[vnabhi]

I got an intimation under Sec 143(1) a couple of days ago, and it looks like me refund is under process.

I had filed ITR2 online in June last week, but forgot to eVerify it. I did that around the last week of July.

My wife got her refund in the first week of August itself. I had filed her ITR1 online in June, along with mine.

[carboy]

Originally Posted by binand

The repetition is after incorporation of new information. As I said, it all depends on the level of sophistication that the company's payroll system uses.

Thank you. Another question - what about investment proof - at the beginning of the year (Apr), if I had submitted a declaration of intended investment to the Company A so that they can estimate taxes - when do I need to submit proof to them. I worked there only from April to August - normally people submit proof in Jan 2019 - but if my last month is Aug, when do I submit proof to them?

[binand]

Originally Posted by carboy

at the beginning of the year (Apr), if I had submitted a declaration of intended investment to the Company A so that they can estimate taxes - when do I need to submit proof to them.

I think you are asking about a specific company; in which case it is best you ask the people who are in charge of creating and implementing policies in this area within that company.

[carboy]

Originally Posted by binand

I think you are asking about a specific company; in which case it is best you ask the people who are in charge of creating and implementing policies in this area within that company.

What is the general policy in this kind of stuff? I am sure it happens all the time. Also if they are mandated by the govt to follow a particular process?

[binand]

Originally Posted by carboy

What is the general policy in this kind of stuff? I am sure it happens all the time. Also if they are mandated by the govt to follow a particular process?

We are going around in circles. It might be a better idea if you were to frame your question as "I was working for A Pvt. Ltd. between April and August; I did X; they did Y; now what are my options to recover?".

There is no government mandated process. Each company implements what is convenient to them often based on the level of sophistication their payroll system and HRMS is at. Government does not micromanage company operations like that.

These things do happen/are mandated:

1. You are expected to pay 40% of your total tax liability to the government by September 15, 70% by December 15 and 100% by March 15. If that doesn't happen you are charged interest. Therefore it is in your interest to report all your income to your employer who then calculates tax due from you and arranges to pay to the government by those dates. Else you need to do this calculation yourself and pay the tax which is quite a hassle.

2. Employers are required to compute tax on total income reported by employees and do TDS; and remit the amount to the government (as per schedule above). They have access to the salary income, so they will do it for that. All other income needs to be reported to them. They can facilitate this but not mandate.

3. There are certain kinds of deductions only the employer is allowed to verify and apply. Things like LTA, medical reimbursement etc. If you don't report these to the employer within time they might not consider these and you have no recourse (you can't apply these yourself in your tax return).

[carboy]

Originally Posted by binand

We are going around in circles. It might be a better idea if you were to frame your question as "I was working for A Pvt. Ltd. between April and August; I did X; they did Y; now what are my options to recover?".

First of this, this is not about me. It's about a cousin. He worked in a really small firm & the firm is also confused about what to do. And his Aug salary hasn't been given yet, so we are trying to figure out if they need to cut taxes are not & if they should ask for his investment proofs now.

My cousin may not work for the next 4-5 months. So he doesn't want excess tax cut & he does not have the investment proofs now & he will do it in 2019 before the end of the financial year.

So, thank you for your answers.

[RaguHolla]

Originally Posted by carboy

What is the general policy in this kind of stuff? I am sure it happens all the time. Also if they are mandated by the govt to follow a particular process?

Full and Final settlement is always based on actual (IT rule). Usually companies need to ask employees if he can produce actual before final settlement calculated. However the process of asking for actual before final settlement not mandatory by law, and as an employee you need to take responsibility to provide one! Organization cannot refuse actual while calculating final settlement if provided by employee. I encourage you to talk to your payroll team about if you have actual.

Assuming that you will get 2.5 lakhs benefit (0% tax bracket, total income is only month worked), typically it works out the same (without giving proof; only 80C considered). Unless of course you have huge Leave allowance, accumulated LTA and Gratuity in final settlement, which will increase your income.

[NPV]

Originally Posted by RaguHolla

Unless of course you have huge Leave allowance, accumulated LTA and Gratuity in final settlement, which will increase your income.

Gratuity is exempt from Income Tax upto 20 lakhs (it was earlier 10 lakhs).

[binand]

Originally Posted by carboy

so we are trying to figure out if they need to cut taxes are not & if they should ask for his investment proofs now.

My cousin may not work for the next 4-5 months. So he doesn't want excess tax cut & he does not have the investment proofs now & he will do it in 2019 before the end of the financial year.

That is so much clearer.

For the employer, the responsibility ends after ensuring 40% of the tax due on the total income of the employee known to them (which includes salary income and any other income reported by the employee) is remitted to the government. Their August TDS amount will be dependent solely on this consideration.

As for deductions, they should consider only the ones for which they have proof, and accrued during the period your cousin was working for them. Not based on "will do this by end of year". That is, even if your cousin was relieved on 31/8 and the investment was done on 3/9, they ought to reject it.

Your cousin should make the investments as per his convenience and then file his IT return on time so that he can claim refund on the excess tax deducted.

