Interest fee

PAN card must be returned by TDS, late fees apply if not filed by deadline

I am a salaried person. Full tax was deducted from my wage income by my employer. I was unable to file my tax return for the 2021-2022 fiscal year by July 31. What must I do now ?

In accordance with the provisions of the tax laws, there are two dates for filing your income tax return (ITR). One is the due date and the other is the last date. July 31, 2022 was the due date by which you should have filed your ITR for FY 21-22, as there are various benefits available if you file your ITR by the due date. For example, you are allowed to carry forward any loss that cannot be offset in the same year to be deducted from your future income only if you file your ITR by the due date.

The deadline is the date beyond which you cannot file your ITR. December 31, 2022 is the last date you can still file your ITR, which you could not do on the due date, i.e. July 31, 2022. Now you may need to pay interest for late filing your ITR if you file your ITR after the due date but before the last date. You will also be obligated to pay a late filing fee of five thousand rupees when filing the ITR on the last date if your taxable income exceeded five lakhs. However, the mandatory late filing fee should not exceed one thousand rupees if your taxable income is less than five lakhs.

My brother, who is an NRI, has an NRE (Non-Resident External) account in India. The bank recommended that he take out a life insurance policy from their sister company, which my brother accepted. My brother does not have a PAN card (Permanent Account Number). After a mandatory five-year lock-up period, my brother waived the policy and received the money from the insurance company after tax deduction on July 4, 2022. After contacting the insurance company, we were informed that the tax had been deducted. according to the rules and advised us to file his ITR to claim the refund of the tax deducted. Now my brother has asked for a PAN card. How do we request a refund of the tax deducted?

It looks like your brother was wrongfully sold to an ULIP police. Since the insurance company deducted the tax on it, it appears at first glance that the insurance policy proceeds received by your brother are taxable. For the tax deducted, your brother will get the credit if he has a PAN and the same was mentioned by the insurance company when filing his TDS (tax withheld at source) return. Since your brother does not have a PAN, the insurance company must have filed their TDS statement without your brother’s PAN. Thus, your brother will not get credit for the tax deducted unless your brother’s PAN is updated in the records of the Income Tax Department with respect to the tax so deducted by the insurance company. Once your brother has received his PAN, he should provide it to the insurance company and ask them to revise the TDS statement with his PAN. Once the same has been done, the TDS will reflect in its form No. 26AS/AIS (Annual Information Statement). The tax having been deducted during the current year, your brother will have to produce his ITR to claim the reimbursement of the TDS after the end of the 22-23 financial year.

The author is a tax and investment expert.
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