ITR filing: Don't forget to claim TDS credit
As per income tax rules, you should claim credit for TDS on income that is paid or accrues to you in the same financial year as the TDS is deducted.
As per income tax rules, you should claim credit for TDS on income that is paid or accrues to you in the same financial year as the TDS is deducted. However, at times you may get income paid to you in advance (such as lump sum advance rent) all of which may not belong to one FY. If TDS is deducted on this advance payment, then the portion of TDS relating to the advance income which does not belong in the current FY will have to be carried forward to the next FY in which the income is actually earned. Basically, credit of TDS on any income can be claimed only in the FY in which the income is actually earned and not in the year in which it is has been received.
Any advance payment made to you during the year on which TDS has been deducted will not be allowed to be claimed as TDS credit in that year. If you only fill the 'TDS Deducted [Col (5)]' column but not the second column mentioned above, then you will not get credit for the TDS in the final income tax calculation which is auto-calculated in the ITR.
TDS can be deducted by a bank on interest income paid to you or by your tenant. TCS (tax collected at source) could have been paid by you if the motor vehicle you purchased was worth more than Rs 10 lakh. Credit of TCS during the year has to be claimed in your ITR in a manner similar to that for TDS.
To claim the TDS credit in ITR-1 available on the online platform, the details have to be filled in the 'Tax details' section of the form. Similarly, if you are filing ITR 1 or ITR 2, using Excel form, then such details will have to be filled in 'TDS and TCS' schedule of the tax return form.
In the online form of ITR-1, under the 'tax details' section, the tax deposited against your PAN is shown in five schedules:
a) Details of tax deducted at source (TDS) from salary (as per Form 16)
b) Details of TDS from income other than salary (as per Form 16A)
c) Details of TDS (as per Form 26QC furnished by the deductor)
d) Details of TCS (as per Form 27D issued by the collector)
e) Details of advance tax and self-assessment
In three out of the five schedules mentioned above, you have to ensure that the last column for claiming TDS credit in the ITR form is filled.
Recently, the income tax department has started providing pre-filled XML which can be used to pre-fill some details in ITR forms. However, one must check that all the TDS credits have been correctly pre-filled in the ITR form. Abhishek Soni, CEO, Tax2win.in, an ITR filing website says, "In the pre-filled ITR forms, the tax credit available (TDS) to the tax-payer is automatically filled in the TDS schedule of the ITR from Form 26AS. However, if such information is not pre-filled, he/she has to fill the information in the ITR form using Form 26AS."
If you do not claim the TDS credit, then while calculating the your tax liability for FY 2018-19, such credit will not be taken into account and you might have to pay additional tax from your pocket at the time of filing ITR.
However, there is help because it is likely that when you click on 'validate or calculate tax' in the ITR schedules (click on 'Validate or Calculate tax' on the right hand side of each filled schedule) then you would get a message telling you to fill any information that is mandatorily required. So watch out for such a message and correct your ITR before filing accordingly.
(Screenshot taken from ITR-1 excel utility)
However, you must be careful while filling tax details in ITR form as it may happen that you miss out the TDS credit.
What if you forgot to claim the tax credit?
If you forgot to claim the tax credit, then it will not be automatically carried forward for the next year.
If you have already filed ITR, then to claim the TDS credit, you will be required to file a revised return. Soni says, "If the taxpayer forgets to claim the TDS credit while filing ITR, then he/she will lose out the benefit unless specifically mentioned details of carrying forward it for the future years. To claim the benefit, he/she is required to file a revised return claiming the tax credit."
Remember if you have to file a revised return, then you have time till March 31, 2020 to file your revised return.