TDS on salary: Employees responsibility if employer defaults
- Tuesday, November 15, 2011, 16:31
- Income Tax
- Articles, Featured
The Income-Tax Act casts responsibility on the employer for tax deduction at source (TDS) at the time of payment of salary to employees whose salary income is above the maximum amount not chargeable to tax. The employer is required to deduct TDS on salary at the average rate of income-tax and deposit the same with the government within the prescribed time. The employer is also required to file withholding tax returns and issue TDS certificate to the employee.
Various penalties are levied on the employer in case of default, making the entire procedure equally painful for your employer.
So, you must have started realising that the grass on the other side is not as green as you thought. Though, from the above it is understood that TDS is solely the obligation of the employer but, if as an employee you are aware that there is a TDS default, then you may be held responsible too. If your total income exceeds the maximum amount not chargeable to tax and no TDS is being deducted by the employer, then you are under an obligation to pay tax through the advance tax route.
You should estimate your total income for the year that could comprise of salary, house property, interest income etc. Relevant deductions applicable to each source of income, on account of eligible investments, interest on housing loans, etc, can be considered to calculate the taxable income. On this amount, you should calculate the tax payable as per the applicable tax rates.
Having arrived at the gross tax liability, reduce the amount of TDS suffered/ likely to be suffered on the above income. If the balance tax payable exceeds Rs 5,000, you will be required to comply with the advance tax provisions. The entire amount becomes payable as advance tax in three installments on or before September 15th, December 15th and March 15th, during the financial year.In case you miss the advance tax installments, taxes can also be deposited by way of self-assessment tax post April 1 (after the end of financial year). In case the employer has defaulted in TDS, it would be your responsibility to deposit taxes by way of advance tax/ self-assessment tax as ultimately, taxes are to be deposited on your income.
Failure to deposit taxes could lead to concealment of income on your part, resulting in penalty to be paid by you equivalent to 100-300% of the tax amount not deposited.Further, there are interest implications as well at the rate of 1% per month, but there are judicial precedents which indicate that if taxes were required to be deposited by way of TDS and have not been done, the recipient of income is not required to pay interest.
Going forward, before you plan your month-end celebrations, just glance through your pay stub. Instead of creating a hue and cry over the tax figure, be thankful to your employer for taking care of your taxes and saving you from a lot of hassles.
Above Post was First Published on 2nd June 2010
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- What if Employer refuses to issue TDS Certificate / Form 16
- Where the compensation received by the assessee-professional from his former employer was only for not carrying on business, the same cannot come under term “profit in lieu of salary”
Here my question what if employer fail to deduct the TDS on salary and at the end of year the form-16 show the TDS need to be deposit by employee.
Will Income Tax Deptt. issue any demand on this against employer.
and what if employer deducted and not deposited then ?
Why salaried person have to pay advance tax. now govt also require advance tax in advance…Govt kuch to aapni mahenat se kam kere..improve public sector….ki humare paisese hi govt chalegi…to get education at high fees burdun…then job searching with good scal is burdun…..all commodity price has already increased that burdun…tax burdun…then scrutiny time AO demands money that burdun….we goes to appeal at senior level demands money that burdun that burdun…..he ram.
i dont no what govt has taken action for corruption ?…..Wht step have tekn to get money from swiss bank…..that black money india me layege to itna tax normal person se bhikh mangni nahi padti.
@ Vijay: If employer fails to deduct the TDS than he will liable for penalty provisions.
& IT Dept. will not issue a demand notice to the employer instead will be charged penalty.
@ Amit: If employer deducted and not deposited than you have not to be worry till you have TDS certificate from the employer.
@ Amit: In my openion that why govt. has come with this provision because now a days so many peoples are not disclosing there other income to there employers, resulting in lower deduction of TDS on the employer end.
So the govt. wants that employee if wants to conceal any income till the end of the year than he is not allowed to do that as it has been mentioned there would be a penalty of 100-300% of the tax amount.
For furthur queries mail me at riteshjainj@gmail.com
Employer deduct tax on the declaration of the Employee in respect of investments under Sec 80 CC or others and also Produces a Rent Receipt to get benefit of HRA etc.what are the responsbility if the declaration proves to be wrong or false. is there any standard form which should be filled by such employees whose salary crosses the limit of maximum amount not chargeable to tax. there should be some responsibility on the shoulders of the Emplolyees. please enlighten on this issue
employee submit the proof to investment to employer . employee take a declration from employee that what he has sbumitted are correct & of INCOME TAX DEPARTMENT found that the investment shown by employee is worng. In that case any penelty employer need to pay? or as the employer already have the declaration of employee he is safe?
If an employee claims HRA rebate by producing wrong receipt or declration whose is responsible for wrong claim.
If an employee claims interest on housing loan and also claims HRA rebate as he works at different city Is it necessary for the employer to get a declaration from employee for the property wherein he claims interest is vacant.
I did not submitted/declared the Form12b of previous company to the current company, so the current company has not deducted any tax. After combining the previous company salary and current company salary, income exceeds the maximum amount not chargeable to tax. How can i pay the remaining tax?
Please provide me the details ASAP.
