What if the employer failed to deduct the TDS in full?

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  1. FI Cell

    FI Cell New Member

    I have a query regarding short deduction on Salary. The employee got retired in the month of November and somehow the employer failed to deduct the TDS in full. However the (retd) employee has no idea to evade tax and he says he has already deposited the short deduction amount with IT department on his own.

    Now he is demanding a Form16 from the employer. Is it ok for the employer to issue a Form16 with Net Tax Payable? In this case, whether the employer is liable to pay any penalty?

    On the other part, whether it is the right of the employee to get his Form16 from the employer, nevertheless the employer had deducted the actual TDS or not?
  2. ZED

    ZED Well-Known Member

    It is the responsibility of the employer to deduct tax from the salary [S.192]. If he does not deduct the same then 30% of the expense will be dissallowed to him and yes there are penalties for non deduction.

    Nevertheless, it is the responsibility of the employer to pay the tax on his income [S.191]
    Form 16 will have to be issued, if they don't then more penalties would be waiting.
    When filing the return, do take into consideration the taxes paid by self.

    S.191. In the case of income in respect of which provision is not made under this Chapter for deducting income-tax at the time of payment, and in any case where income-tax has not been deducted in accordance with the provisions of this Chapter, income-tax shall be payable by the assessee direct.
  3. FI Cell

    FI Cell New Member

    Thanks for the advice..
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