Filing Return under Income Tax means getting Refund is most common misconception among some people.
People often misunderstood a word ‘Return’
Some People has often misunderstood that Filing Income Tax ‘Return’ means process of getting Income Tax Refund.
One of the possibilities of refund of TDS amount while filing Return of Income (ROI) is when Income
from particular head is lower than a Tax Deducted at Source (TDS).
In simple terms let’s take an example,
EXAMPLE 1
An Assessee (Individual) has Bank Interest from Fixed Deposit in Bank of Rs.25,000 in the F.Y. and
Bank has deducted Tax at Source (TDS) on that Bank Interest under section 194A of Rs.2,500 i.e 10%.
But Assessee DO NOT have any other Income except this Bank Interest from Fixed Deposit, therefore
his Income below BASIC EXEMPTION LIMIT (Applicable to Individual/HUF). So, If Assessee now
Files Return of Income He/she will get Refund of TDS amount deducted by Bank. But to claim this TDS
amount Assessee needs Files his Return of Income (ROI) within due date under section 139(1) then
only Assessee will be able to get Refund.
EXAMPLE 2
Let’s continue above situation,
An Assessee has Bank Interest from Fixed Deposit in Bank of Rs.25,000 in the F.Y. and Bank has deducted Tax at Source (TDS) on that Bank Interest under section 194A of Rs.2,500 i.e 10%.
But Assessee ((For Individual/HUF) shows only partial amount in Return of Income (ROI) or having other Income such as Bank Interest from other bank or Rental Income etc. which is above BASIC EXEMPTION LIMIT (For Individual/HUF) and after claiming Rebate under section 87A (of Rs.12,500), and claim Tax Deducted at Source (TDS) as “Refund” while filing Return.
In above case, Now a days Form 26AS which is issued by Income Tax depart or Annual Information System (AIS) reflects many transactions on your PAN number and amount of TDS deducted, Total Bank Interest or any other payment is shown there.
So, If Assessee Files such type of return with a refund claim then there will be mismatch in Income Tax Return itself and Assessee will get Notice from Income Tax Department very soon demanding the amount of Tax with Interest.
Even if Assessee shows amount of Income lower than the amount appearing in Form 26AS or Annual Information System (AIS), then there are very high chances you will get Notice from Income Tax Department as to why amount has shown lower side in return.
