[civic-sense]

I helped a friend file his tax. Since he hadn't submitted his rent receipts (HRA) to his employer, I deducted that amount from the total income in the tax return, as advised in some website.

He has now got a notice saying that there is a difference between the income in form 26AS and income claimed in the return, and has asked to file a revised return. See below:

Please advise how HRA could be claimed in this case.

[binand]

Originally Posted by civic-sense

I helped a friend file his tax. Since he hadn't submitted his rent receipts (HRA) to his employer, I deducted that amount from the total income in the tax return, as advised in some website.

He has now got a notice saying that there is a difference between the income in form 26AS and income claimed in the return, and has asked to file a revised return.

From what I understand, HRA exemption is a benefit meant only for salaried people. The onus of verifying the claim under this section is on the employer. If the employer is unable to verify it because you did not submit the supporting documents on time, then you cannot claim it. Your friend is SOL, and should re-file taking out the exemption claim and paying any tax due with penalty.

Serves you right for reading on "some website" and filing tax. :-)

Same goes for LTA. The employer's auditors actually verify that these claims are correct and dealt with properly (no scams, that is).

[hothatchaway]

LTA is an allowance and has to be claimed through the employer, whereas HRA is an exemption and can be claimed while filling returns if it was missed out via the employer. Of course, it's conditional to the employee actually receiving HRA and paying rent. It's possible that the OP didn't account for it u/s 10 leading to the discrepancy between the gross income in 26AS and taxable income shown in ITR.

@civic sense, the ITD notice should contain a link where your friend should be able to account for the differences. If not, a CA can be engaged to file a revised return.

[vrprabhu]

hothatchaway is right - LTA has to be claimed from the employer submitting evidence that the 'allowance' is actually 'reimbursement' for expenses incurred on leave travel.

As regards the HRA issue, could it be a simple mistake done at the time of preparing (filing) the return - i.e. the amount of HRA should be reported under income and the deduction claimed on the basis of the maximum amount allowable as per formula provided in the tax laws (lower of actual received, actual rent paid or 10% of pay etc.)? Wrong filling up of HRA amount in the ITR form could result in a mismatch between 26AS and return filed.

[civic-sense]

Originally Posted by binand

From what I understand, HRA exemption is a benefit meant only for salaried people.

Originally Posted by hothatchaway

@civic sense, the ITD notice should contain a link where your friend should be able to account for the differences. If not, a CA can be engaged to file a revised return.

Originally Posted by vrprabhu

As regards the HRA issue, could it be a simple mistake done at the time of preparing (filing) the return

Thanks guys.

The mismatch is between the salary mentioned in the return and the same reported in 26AS. That was because I foolishly deducted HRA from the gross salary in the return filed.

I finally figured out where HRA could be claimed. Its tucked in here inside this dropdown:



I had missed this earlier.

The notice has advised to file a revised return. So, I will refile after checking with my friend whether he still trusts me with it.

[pramodkumar]

Hi All,

I have received this message that my ITR was processed, i received this message last week and its been almost 8 days and the amount has not been credited to by account. Below is the status on the efiling website.




What should I be doing next?

Pramod

[vrprabhu]

Just check the status of refund in NSDL - it should mostly reflect the status as "sent to refund bank for processing".

Amount should get credited to the Bank account given in ITR by next week.

[pramodkumar]

Originally Posted by vrprabhu

Just check the status of refund in NSDL - it should mostly be sent to refund bank for processing.

Originally Posted by vrprabhu

Just check the status of refund in NSDL - it should mostly reflect the status as "sent to refund bank for processing".

Its weird that the NSDL website says my PAN is invalid, intermittently it once showed the present status which was same as the e-filing website. Strange, I know. This is the first time it has been delayed this far, in previous years it used to be credited in a day or two from the time I receive the SMS

Pramod

[smnrock]

Originally Posted by pramodkumar

This is the first time it has been delayed this far, in previous years it used to be credited in a day or two from the time I receive the SMS

Pramod

It took 17 days for me in this year. Order date was 21st Aug and refund in bank was on 7th Sep.

[pramodkumar]

Originally Posted by smnrock

It took 17 days for me in this year. Order date was 21st Aug and refund in bank was on 7th Sep.

simply crazy I am not sure how they will calculate the interests on the days it gets delayed post processing the returns.

pramod

[vrprabhu]

Simple! They don't pay you interest - it is calculated only till the date of order

[saurabh2711]

Hello Gurus,

I have received a recovery notice for my wife for AY 2007-08. Amount is around 10K.
We have browsed the history of our income tax filings & we have found an acknowledgement for the said Assessment year. The total tax filed was around 8K & have to pay additional 10K against the recovery notice..

The problem is - I am unable to find the Form16 for that year. Request your pointers to understand where can it find it online, as it is not in my records. Employer has requested 45 days & time to respond to this notice is 30 days.

They have kept the refund for this year on hold & stated that if we do not respond, they will deduct this recovery amount form the current year's refund & credit it.

I am thinking of responding to it on website by selecting the option as "demand is not correct but ready for adjustments". Simply for the fact that I am in Pune & Assessing officer is marked as Ujjain (MP) - Her permanent address at that point. If I go there & come back after closing this will cost me nearly the same. No point wasting time & money.

Any other way to sort this out, please suggest.

Regards,

[vrprabhu]

Two things can be done -

a. Opt for an 'e-assessment' - there is no need to travel to Ujjain, as the documents can be upload in the IT portal itself.

b. Submit an interim reply and request for more time to furnish the Form 16. Normally, assessment prior to seven years cannot be re-opened unless there is a likelihood of income suppression.

Just say that demand is incorrect and that you will submit all the documents as proof of the IT return already filed for that year.

[sgiitk]

Originally Posted by civic-sense

I helped a friend file his tax. Since he hadn't submitted his rent receipts (HRA) to his employer, I deducted that amount from the total income in the tax return, as advised in some website.

He has now got a notice saying that there is a difference between the income in form 26AS and income claimed in the return, and has asked to file a revised return.

afaik 26AS is God Almighty to the taxman. No deviation is permissible. So be careful.

[rajesh1868]

Few months back, my late father's demat account was transferred to me. What are the tax implications of this for me? I haven't done any transactions yet on those shares and it was in that account for at least 4 years.

1) Is there a tax to be paid for the transfer, on the total worth of security?
2) Will I have to pay tax if i sell something (even if it is a loss considering the purchase price)?

Pardon me if I sound naive,
3) If I sell and keep the amount in the demat account itself (so that I can buy on an opportunity), is there a tax implication or does it come only when i transfer the money to my bank account?