Senior Citizen, 
Tax, 
TDS
Senior Citizen, Tax, TDS

Tax On Consultancy Is Deducted At Flat 10% Irrespective Of 80C Investments

You can claim a refund on the excess tax paid after filing your income tax return. Check Form 26AS to verify tax deducted on your income. An individual is treated as a senior citizen if he/she is aged 60 years or more on the last day of the previous year
Q

I work as a consultant in a company. The company deducts tax at a flat rate of 10 per cent under Section 194J of the Income-tax Act, 1961 without taking into consideration my investments under Section 80C. What should I do to claim my investments under Section 80C?

A

Your employer is correctly deducting tax at 10 per cent without taking any cognisance to your investments under Section 80C.

Please note that the total tax deducted at source (TDS) on your income will not always be equal to your tax liability. You may either be entitled to a refund or may have to pay more taxes. In either of these situations, you should file your income tax return either to claim the tax refund or discharge you balance tax liability.

Do note that even if you are entitled to a tax refund, but your income exceeds the exemption limit, you are legally required to file your income tax return.

Q

I paid my taxes in full for the year 2020-21, but there is still an outstanding demand showing in my account on the income tax website. However, the income tax department has not sent me any notice for the same. What should I do?

A

Please verify the copy of the income tax return (ITR) filed by you. An error might have crept in while submitting it online, which was not obvious when you filed your return.

Since it is a computerised process, the probability of there being an error in the return is reasonably very high than there being an error in calculating the tax due by the income tax department. I would advise you to take the help of a professional tax advisor to sort out this problem. I would even advise you to take professional help for filing your income tax returns.

There is also a probability that the tax deducted from your income was not deposited by the deductor or the TDS returns were not filed, which has resulted in the tax credit not visible in your form no. 26AS. I would advise you to access your Form No. 26AS online to verify this aspect.

Q

I will complete 60 years of age on March 15, 2024. Will I be treated as a senior citizen for the year ending on March 31, 2024? What will be the exemption limit available for me?

A

For the purpose of income tax benefits, a person is treated as a senior citizen in case he/she is of 60 years of age or more on the last day of the previous year.

Since you will be over 60 years on March 31, 2024, you will be treated as a senior citizen for the ITR to be filed for the financial year 2023-24. The basic exemption limit for you will be Rs 3 lakh under the old tax regime. Do note that the limit is Rs 3 lakh for all individuals under both tax regimes.

The author is a tax and investment expert

(Disclaimer: Views expressed are the author’s own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.)

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