[binand]

Originally Posted by WindRide

I wish to open FDs in my wife's name by transferring part of my earnings [...]

She is not working and has no other source of income.

Is there any problems doing such investments?

I think you should ask a professional; I don't think you will be able to save any tax because clubbing provisions will apply - based on what you say.

[Thad E Ginathom]

I think you should ask a professional

At least three such professionals have told me that no, we can't escape the tax by me "giving" money to wife to invest.

[rdst_1]

If you gift her the money, then clubbing of income under section 64 of the IT Act comes into play.

https://m.businesstoday.in/story/inv.../1/185689.html

I was thinking of being creative and paying a salary instead of gifting but that would definitely invite scrutiny and it would depend on the IT officer handling the case whether they would allow it or not.
One could definitely present a case that a wife can easily be paid for services rendered as would an employee in case a person was not married or if the wife was working.
But all this is just a hypothesis dreamt up by me at this point.

[binand]

Originally Posted by rdst_1

I was thinking of being creative and paying a salary instead of gifting but that would definitely invite scrutiny and it would depend on the IT officer handling the case whether they would allow it or not.

Sorry, clubbing provisions (section 64) explicitly says that "salary, commission, fees or remuneration" paid by one spouse to another is to be clubbed under the section. The taxman has seen/heard it all already. :-)

[rdst_1]

Originally Posted by binand

Sorry, clubbing provisions (section 64) explicitly says that "salary, commission, fees or remuneration" paid by one spouse to another is to be clubbed under the section. The taxman has seen/heard it all already. :-)

That is why I was talking of being creative. :P
If a guy is running a business, then it can be achieved easily.

[binand]

Originally Posted by rdst_1

If a guy is running a business, then it can be achieved easily.

Seriously man, you need to read section 64. The taxman has thought of that too. Salary paid to your spouse from a company in which you hold controlling interest also invites clubbing provisions.

[rdst_1]

Originally Posted by binand

Seriously man, you need to read section 64. The taxman has thought of that too. Salary paid to your spouse from a company in which you hold controlling interest also invites clubbing provisions.

It definitely does.
But there are also provisions to pay appropriate remuneration to your family members if they hold a qualification for the post and are actually helping you in the business.
Like, shopkeepers can pay their wife/child pay for manning the counter. It can't be extravagant but it's not that it can't be done at all.
Same would be true for a legal post in a company if one's wife would be a lawyer.

P. S. - I'm not a CA. My source are just various articles available online.

[binand]

Originally Posted by rdst_1

But there are also provisions to pay appropriate remuneration to your family members if they hold a qualification for the post and are actually helping you in the business.

The problem here is that such arrangements attract related party transaction and arm's length provisions and hence the taxman subjects them to extreme scrutiny; so most auditors would advise one to avoid such arrangements.

In the example you cited - if the wife is employed as a legal officer, then she cannot claim remuneration substantially more than what lawyers employed in other comparable firms earn.

Basically the hassle the taxman can create in such cases is so much that most entrepreneurs don't do it at all, or adhere to the clubbing provisions. Definitely not the course of action a prudent salary earner would want to choose.

[PGA]

I have received intimation under 143(1)(a) for discrepancy between my filed return and Form 26A amounting to Rs 5500/- under OS section.

I have rechecked my Form 26 A, and I am unable to locate this discrepancy. My filed return is in accordance with the Form 26 A.

I am a salaried individual and was wondering if I should argue against it or just agree to their contention as the amount is small and will hardly make a difference in tax liability.

Please advise

Regards

[Gokrish]

Originally Posted by PGA

I have received intimation under 143(1)(a) for discrepancy between my filed return and Form 26A amounting to Rs 5500/- under OS section.



Please advise



Regards

Do you receive any Pension from your previous employer? Or did you declare any other income in the ITR? If yes, please check the computation on these heads and compare it with the actual TDS

[binand]

Originally Posted by PGA

I have received intimation under 143(1)(a) for discrepancy between my filed return and Form 26A amounting to Rs 5500/- under OS section.

I have rechecked my Form 26 A, and I am unable to locate this discrepancy. My filed return is in accordance with the Form 26 A.

I also received this. The discrepancy in my case is that I filled "income chargeable under the head salaries" in my form 16 under "salary". I should have filled the gross salary and shown all exemptions too. Need to refile I guess.

[NPV]

Originally Posted by PGA

I have received intimation under 143(1)(a) for discrepancy between my filed return and Form 26A amounting to Rs 5500/- under OS section.

I have rechecked my Form 26 A, and I am unable to locate this discrepancy. My filed return is in accordance with the Form 26 A.

Please check if the Gross salary reported in your Form 16 and Form 26AS are the same (the employer is the one generating the Form 16 for you and also reporting on the Form 26AS). Though rare, there could be a discrepancy between them. Your filed return will usually be based on the Form 16 you received from the employer.

[hothatchaway]

^^^I have also received a similar notice (guess its that day of the year when they send out discrepancy notices!) where they have pointed out a difference between what was recorded on 26AS and the return I filed. In my case, the amount = exemptions u/s 10 namely HRA, LTA, conveyance and leave encashment. The Form 16 issued by my employer had the gross amount as also the net, minus the section 10 exemptions. It has been almost a year since I filed (IIRC I used an intermediary) and while it would have been logical to enter the gross amount and then the exemptions, I think I was not able to locate the fields for the section 10 entries (all the other fields including 80C etc were there)

The notice email has instructions on how to submit a response, yet to look through that. I believe one should enter the amount net of section 10 in "income chargeable under the head salaries" field. Can someone comment?

[Rocky_Balboa]

Originally Posted by PGA

I have received intimation under 143(1)(a) for discrepancy between my filed return and Form 26A amounting to Rs 5500/- under OS section.

I have rechecked my Form 26 A, and I am unable to locate this discrepancy. My filed return is in accordance with the Form 26 A.

I am a salaried individual and was wondering if I should argue against it or just agree to their contention as the amount is small and will hardly make a difference in tax liability.

Please advise

Regards

I had the same notice and it was to do with the interest I received from my various bank accounts which ran in 5 digits. I used Challan ITNS 280 with 021 (income other than companies), to submit the changes after discussion with a CA.

[redcruiser]

I have received this as taken up for processing and on verification it was found that it contains arithmetical errors/ incorrect claims/ inconsistencies with respect to Audit Report /Form 26AS and the same is indicated in the table annexed.

The amount is 2400 (professional tax 200*12) which I had deducted and filled in salary sheet.
What should be my next course of action ?
1. Should I reply them?
2. Or should I refile the return? If yes in which section should I include this professional tax in ITR-2?