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Top 5 Myths about Tax Refunds

Myth 1: Getting a Tax refund in this year means, there is no need to pay withholding tax for the next year.

Truth:       Refund in one year will be adjusted in the next year tax due to department if both years are under the assessment  and interest , penalties can still be levied . Adjustment of refund is at the discretion of the officer. One should estimate the tax liability accurately to reduce the refund unless it is beyond their control.

Myth 2:  Tax refund may be change because of wrong calculation.

Truth: Estimate is different from actuals. The income which we thought to receive may not be received, any allowance/deduction which we are not eligible may be eligible as per statute.

Myth 3: Getting refund from tax authorities took years

Truth:  As being all online now a days if the calculations are exactly captured and bank details are captured the refund processing speed increases a lot.

Myth 4: Home-office deductions results to audit.

Truth:   for the business and professions if we are unable to maintain the proper books of accounts we have the option to select the presumptive taxation if our business falls under that category then specific rate is considered as our net income irrespective of the expenditure incurred.It reduce the compliance cost and possibility of audit by tax authorities in India.

Myth 5: Accountant is liable for any mistake in filing of return.

Truth:     The assesee is responsible for the tax return filed. It is their responsibility to go through the return in detail and get the doubts if any clarified before uploading the return as the returns are electronically uploaded and annexureless.


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