TDS on Minor Income claimed in IT Return not considered by CPC

[CA. Dhvani Shah]

Dear Professional Colleagues,

One of my clients have minor son & daughter and both have a minor PAN Card. The Income of the minors are clubbed in the client's income and are filed in his return along with TDS thereon.  

While filing the client's return the respective PANs of the Minors and Income details were mentioned in the schedule of clubbed income.However, the TDS deducted on income of minors are credited to minor PANs and are also reflected in Form 26AS.

Now at the time of processing at CPC for the Assessment Year 2012-13 the TDS on the account of Minors is not allowed, thereby raising a demand to that extent, due to Tax Credit Mismatch. On applying for rectification with CPC, stating that TDS of minors has not been considered, there has been no change in Intimation u/s 143(1). Even after rectification the demand still stays due to Tax Credit mismatch. 

I would request my professional colleagues to please advice as to what step should be taken in the above case to nullify the demand.

Thanks & Regards. 

CA. Dhvani Shah

Proprietor

M/s. Dhvani & Associates

Chartered Accountants

[caabps]

Dear Mr. Shah

 

It would be better to ask the deductor to revise TDS return and credit the TDS amount to the parents account of the minor to whose income the income of minors are clubbed. In such case the TDS will be reflected in the parents 26AS and you can go for rectification.

 

Regards,

 

CA Mohammad Ayub,FCA,FCMA,DISA

Partner

M/s. ABPS & Associates,

Chartered Accountants

182, Sahid Nagar,

Bhubaneswar – 751007

Phone – 9437075232 / 9938002100

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[Biswa Ranjan Pattnaik]

Dear Sir,

Your case is covered under sub-Rule (2) of Rule 37BA which is extracted hereunder.

(2)(i) Where under any provisions of the Act, the whole or any part of the income on which tax has been deducted at source is assessable in the hands of a person other than the deductee, credit for the whole or any part of the tax deducted at source, as the case may be, shall be given to the other person and not to the deductee :

Provided that the deductee files a declaration with the deductor and the deductor reports the tax deduction in the name of the other person in the information relating to deduction of tax referred to in sub-rule (1).

(ii) The declaration filed by the deductee under clause (i) shall contain the name, address, permanent account number of the person to whom credit is to be given, payment or credit in relation to which credit is to be given and reasons for giving credit to such person.

(iii) The deductor shall issue the certificate for deduction of tax at source in the name of the person in whose name credit is shown in the information relating to deduction of tax referred to in sub-rule (1) and shall keep the declaration in his safe custody.

 

Accordingly, follow the prescribed procedure and get the TDS certificate in father’s name and also request the deductor to file the revised TDS return so the tax will be reflected in father’s name in 26AS.

 

Thanking you,

Yours faithfully,

 

Biswa Ranjan Pattnaik, FCA, LL.B,

Kar & Pattnaik,

Chartered Accountant,

N2/171, IRC Village, Nayapally,

Bhubaneswar-751015,Orissa.

Tel: 9437011066;0674-2558051