev is on a distinguished road
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    Thumbs down Refund of Exess Tax Deducted

    Sir,
    The amount deducted from the Salary for a month is deposited into the Govt. account (Income Tax) on the first working day of the following month. However, this is not supported by any other document detailing the amounts deducted from each individual. These details are now filed filed online as quarterly return, giving the details of Tax Deducted at Source from each individual, against themr PAN No. Therefore, the refunds can be adjusted in the following months in the same quarter, ie. before submitting the quarterly return, as the monthly payment is total amount deducted from all the assessees, so far as the net payment made during the quarter tallies with the amount mentioned in the quarterly return.

    Further, it is the responsibility of the individual concerned to inform the DDO/AO about the savings made by him other than GPF/HBA as the DDO/AO will not be aware of his personal savings. Despite knowing these facts, some officials did not inform the DDO about their extra savings while 6th CPC arrears were declared, as their GPF was sufficient for bringing their Taxable income below 1.5 Lacs. However, the Arrears made their case different and without any information about the Interest Paid on Outside Housing Loans/LICs, the DDOs were bound to calculate the Tax and deduct the same from the Arrears. As per the Finmin orders, they were left with no time to contact each and every officer for calling for the same.

  8. #8
    Senior Member sudacgwb
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    Mr.Mrajeev,


    1. Tax deducted will become eligible for refund or otherwise only after the computation of the tax payable after the financial year is over and due for assessment.

    2. If any excess tax is deducted due to arrears or otherwise, in the beginning or in the middle of the financial year, the employee has the scope to inform his DDO/AO/HOO to reduce the tax deduction at source or not to deduct any more amount towards income tax giving his computations based on actual receipt/salary due to be received

    3. Once the year is over one is bound to file the tax Returns with ITO enclosing or citing the Form-16 and claim the refund.

    4. Tax becomes due for refund only after the financial year is over. There is no scope to get the refund before it is due for assessment.

    5. As of now, there is no scope to adjust the excess paid this year towards the tax for next year

    6. Income tax department will refund the excess tax paid by the employee with interest for late refund, if that happens.

    ss

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    Senior Member jitendraacr is on a distinguished road
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    Dear friends
    What Shri Sudaji explained is correct. There is no provision of adjustment at the end of employer. It can be claimed only with IT department. One thing more I wish to add that IT department is considering small amount of refunds/adjustment by the employer itself. It may come soon, most probably in this financial year.
    Jitendra

  10. #10
    Senior Member sudacgwb
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    Sir,

    It is heartening to note there is a proposal to effect the refund from the offices if it a small sum.

    However careful the employee is, claiming refund becomes un-avoidable whenever he opts to do some donation to organisations which qualifies for tax exemption under secion 80-G or GG.
    Govt has not authorised the DDOs to grant these exemptions. I have been getting the refunds from last 20 years, because of this!

    We have to compliment the IT dept for adopting the reforms effectively over the years. Now, as we know, we can do the e-filing online without even Form-16 and one hand and view the tax deducted in the offices and credited to IT department.

    Regards

    ss

  11. #11
    Senior Member vnatarajan is on a distinguished road
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    Dear All

    Another grey area is the Forms 15G/ 15H which are furnished to the POs/ Banks/ Financial Institutions by the senior citizens / plus 65 yrs individuals etc for TDS exemptions under the various provisions of the IT act.

    In spite of submitting such forms, tax dedustions are made either by not informing the concerned investors/ individuals well in time for submission of the forms in advance or in some cases, WRONGLY deducting the tax even if the Forms had been submitted in time.

    Consequently, the suffering individuals have to get the refuld through submission of returns and in many cases of very old/ senior citizens etc who have no PAN, this has become an ordeal and more often than not, the amount is forfieted without claiming!.

    Last year it happened to me under the SCSS ain spite of my submitting the Form and having left with no alternatives, I have claimed for the refund through my return.

    This year also the PO has bungled- and this time I did not spare them- and today- they have promised to check up ant try to reverse!.

    The PO had been maintaining that there may not be provisions for reversal - but I was sure as one of the Banks/ MFs did reverse and give me the wrongly deducted taxes on Interests.

    I tried to chk up where to get the relevant infor.

