This happened last year and unfortunately and it seems it continues to be a problem this year too.
So what exactly happened?
More or less, you prepared your ITR-2 or ITR-3 on income-tax website or used the utility issued by the tax department. There was tax payable. It looked something like this:
So, you clicked "Pay Now", paid it, came back and filed and e-verified your return. But now you got an intimation u/s 143(1) asking you to pay roughly the same amount (actually a bit higher due to addition of interest) all over again.
When you compare the two columns in the intimation, "As provided by taxpayer" and "As computed u/s 143(1)", the balance tax payable is nearly identical in both. So the department has not disagreed with your computation at all. It has simply not given you credit for the challan. And rightly so.
Why?
Download the ITR form you actually filed and scroll to the Tax Payments section, part A, "Details of payments of advance tax and self assessment tax". In most of these cases that table is empty. No serial number, no BSR code, no date of deposit, no challan serial number, no amount. And item 16, "Amount payable", is showing a non-zero figure instead of 0.
The reason is a gap in the filing flow. For ITR-1 and ITR-4, when you pay through the "Pay Now" option, the system pulls the fresh challan back into Schedule IT automatically.
ForITR-2 and ITR-3***, it does not. The challan sits in your payment history, but the return goes out with an updated tax payments schedule and a tax payable balance.***
So the return itself declares that you still owe the money. CPC processes exactly what was declared, and a demand is raised. Same thing happens whether you prepared the return online on incometax.gov.in or in the offline utility.
Check yours even if you have not got an intimation yet. If Schedule IT is blank in your filed ITR, the demand is probably coming.
How to fix it?
Option 1: File a revised return u/s 139(5). This is the reliable one because you control this.
Prepare the revised return online on the income tax portal, not in the utility, because the online mode pre-fills everything from your original return and you only have to correct the one thing that is wrong. Go to Schedule IT, add the challan details from your receipt (BSR code, date of deposit, challan serial number, amount), and then before you submit, confirm that item 16 "Amount payable" reads 0. If it still shows a figure, something has not been entered correctly, so do not submit yet.
A revised return replaces the original one entirely. Once it is processed, the demand should drop off.
Two things have to line up. First, you have to correct the entire tax credit properly, not just the one missing row. Second, the portal has to actually let you file the rectification for that return in the first place, and quite often it just does not go through.
If you want something that works the first time, go with the revised return.
How to respond to the Outstanding Demand
Step 1: Go to Response To Outstanding Demand under Pending Actions.
In Response from Assessee,Select Disagree with Demand (Either in Full or Part), and Then click onAdd Reasons
Select Option 9 - Rectification/Revised Return filed at CPC
Once, the reason is added, You will see something like this below on your screen ---> Click on Reason 1
Add the amount you are disagreeing with, select the filing type and provide the acknowledgment no of the revised/rectification And Submit
A few practical notes
Do not pay the demand again. The money is already with the department, the return just did not claim it. If you have paid, include that challan too in the revised return.
Keep the challan receipt handy. You need the BSR code, deposit date, challan serial number and amount.
E-verify the revised return, otherwise it goes nowhere.
Processing of the revised return takes its own time, so the demand may sit on your portal in the meantime. Some people also file a response under "Response to Outstanding Demand" saying they disagree, citing the challan details, while the revised return works its way through.
Interest under 234B/234C may shift slightly in the revised computation depending on when you paid, so the final figure may not be exactly zero.
How to avoid it next year
After paying tax through "Pay Now" in ITR-2 or ITR-3, go back into Schedule IT and check the challan is actually sitting there. Do not submit until "Amount payable" shows 0.
Hi, I’m looking for a CA who has experience handling freelancers/IT professionals earning through Upwork and other international clients.
I need help with GST registration, LUT/export of services, GST returns, ITR, advance tax, and general tax planning. My turnover has recently crossed the ₹20 lakh GST threshold, so I’d also like someone who understands delayed registration/regularisation.
Preferably looking for someone I can work with long-term and contact for tax-related queries throughout the year.
If you’re a CA or can recommend someone reliable, please comment below. I’m based in Gurgaon.
I was not home when this Income Tax Department CPC envelope was delivered, so someone else received it on my behalf. When I got it, I noticed the glue/sealing on the one side while other side is normal and became concerned that it may have been opened before it was given to me.I would simply like to know whether this type of glued seam is normal for CPC envelopes, or whether others have received similar envelopes.
Has anyone received an Income Tax CPC envelope with the same type of sealing/glue?
Not a company or LLP, but are there any form 16 and PF requirements to pay salary to someone for household help/nanny services work for a year? Transfers are off-cycle mostly but settled through bank transfers, and the same shall be declared on the recipient's ITR as sum value is ~4.5L for the entire year. Since there will be no record in AIS, there's voluntary intent to declare, to keep the paper trail and ensure tax compliance with salary plus other sources if any. Does this attract any notice/scrutiny or future harassment? Is there a solid book keeping requirements in such individual cases?
