socially backward (Social worker) 14 August 2017

Income Tax matters

While e filing I Tax matter following form 16 provided by the deductor, exemption was claimed - of RS 150000u/s 80C along with interest from Savings accounts which is less than Rs 10000 u/s 80TTA by one employee under chapter VI A. Now,I Tax Department,in a communication wanted to club the interest income with taxable income and wanted to know whether the employee agrees/disagrees,supported by reference documents. But why they are doing so,and what should be the reply. Kindly reply.

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4 Replies

(Guest)

Did the employee Declare 80 TTA 10,000 ?

80TTA is an exemption on Interest earned on Saving Bank account during whole of the AY. SO please check with the employee if he really has Rs 10,000 earned as Interest by keeping money in SB Account.

IT department has access to all Bank accounts by virtue of PAN card and they have Intelligence tools which point out suspicious transactions.

Please confirm with the employee, if he has earned 10K as SB interest then revert back to IT Dept with copy of SB Passbook

socially backward (Social worker) 14 August 2017

The employee had declared less than Rs 10000 as SB interest.IT department asked for error rectification,revised return as they had stated that discrepancy had been noted in form 16 and return regarding taxable income,where this SB interest is in question.But,on checking both the things,it is clear that the interest was quoted s 80 TTA in both papers.So,where is the problem? Please advise.

(Guest)

Strange !!!! 1 problem that i can think is that check what has the employee mentioned in "Income from other sources". Technically, he has to declare all the interest earned from Interest first in "Income from other source" and then has to take exemption of 10,000 in the col 80TTA under chapter 7 which is Intrest earned from SB account.

Otherwise, revert back to IT dept with xerox copy of passbook stating that the declation and actuals are correct.