    IT IS INTERESTING TO NOTE THAT THIS MATTER HAD BEEN DEBATED IN PARLIAMENT in 2006 ( roughly) and the extracts of the recorded proceedings are:

    ---------------------------------------------------------------------------

    Q.No.126

    SHRIMATI N.P. DURGA: Sir, this is one of the successful Schemes because it gives the highest rate of interest, and last year, it has mobilised Rs.15,000 crores as deposits. Sir, in all the schemes applicable for senior citizens, the maximum age limit prescribed is 60 years, but when it comes to Senior Citizen Savings Scheme, the Ministry is prescribing the age limit as 65 years with a higher threshold of Rs.1,85,000/-. There have been demands for reducing the age limit, for this Scheme, to 60 years. So, I would like to know from the hon. Minister what hurdles he has to cross to reduce the age limit from 65 years to 60 years in case of men and from 60 years to 55 years in case of women.

    SHRI P. CHIDAMBARAM: Sir, this age is indicated in the Schedule to the Finance Bill which is passed by Parliament. Sixty-five years is the age indicated in the Schedule. I take note of the Member's concern. Having regard to the overall need to protect revenues, we will consider it at an appropriate time.

    SHRIMATI N.P. DURGA: Sir, my second supplementary is this. The hon. Minister has said in his reply that no change has been made since the introduction of this Scheme in 2004. But banks and post offices have already deducted the TDS in spite of giving Forms 15G and 15H. And it was only after the Ministry gave its clarification last month that the TDS had been done away with by banks and post offices. So, how is the Ministry going to repay the already deducted TDS?

    SHRI P. CHIDAMBARAM: Sir, if anyone has deducted TDS either after Form 15G or 15H is being given, that is wrong. They will rectify it in the next quarter when they account for the interest that is payable on the deposits. And we have already told them that if 15G and 15H are given,
    -----------------------------------------------------------------------------------

    Where to find further info/ orders that ensued following this? Search- Search- Search----
    vnatarajan

  12. #12
    Senior Member G.Ramdas is on a distinguished road
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    Dear VN and friends,

    This is a serious matter as recovery thro' tax refund route is quite cumbersome and really unwarranted.
    Recently a friend of mine informed me that one of the leading Finance company of Chennai had deducted the tax at the beginning of this financial year, against monthly interest as production of form 15G was delayed by a few days. However, the company has assured him that this will be adjusted in next month's interest.
    But there has to be some provision for the institution to refund the money wrongly deducted, without the client being compelled to ask for tax refund

    G.Ramdas

  13. #13
    Senior Member G.Ramdas is on a distinguished road
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    Default Income Tax return Forms for this year

    Dear Friends,
    The Income tax dept. has notified the new I.T forms ITR 1 AND ITR 2for the assessment year 2009-10. the forms are available for downloading in the I.T department's website

    http://www.incometaxindia.gov.in/download_all.asp
    You will get confused if you go strictly by the matter given under the column heading. Just ignore it and download the form you need.
    ITR 1 is For Individuals having Income from Salary/ Pension/ family pension & Interest , whereas
    For Individuals and HUFs not having Income from Business or Profession
    ITR2 will aplly.
    There is no major change from last year's forms except that in ITR2 in the case of short term capital gains under section 111A the rate of taxation has been changed to 15%

    GR

  14. #14
    Senior Member sudacgwb
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    Dear Ramdas,

    The tax that will be deducted at source unless the declaration (15-G) is given is only advance tax and not the absolute tax. This amount can be used to show credit while submitting the Tax Returns and tax adjusted. If the liability was not there to deduct the tax at source, then it is mandatory to give the relevent declaration in time. In case of cumulative interest scheme of deposits, the declaration can be given before the end of the financial year.

    Even the tax in respect of arrears, 2nd installment, will be duducted by DDO unless the official gives his calculations and seek higer deduction or no deduction!

    ss

  15. #15
    Senior Member G.Ramdas is on a distinguished road
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    Quote Originally Posted by sudacgwb View Post
    Dear Ramdas,

    The tax that will be deducted at source unless the declaration (15-G) is given is only advance tax and not the absolute tax. This amount can be used to show credit while submitting the Tax Returns and tax adjusted. If the liability was not there to deduct the tax at source, then it is mandatory to give the relevent declaration in time. In case of cumulative interest scheme of deposits, the declaration can be given before the end of the financial year.

    Even the tax in respect of arrears, 2nd installment, will be duducted by DDO unless the official gives his calculations and seek higer deduction or no deduction!

    ss

    I do not know why this is addressed to me.
    In any case this does not answer my query in my post above viz., "But there has to be some provision for the institution to refund the money wrongly deducted, without the client being compelled to ask for tax refund"
    GR

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