[sasi@8689]

Originally Posted by binand

That is so much clearer.

For the employer, the responsibility ends after ensuring 40% of the tax due on the total income of the employee known to them (which includes salary income and any other income reported by the employee) is remitted to the government. Their August TDS amount will be dependent solely on this consideration....................

This is not correct. While running payroll for the last month, the company would have to deduct full amount of tax that is payable on the total income computed till that month. The total income would be the salary and other benefits like leave encashment etc accrued or paid till the last day and any other income that is reported by the employee

40% of estimated tax payable is only for the purpose of remittance of advance tax; TDS on salary is always deducted on average basis i.e., estimated total tax on estimated total income for the year that is deducted over the remaining months of the year and in the case of resigned employees, total tax due on the salary income till the last day would need to be deducted from the last payroll

[binand]

Originally Posted by sasi@8689

This is not correct. While running payroll for the last month, the company would have to deduct full amount of tax that is payable on the total income computed till that month.

You are right. The quoted sentence didn't come out the way I intended it to. What I meant to say is that the employer has no obligation to factor in any future income you might earn after leaving their employment.

[theMandarin]

It would be really helpful if someone can help me out on this. I have searched on this thread and multiple places online but still can’t seem to get a clear understanding of the tax implications.

I went overseas for my first offshore deputation in the previous year starting November and have been living outside India since then. Based on what I gathered so far, I am technically a 'Resident' for the previous financial year[2017-18] as I was within India for more than 182 days. This means that the income I have earned overseas will be taxed.

Until March 2018, my employer had been deducting TDS on the Indian salary component as per my liability but not on the allowance received overseas which is also credited directly in a foreign bank account in the country of deputation. To clarify, both the base Indian salary and the allowance was credited in the overseas account but tax was deducted(and credited to govt) only against the Indian component.

I can also see that there is a tax deducted in the salary slips for the foreign account against the allowance as well.

• Will I have to pay tax twice now, i.e. once as the TDS deducted while on deputation and then again on submitting the returns in India for FY2017-18 ?
• As I am still on deputation, I will likely exceed the 182 days limit. Is it correct that I will be regarded as a NRI for the current financial year?
• I read that there is an agreement to avoid double taxation like this. How can I compute or factor in this deduction to determine my correct tax liability?

Hoping you can shed some light on this!
I am sure some of the members must have been in this situation.

[binand]

Originally Posted by theMandarin

• Will I have to pay tax twice now, i.e. once as the TDS deducted while on deputation and then again on submitting the returns in India for FY2017-18 ?
• As I am still on deputation, I will likely exceed the 182 days limit. Is it correct that I will be regarded as a NRI for the current financial year?
• I read that there is an agreement to avoid double taxation like this. How can I compute or factor in this deduction to determine my correct tax liability?

You need to mention the country where you are in.

If it is a country with a DTAA (Double Taxation Avoidance Agreement) with India, then you don't have to pay tax for income that is already taxed in that country, in general. Each DTAA is different though.

Even if it is a country without a DTAA, you will probably get credit for tax paid there when computing the tax liability here (again, with conditions).

You don't become an NRI just because you spent 183 days outside India. You have to do that for many years (4, I think). Also note that it is 183, not 182.

The moment you start earning from outside India you require individualised assistance by a qualified professional; it is best you locate one such and take their help.

[pramodkumar]

Its now officially 3 months since I filed my returns. Asked my CA to check several times if all details were filed perfectly, every time I get to know that its under process.



This is the message I get when I see my refund status. All others who paid days later through the same CA got their refunds, The amount is above 70K, presently that is speculated as the cause for the delay. Should I do something? My CA had called the CPC to find out if all is well, they said its not processed yet and expect it in 10 days, that was last Wednesday. Should I do something?

Loosing above 200K to tax in a year with proper investments is a big blow for people who are salaried. Its like not getting paid for couple of months because government takes your paycheque, Then you get taxed for every singe thing you buy , "End of Rant"

Pramod

[theMandarin]

Originally Posted by binand

You need to mention the country where you are in.

If it is a country with a DTAA (Double Taxation Avoidance Agreement) with India, then you don't have to pay tax for income that is already taxed in that country, in general. Each DTAA is different though.

The moment you start earning from outside India you require individualised assistance by a qualified professional; it is best you locate one such and take their help.

Thank you for your inputs.

Well the country in question is Germany and i believe it does have a DTAA with India.

Logically speaking, the goal of this agreement is to avoid being taxed twice for the same amount but then on reading further it seems that we still have to factor in the overseas income as part of tax calculation and a partial credit is given. Doesn't this defeat the purpose of the agreement altogether ?

I have asked many of my colleagues about this who were quick to dismiss any implications of overseas income as part of tax liability but i am not sure if it is their ignorance or stupidity.


I noticed that the Form 16 issued by my employer does not account for the foreign allowance although my Indian salary component was also deposited in the overseas account. Can i assume that if it is not accounted for in Form 16, it is not taxable?


Regarding the NRI status, i think it applies because i left India for employment which is covered as special case to the 4 year/60 day rule that you stated but i will check again.