Readers' Corner: Taxation

I am salaried and also do some freelance work on the side. In assessment year (AY) 2016 I filed returns income tax under presumptive taxation scheme (PTS). In AY 2017 my chartered accountant told me that it was incorrect to file it under as my income was high from freelance work. He said thatI would be classified as a professional as I have also done my graduation and post-graduation in that vocation. He filed my returns as a professional. But in the financial year 2017, I only have salaried income. Should I be filing my tax returns using ITR 1 now? Is it a problem that I have changed ITR forms for three consecutive years?  

As per recently introduced income tax return forms for the year 2016-17, an individual having income from salaries, one house property, other sources (interest etc.) and having total income up to Rs 50 lakh can use ITR 1. But, this form cannot be used by a resident Indian who has any asset located outside India or any income from any source outside India or where person has any carried forward loss form house property or capital gains. Since you have mentioned that for the FY 2016-17, you only have salary income, you can opt to use ITR 1 provided you also meet the other criteria as discussed above. There should not be any problem so long as as you are using the correct applicable form. 

Please note that there is a requirement of intimating the assessing officer under section 176 of the Income-tax Act, 1961 ( Act) , where you discontinue any business or profession and such intimation is required to be given within 15 days of discontinuance. As per section 2(36) of the Act, profession includes vocation.

I got a notice for outstanding tax demand that I paid. Later, I received an email saying that I still have an outstanding. I filed a grievance and uploaded my challan. I have received a response that says: “Dear Taxpayer, payment details of self-assessment tax were not entered in Schedule IT or tax payment while filing the return. Request you to fill the same and file online rectification.” What am I supposed to do now? How do I file for online rectification? Is the letter asking me to revise my returns? I don’t think I can revise my returns as I filed them after a year.

Given that you have already made the payment of the outstanding demand and also have the copy of challan in your record, it will be a simple process to file an online rectification and intimate the department about the payment of the demand. Please log in to your income tax online account and click tab “e-file” located on top row of the page. Once you click there, you will have a drop down menu, select “Response to outstanding demand.” It will ask for your PAN details and once you submit the same, you will see a table of details of your outstanding demand. You will be able to view  the year, section reference, demand identification number, date of raising demand, amount of demand, rectification rights, response etc. On the right hand side of the table, please select “Submit” under response section. Thereafter, you have to select “Demand is incorrect”. A pop up will be displayed giving a list of reasons for disagreement. You can select the option of “Demand paid” and submit the response. A success screen will be displayed with transaction ID.

After few days of the submission, you can login again and follow the steps. Once you reach the table showing details of your demand, click on “View” and the details of response submitted will be shown to you. The details such as Transaction ID, date of response, response type will be shown. You can click on the hyper link of transaction ID and to know the progress of the rectification filed. In case of any queries you can also contact the department over telephone at the number mentioned on the portal.
 

The  writer is partner and leader, Personal Tax, PwC India. The views expressed are the expert’s own. Send your queries to yourmoney@bsmail.in