TDS, or tax deducted at supply, is finished on the time of constructing sure funds, akin to curiosity on financial institution deposits, wage, hire, and so forth, which could be claimed as refund by taxpayers if their last tax legal responsibility involves be decrease than the tax they’ve already paid by TDS. The Income Tax (IT) guidelines say that if the due date to file the Income Tax Return (ITR) has lapsed, taxpayers can’t declare a TDS refund.
However, there are particular exceptions. The IT regulation offers a window below part 119(2)(b) to assert a TDS refund, exemption, deduction or another reduction below the Act. The part empowers Central Board of Direct Taxes (CBDT) to direct revenue tax authorities to permit any such declare even after the expiry of on a regular basis limits to file the ITR. However, such claims might be allowed provided that the non-compliance was as a result of the taxpayer confronted real hardship.
Considering the powers of part 119, round no. 9/2015 was issued by CBDT prescribing the rules and threshold restrict of varied authorities to entertain the declare of refund. According to the round, Principal Commissioners or commissioners of Income tax are assigned with the powers of acceptance or rejection of claims when the declare quantity is as much as ₹10 lakh for one evaluation 12 months. Similarly, the Principal Chief Commissioner of Income Tax is assigned with powers to entertain a declare between ₹10 lakh to ₹50 lakh. CBDT will solely think about the declare above ₹50 lakh.
Any taxpayer, whether or not a person, firm, belief, HUF, and so forth. to whom PAN is issued and fulfils the above-mentioned circumstances can file a declare.
The taxpayer can train this provision and file a declare in case of extra fee of revenue tax, if the eligible loss was not carried ahead, or in case the courtroom points any orders in favour of the taxpayer. The extra tax fee arises in a state of affairs the place it’s paid on exempt revenue, or the eligible deduction just isn’t claimed on the time of submitting ITR. Taxpayers may file a declare on deducted TDS below part 119 even when they didn’t file ITR as their taxable revenue didn’t exceed the fundamental exemption restrict of ₹2.5 lakh ( ₹3 lakh for senior residents).
Let us perceive this with an instance. Suppose, A is a senior citizen and his tax was deducted on curiosity acquired from mounted deposits. He couldn’t file ITR on time as a result of poor well being circumstances, and missed all of the deadlines. In this state of affairs, A can file a declare for a TDS refund earlier than the related authorities.
In different phrases, below this part, a taxpayer can apply for any advantage of the IT regulation that’s out there however couldn’t be availed as a result of some unavoidable circumstances.
How to file a declare
The taxpayer is required to organize a guide utility addressing the related jurisdictional authorities. There is not any prescribed format of utility. However, it’s a condonation request by the taxpayer to permit the submitting of declare and ITR after the due dates. The utility ought to describe the circumstances as a result of which she couldn’t make well timed compliance due to ‘genuine hardship’. The utility ought to have related proof to assist the explanation for not submitting ITR inside the due date.
If additional info might be required on the matter, then a discover might be issued to the taxpayer by the taxman. The particulars of such discover issued might be out there below the ‘pending actions’ tab of the Income Tax portal. If the appliance is accepted, the ITR should be filed on-line below part 119(2) within the ‘e-filing’ tab of the Income Tax Portal. If the appliance is rejected, the taxpayer can file a writ petition earlier than the High Court.
The Income Tax portal additionally offers a facility for submitting a declare by a web-based ‘condonation request’ out there below the ‘Services’ tab of the portal. As per the person guide, the taxpayer is required to pick the ‘Allow ITR filing after time-barred’ tab after choosing the ‘condonation request’ tab. However, that tab just isn’t but up to date on the portal.
Time restrict
Condonation for claims for any evaluation 12 months could be filed as much as six years from the tip of the related evaluation 12 months. For occasion, if a personnel of the Indian Armed Forces, paid tax on exempt incapacity pension acquired for the evaluation 12 months 2020-21, then the declare for extra tax paid could be filed until AY 2026-27 i.e. by 31 March 2027.
Keval Sonecha is a associate at Sonecha & Amlani.
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