Income tax demand letter received ?

why ? how? what to do ?

by - MLG Associates, Chartered Accountants

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Today more and more people are doing e-filing of income tax returns. At our office 100% of the returns where the Govt has given the facility, we are doing online return only. An advantage is quick refund.

And a side effect is "quick" and transparently clear demand letter.

Now, let us know why these demands are arisen? and what to do about them ? 

This is one of the frequent questions from our users. Why my refund is -ve (or) why it shows as Tax Due when my employer has deducted all taxes? We provide this info to help you with that.

No 1. Wrongly linked  / unlinked TDS Certificates information

If your TDS certificates dont carry your PAN number correctly, you can be sure (sic) that you will not get credit of those TDS certificates. This is reason no 1.

No 2. Difference in amount of Interest u/s. 234A, 234B and 234C

If you had paid any self assessment tax, or advance tax, there could be a interest u/s 234a-b-c. Many a times, the assessee prefers to be silent on those. But the Govt of India software has no choice. It will charge you every rupee of interest for delays. and then you could be an assessee in default. So, if it is so, please do pay this small interest. You must.

3. Missing Deduction Information

You might have just finished entering your Salary Income details using your form 16, and you are yet to fill in your actual deductions. Kindly click on the “Deductions” tab next to Income tab and provide your deductions (investments, expenditure, donations) details. Even tough you have mentioned your Chapter VI A deductions in the Income from Salary, you have to capture them separately in the Deduction screen. This will help you to get maximized deduction.

Do you know, most tax payers do not declare all of their eligible deductions with their employer. 

4. Additional Income

Interest income (from bank / post office / other institutions) is taxable. You might have some Income from Interest, and you might not have furnished the same to your employer. So the employer might have deducted tax based only on salary income. Now adding interest income might show some -ve value in the refund counter. This is the tax that you owe to Income Tax department.

5. Housing Loan Deduction

If you pay housing loan, there are good chances that you might have declared the same to your employer. You might have forgot to mention the same here. Click on “Housing” tab to declare the same. Did you know, You’re eligible for a deduction on the interest paid on Housing loan up to 1,50,000. And if you have a tenant too, then you can have full rebate . no limits.

6. 80 C / 80 CCC Investments

You might have forgotten to provide investment details like LIC, NSC, PPF etc which are eligible for deduction under section 80 C. These details can be provided under the Deductions – Investment Details.

7) Expenses / Donations

Kindly check if you have provided your some of your eligible expenditure and donation details. Expenditure includes interest paid on education loan, mediclaim insurance, medical treatment for disabled dependent (dependent includes parents, spouse, children). Please make sure you provide these details under Deduction tab in the expenditure details section.

If none of them is applicable to you, and if you feel you need a help from tax professional please contact us for a free review of your tax return. Our tax professionals will review your return and see if any eligible deduction has been missed out.


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MLG Associates is a premier Chartered Accountancy and CA Firm, into Consultancy Faridabad, Gurgaon, and New Delhi. We are also serving clients upto Banglore in south

We serve our patrons with consultancy in matters relating to Taxation, Income Tax, Audit, Company Law Matters and the like. So, you can contact us for Income Tax returns, PAN, E-filing, Electronic Returns, Delhi Municipal Taxes E-filing, Bangalore Professional Tax Filing. 

MLG Associates, working for clients in New Delhi, Faridabad, Noida, Gurgaon, IMT Manesar, Shoghi, Shimla, Chandigarh, Kaleamb(Himachal Pradesh), Karnal, Sahibabad, Gaziabad,  ,  and so on. Pls click here for contact details.

Our Company Secretary team can handle your online Filing, Digital Signatures, Directors Identification Number, MCA 21 Work, New Company Registrations, Charge Creation, Charge vacation, CLB Matters, 

You can contact us by  e-mail : skgupta@mlgassociates.org, or by calling us at  +09312608426

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