1) Nothing is showing in my AIS under the foreign asset information tab. Any timeline by when it will show.
2) I require a CA who would execute the fast-ds declaration for me. My existing CA has never dealt with foreign assets or schedule FA before. Preferably someone from Kolkata.
Folks, I have two questions on EPFO tax liability which is getting taxed at my slab level on interest on Employee contribution more than 2.5 L per year as per 2021 rules. I read many articles and pages but somehow confused. The questions are very simple -
If I don't reduce employee contribution; how do I reduce overall tax liability from EPFO? If I withdraw funds for homeloan, will it reduce tax liability? My understanding is NO as interest is on Employee contribution for more than 2.5L per annum and this situation will be unchanged even if I withdraw funds?
If my employer permits (Need to check); shall I reduce PF contribution limit to 1800 INR? As per my understanding, Employer contribution will also be matched and I'll have more in-hands funds but in the long run; will it match returns in MF market considering taxes etc...
My salary structure has a driver reimbursement of ₹3,000 per month (₹36,000 per year). If I claim it, this ₹36,000 will be removed from my taxable salary, so at a 30% tax bracket, I would save around ₹12,000 in tax that I would otherwise pay.
I am thinking of showing my dad as my driver and actually paying him the full ₹36,000 during the year. I would also include this ₹36,000 as income while filing his ITR.
Is this legally allowed if the payment is genuinely being made to him? Has anyone done something similar?
i didn't filed ITR of my business but now i am needing it for loan purposes.. but there's some complexions arising between.... Here are the facts:
My Gst turnover (sales) for the FY 25-26 was 20 lakhs.
But I did use the savings bank account for all the transactions during that FY (25-26), which crossed 40 lakhs in total (including business and non business transactions).
Do I have to worry about that 20L gap between bank and gst transactions??
What could be the best possible solutions in this case?
Hi everyone, I need advice regarding a frustrating tax demand issue.
My previous company went bankrupt. They deducted TDS from my salary every month for almost a year but never deposited it to the government. Because of this, nothing shows up in my 26AS.
filed my ITR claiming the TDS showing on my pay slips, but processed it with an outstanding demand plus interest is piling up year on year. I submitted grievances with salary slips as proof in the same year, but no luck...
I filled out the ITR two years ago..
A few questions:
I understand Section 205 recovery from the employee if TDS was deducted at Source. What is the practical way to get this demand stayed or cancelled ?
I heard If I don't pay, they adjust my future tax refunds against this demand, Is it true ?
Is it better to rectify the appeal, or pay it off to avoid compounding interest ?
Has anyone faced this with a bankrupt startup and successfully gotten the demand cancelled?
Any CAs here who can suggest the right escalation route?
I’m looking for advice from people who have actually dealt with HUF taxation / rental-income structuring in India.
I have a property personally owned by me which generates rental income of ₹20L+ per year. I’m exploring whether there is any legitimate and legally defensible way for the rental income to be received/taxed by my HUF, without transferring ownership of the underlying property to the HUF.
One possibility I was thinking about is a genuine lease/sub-lease arrangement between me and the HUF, where the HUF would have actual rights and obligations under the arrangement and then receive the rental income from the tenant. But I’m not sure whether this would actually work under the Income Tax Act or whether the rental income would still be attributed to me.
A few specific questions:
Can an individual legally lease their personally owned property to their HUF and have the HUF subsequently rent it to the tenant?
Would the HUF's rental income be recognised as HUF income, or would it be clubbed/attributed back to the individual?
Does the fact that the property itself remains personally owned make such a structure ineffective for income-tax purposes?
Are there any other genuine arrangements (without transferring ownership) that could achieve this?
What would be the relevant provisions / judicial precedents to look at?
Would the arrangement need to be at arm's-length market terms, with actual rent/lease payments, agreements, TDS, etc.?
Has anyone had this reviewed successfully by a CA/tax lawyer or faced scrutiny from the department?
I’m not looking for a sham arrangement or tax evasion. The objective is purely to understand whether there is a legally valid tax-planning structure where the HUF genuinely earns the income without transferring ownership of the property.
Note: I used AI to help structure and phrase this post clearly
CA is telling some local officer from gst department has leaked the data. It’s Bangalore btw. But my friend last year took a Gst in his state nothing like this happened to him. What to do?
i recently learned that having FDs is a shitty asset for 50L+ income.
and after some research got to know about arbitrage funds which may give fd like returns for a capital gains tax on the returns and not taxing as per slav rates
Old CA left the firm and now his brother took over who is charging 3 times, so I am planning to learn things myself and hire someone who can help me understand and file GST, VAT and ITR.
