TDS on Salaries

TDS for what if no TDS deducted?

Thank u...

@ U S Sharma...sir my query was whether in the above mentioned case, issue of TDS Certificate is mandatory ...

TDS certificate is a document of "tax deducted at source" 

when TDS is not deducted, its not mandatory 

Since the salary is below the basic exemption limit NO TDS is required to be deducted... Hence the issuance of TDS Certificate i.e. Form 16A does not arise..

But you need to issue Form 16 i.e. Salary Certificate to employees...without this they cannot file their IT returns..

salary certificate other than form 16 can be issued, but not TDS certificate. 

Whether Cess is applicable on TDS on Saalry??

Originally posted by : Roopa
	Whether Cess is applicable on TDS on Saalry??

yes, on salatry TDS , education cess + secondary and higher secondary education cess is applicable

TDS Certificate is not mandatory if TDS is not deducted from salary i.e. exemption limit. and when u filed the return then no requirement of TDS certificate.

Form 16 shall be issued for salary (also considered as TDS certificate) eventhough there is no deduction of TDS and salary income is not taxable. 

For cess is agree with Mr.sharma.

Thank u all...so i understand issue of TDS Certificate is not  mandatory if no TDS is deducted if the salary income is below the exemption limit....  

Thank u all for the response...

TDS Certificate is issued by TDS deductor to deductee as a proof for I.T. paid indirectly by assessee means by other party, so that if tds is not deducted then there is no requirement for issue of TDS certificate.

Regards,

Kindly find below Rules to Income Tax - Rule 26A

[Furnishing of particulars of income under the head “Salaries” ⁹ .

26A. (1) The assessee may furnish to the person responsible for making the payment referred to in sub-section (1) of section 192, the details of the income under the head “Salaries” due or received by him from the other employer or employers referred to in sub-section (2) of that section and of any tax deducted at source from such income in Form No. 12B.

(2) The person responsible for paying any income chargeable under the head “Salaries” shall furnish to the person to whom such payment is made, a statement giving correct and complete particulars of perquisites or profits in lieu of salary and the value thereof in,—

          (a)  relevant columns provided in Form No. 16, if the amount of salary paid or payable to the employee is not more than one lakh and fifty thousand rupees; or

      ¹⁰ [(b)  Form No. 12BA, if the amount of salary paid or payable to the employee is more than one lakh and fifty thousand rupees, which shall accompany the return of income of the employee.]

Explanation : “Salary” for the purposes of this rule shall have the same meaning as given in rule 3.]

As far as this rule goes for issuing the Form, some may take advantage of law which mentions words "may" or "any", but the practical problem is that one has to issue Form 16 whether TDS is deducted or not. Form 16 not only mentions TDS deduction details but also salary details. It would be a good thing to issue the Form 16.

Now from Legal Point of View

I qoute Sections 203(2) and Rule 31 to IT Rules

203. (1)Every person deducting tax in accordance with the foregoing provisions of this Chapter]shall, within such period as may be prescribed from the time of credit or payment of the sum, or, as the case may be, from the time of issue of a cheque or warrant for payment of any dividend to a shareholder, furnish to the person to whose account such credit is given or to whom such payment is made or the cheque or warrant is issued, a certificate to the effect that tax has been deducted, and specifying the amount so deducted, the rate at which the tax has been deducted and such other particulars as may be prescribed.

(2) Every person, being an employer, referred to in sub-section (1A) of section 192 shall, within such period, as may be prescribed, furnish to the person in respect of whose income such payment of tax has been made, a certificate to the effect that tax has been paid to the Central Government, and specify the amount so paid, the rate at which the tax has been paid and such other particulars as may be prescribed.

From the above section 203(2), an employer shall furnish the certificate only if any tax has been paid to central govt. on behalf of the employee.

Now for Rule 31 of IT Rules states that employer has to issue TDS certificate in Form 16 . The said Rule states as under