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Post by bhumika on Sept 25, 2006 16:24:24 GMT 5.5
Remedy for excess deduction
Please clarify whether excess paid to an employee in the form of salary can be recovered. In Tax Forum of September 18, it has been stated that the employer can recover excess salary paid to an employee. In our office we have found some excess paid in salary to some employees and it has been duly recovered. But the excess belonged to the last year for which tax had been recovered and paid to the IT Department in the last year itself. Now the employees want refund of IT deducted for the excess recovered.
The issue raised by the reader dealt with in Tax Forum dated September 18, was on the short question, whether the excess allowance granted on which tax was deducted at source last year can be recovered during the current year and that tax deduction need be only on net amount paid during the year. It is, no doubt, possible for the employee to claim refund on the allowance wrongly calculated and allowed in the return to be filed for the year of receipt. He can also file a revised return within one year from the end of the assessment year, if time is available. The easier course is to restrict the tax deduction to the amount actually received in the succeeding year and pay tax accordingly. There is no need for revision of the earlier income, since the amount was received by the assessee as salary, though wrongly calculated.
S. Rajaratnam
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