Tax Query Income Tax Notice. Hi all, I’m new here seeking help, I had a CA before who filed my ITR incorrectly. Later, IT dept requested a response and the stupid CA said what he filed was correct, he was supposed to file ITR2 due to capital gains. Now I couldn’t refile the same ITR. Then I hired another CA who refiled it correctly writing a letter stating I filed it incorrectly and submitted letter in IT Dept. Now I got CPC Intimation attaching screenshot. Need help
It looks like you’ve received an intimation notice under section 143(1) of the Income Tax Act for the Assessment Year (AY) 2024-25, showing a tax demand of ₹84,670.
Here’s a breakdown of the situation based on the screenshot and your description, along with steps you should take:
Understanding the Intimation Notice
The screenshot shows a comparison between the details you provided in your ITR and how the Income Tax Department (ITD) has processed them.
- Amount of Demand: The notice shows a demand of ₹84,670, which is the amount you need to pay.
- Taxation Option: It says “Opting Out of New Tax Regime as per sec. 115BAC(6). This is crucial because it affects how your tax is calculated.
- Income Details: Your Total Income is shown as ₹9,04,570, which is consistent between what you provided and what the ITD has computed.
- Pre-paid Taxes: This is the most critical part of the discrepancy.
- As provided by Taxpayer: ₹1,82,370
- As Computed u/s 143(1): ₹28,339
The large difference in pre-paid taxes is the primary reason for the tax demand. The ITD has only given you credit for ₹28,339 in pre-paid taxes, whereas you claimed ₹1,82,370. The demand of ₹84,670 is calculated as:
(Tax Liability – Pre-paid Taxes – Interest & Fee) = (₹97,151 – ₹28,339 – ₹15,856) = ₹52,956. This doesn’t directly match the ₹84,670 demand. The demand of ₹84,670 seems to be: Tax Liability + Interest & Fee – Pre-paid Taxes = ₹97,151 + ₹15,856 – ₹28,339 = ₹84,668 (which is close to ₹84,670).
Why this Discrepancy Occurred
The difference in pre-paid taxes (TDS, TCS, Advance Tax) is almost always due to a mismatch between what you have claimed in your ITR and the data available in the ITD’s records (Form 26AS/AIS/TIS).
- Mismatched TDS: The most common reason is that the TAN of the deductor (the person or company who deducted the tax) or your PAN was entered incorrectly. The TDS credit does not reflect in your account.
- Unclaimed TDS: The person who deducted the tax has not yet filed their TDS return.
- Duplicate TDS Entries: You might have entered the same TDS entry twice in your return.
- Incorrect Tax Head: You might have paid advance tax under an incorrect PAN or assessment year.
Your Next Steps
- Do not panic and do not pay the demand immediately. You have a window to respond. The due date to pay the tax is shown as
31/07/2024. - Consult your current CA immediately. The new CA who refiled your return should be able to help you. The intimation notice is a direct result of the return they filed.
- Cross-Verify the Pre-paid Taxes:
- Log in to your income tax e-filing account.
- Go to e-File > Income Tax Returns > View Filed Returns.
- Download the JSON file or a copy of the ITR-V/acknowledgement for the AY 2024-25 return that was filed.
- Go to e-File > E-pay Tax and check your payment history.
- Go to Services > Annual Information Statement (AIS). In the Taxpayer Information Summary (TIS), you can see all your pre-paid taxes (TDS, TCS, Advance Tax, Self-Assessment Tax) for the year.
- The most crucial step is to compare the details of the pre-paid taxes you claimed in your return with the data available in your AIS/TIS.
- Identify the Mismatch:
- If the claimed TDS/TCS is not reflecting in your AIS/TIS, you need to find out why.
- Contact the deductor (your employer, bank, etc.) and ask them to verify if they have filed their TDS return correctly and if your PAN is correct.
- If you made any self-assessment tax payments, check if the BSR code, challan number, date of payment, and amount are correctly entered in your return and match the payment challan.
- File a Rectification Request:
- Once you have identified the mismatch, you or your CA should file a rectification request under section 154 of the Income Tax Act.
- This is not a new return; it’s a request to correct an error in the processed return.
- The rectification request will be filed against the intimation notice you received.
- The rectification request should be filed to correct the “Pre-paid Taxes” section of the return by providing the correct details of the missing TDS/TCS/tax payments.
- For example, if you claimed a TDS of ₹1.5 lakh but it’s missing from your 26AS, you need to ensure the deductor has filed the TDS return. Once they do, it will reflect in your AIS, and you can file the rectification request citing the correct details.
- Respond to the Notice: The rectification request serves as your response to the notice. You do not need to file a separate response. The ITD will process your rectification request, and if the details match their records, the demand will be reduced or reversed.
A Note on ITR2 vs ITR1
You mentioned your previous CA filed ITR1 when you should have filed ITR2 due to capital gains. This intimation is for the return filed by your new CA. The fact that the return was refiled might have been the reason for the demand. The department’s systems might be cross-referencing old and new data. However, the core issue visible in the screenshot is the discrepancy in pre-paid taxes.
Your new CA must address this immediately. The rectification process is the standard and correct way to handle such discrepancies.