During the year 2007-08 a employee of my concern has given undertaking that she will furnish form No. 10(a) and thus deducted tax accordingly. Thereafter she fail to furnish the said form from here arrears and tax amounting to Rs. 15600/- were deducted less from her salary which later on she deposited with penalty through bank challan after 31st March of that year. Now Income tax department issued show cause notice regarding less payment. They are not convinced with the fact that the tax was deposited by the employee herself as it was not shown in TAN of the concern as she deposited individually. can it be possible to take that amount under TAN? OR what should I do to reply the department?
Here my question what if employer fail to deduct the TDS on salary and at the end of year the form-16 show the TDS need to be deposit by employee.
Will Income Tax Deptt. issue any demand on this against employ
if employer fail to deduct the tds on slary and at the end of year employer cut complete tds can employee take any action
When you get stuck up all provisions of Law comes in action and assesse are punishable for payment of penalty and interest, Now if any employer does not deduct TDS from salary then the expenses claimed for salary of such person will be disallowed and added to income of that assessment year and when TDS is paid in the later year then the said expenses will be allowed in that later year of payment of TDS, that’s what Law says,
It was bad at law for not deduction of TDS from Salary, any employer in India has to be cautious by asking their employ for details of employees tax saving investments,and explain each employee for the taxation part during the year from April onwards,The accounts and tax department or Chartered Accountant of the company has to take care of such matters,and comply with all the rules and regulations of Law requirements,
I hope you understand the pains of payments
thanks
ashok patel
Dear Sir,
My salary is taxable & I want to deduct the TDS from Dec onwards but my company is deducting TDS from April i.e. taxable amt divide by 12 months. & they are telling that it is a new rule which we have to follow.
Please advice.
I AM A PENSIONER. MY TOTAL PENSION INCOME IS BELOW THE TAXABLE LEVEL. (2) FOR MY INTEREST INCOME FROM DEPOSITS THE BANKER DEDUCTS TDS AT THE YEAR END, AS THE DEPOSITS ARE CUMULATIVE TIME DEPOSITS. PREVIOUSLY I WAS IN THE HABIT OF PAYING ADVANCE TAX. WHEN I INFORM THE BANKER THAT I HAVE PAID ADVANCE TAX FOR MY PENSION AND INTEREST INCOME PUT TOGETHER, WITH PROOF OF HAVING PAID, AND REQUEST HIM NOT TO RECOVER TDS,THE BANKER PLEADS INABILITY TO OBLIGE BECAUSE THE TAX LAW FORBIDS HIM FROM DOING SO. THIS IS AN ANAMOLOUS POSITION. THIS IS TO BE REVIEWED BY THE INCOME TAX AUTHORITIES. IN CASE THE TAX PAYER PAYS ADVANCE TAX, THE BANKER SHOULD BE PERMITTED NOT TO RECOVER TDS. WILL THIS BE LOOKED INTO?
They are right.
Employer was not deducting TDS from Salary. Employee paid advance tax in challans at a bank in Sept.,December and March . proof of advance tax payment and proof of savings eligible for 80C deduction were given to employer for getting Form 16. The employers charted accountant then says the employers has to deduct TDS and goes ahead and deposits TDS in June along with penal interest which was then deducted from salary of employee along with the TDS. Is the employer right in making the employee pay th penal interest when he has paid advance tax and has a net refund due.
In my opinion employer can not deduct towards penal intt. from employee salary. However tds is rightly deducted.
Yes they are right
No employee can’t take any action
What is the rate of interest if quarterly payment made late.how is it calculated can u please send it on my mail id
I did not submitted/declared the Form12b of previous company to the current company, so the current company has not deducted any tax. After combining the previous company salary and current company salary, income exceeds the maximum amount not chargeable to tax. How can i pay the remaining tax?
Please provide me the details ASAP.
If there is any specific provisoin in income tax saying that if a pensioner has depsoited self assessment tax & deposit the copy of challan to bank, Bank is still under liabilty to deduct TDS.
if there is any specific clause or provision, pls mail the said clause or prov. thx..
@ Rohit,
Please calculate your net taxable income and then tax liability. Pay this tax liability yourself by adjusting any amount deducted by employer as TDS.
Help is available at vkbajaj@india.com
@ Mr Subhash Bhatt
Your employer is right and allow them to deduct Tax from April.
@Mr Mukesh Patel,
No you cannot take any action against employer. It is the Income Tax Deptt who will question as why the tax was not collected correctly. Further it depends upon the tax amount. If the tax amount is less than 5000 then feel easy.
You can know more by email at vkbajaj@india.com
@ Mr Ravi,
Please write facts giving all figures of tax and dates at vkbajaj@india.com so that correct reply be given to you.
@CMA. R.LGARG – FICWA
In case the employee has furnished FALSE DECLARATION then I Tax Deptt will trouble employee for recovery of short deductions, penalties and interest thereupon. And further it could be case of section 271 for doing a wrong (false declaration) intentionally. Please note that it makes a big difference between ‘wrong calculation of tax’ and making a wrong calculation intentionally by self or by furnishing false declaration.
May contact me at vkbajaj@india.com
Sir,
I work for a small company. My Income is taxable. In the month of march i have been asked for my investment details and I give them particulars like PPF, medical and House rent. The amount I mentioned that I will be depositing in my PPF account , I could not deposit all the amount before 31 march 2012. My employer didnt asked for any proof at that time. Please let me know if I can deposit the amount now I mean in the month of april or should i inform my employer of this, so that they can deduct TDS.
Please help.