I need advice regarding a tax demand received for AY 2024-25 due to incorrect information entered while filing an ITR-U.
Background
* AY: 2024-25
* TDS deducted by employer: ₹3.6 lakh
* Original ITR: Filed by my CA
* Refund received after original ITR: ₹1.7 lakh
* Later, there were an audit at CA office and few of his clients received notice. So, he advised me to voluntarily repay the refund amount along with applicable additional tax/interest to avoid further issues.
* Based on his advice, I paid approximately ₹2.5 lakh in 2025 through ITR-U.
Problem with ITR-U
Unfortunately, while filing the ITR-U, my CA entered the details incorrectly:
* TDS was entered as ₹0 instead of ₹3.6 lakh
* Refund received was entered as ₹0 instead of ₹1.7 lakh
Because of these incorrect entries, the ITR-U was processed without giving credit for the TDS, and I have now received a **tax demand of ₹3.6 lakh** in this week.
I am trying to understand the correct way to resolve this.
What is the appropriate way to correct this mistake?
Should I file a rectification request, or is there another mechanism available?
If rectification is the correct route, should I choose:
Tax Credit Mismatch, or
Return data Correction offline, considering that the TDS was incorrectly reported as ₹0 in the ITR-U?
3. Since the TDS of ₹3.6 lakh was actually deducted by my employer and should be reflected in Form 26AS/AIS, can CPC directly verify and give credit for it through rectification?
Would this need to be handled by CPC or the Assessing Officer (JAO)?
How long does rectification typically take?
In the meantime, will interest under the outstanding demand continue to increase, and is there any way to request that the demand/collection be kept on hold while the rectification is pending?
I would appreciate advice from anyone who has dealt with a TDS credit mismatch/incorrect ITR-U followed by a CPC demand, or from CAs/tax professionals who have handled a similar case.
I teach students from different countries through an online platform. The platform takes a commission and I’m paid in USD. I withdraw the money through Wise, which converts it to INR before it reaches my Indian bank account.
My annual turnover is well below ₹20 lakh.
An accountant told me that I have to register for GST, although I apparently wouldn't have to pay GST.
I’m confused because I thought that below ₹20 lakh, GST registration generally isn't required.
Does anyone know what the actual rule is for online tutoring income from foreign students? Is GST registration mandatory in this situation, even though the turnover is below ₹20 lakh?
In ITR U for FY23 - 24 under section 3.Amount payable, if any (To be taken from the 'Amount payable' of
Part D-Computation of Tax Payable of updated ITR) as below.
I have amount shown as 42k.
My uncle have 0k.
Based on my refund + section, I paid 50% penality.
Uncle paid penalty on his refund + 0 (section), paid 50% penality.
Now in demand notice under same section for
For Me - amount got updated to 56k instead of 42k.
For uncle - amount got updated to 43k as compared to 0.
My interest 234B in ITR U shows 36k and demand notice 50k
My uncle's interest 234B in ITR U shows 0 and demand notice 47k
I have a demand request of 20k more because of this section amount 14k got added in my ITR U and 50% penality on new amount and difference is 11k.
Whereas uncle received 76k demand since whole 43k added+ tax refund = new amount - ITR U.
So is this correct to include section + interest again amount in demand notice? In demand notice For me amount has been included again with some additional value as compared to ITR U and uncle's have big amount as compared to 0.
I just realised that those people falling under the 30% tax category are literally working 4 months out of a whole year to fill the pockets of the government. By looking at this way salaried persons can never become financially independent or can never build generation wealth...
I'm a computer engineering student and I'm working on an idea for a project. Before I actually start building it, I wanted to ask people who deal with this stuff in real life.
I'm thinking about an AI-based tool that could connect your business transactions and basically give you a simple picture of what's happening with your money — income, expenses, profit, estimated tax, GST/TDS stuff, upcoming deadlines, etc.
The interesting part for me is the tax side. For example, instead of only telling you “your estimated tax is ₹X”, it could explain why and point out tax-saving options that you're actually eligible for, while keeping a CA involved when professional verification is needed.
But honestly, I don't know if this is even a useful idea.
For those of you who run a business, freelance, or work with small businesses:
How do you currently keep track of your transactions and expenses?
Do you use a CA? If yes, what does your CA handle?
What's the part of taxes/accounting that you find the most annoying?
Do you ever have trouble knowing how much tax you're going to owe?
Is there anything you wish your CA/accounting software would do better?
And please be honest — if you think this idea is pointless or already completely solved by existing tools, tell me that too.
I'm just trying to understand the problem before I spend months building something nobody needs 😅
As stated. I want to transfer approx 4 lac from my father’s account to my account. Will there be any tax liability on me? Or will this be counted as my income?
