Form 16

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

19 November 2014 One of our employee demanded Form 16 for F.Y 2013-14. But his salary and Incentive for 3 months adjusted against penalty.

Should we consider his salary and Incentive which was adjusted against penalty in sec 17(1)?

Amol S Joglekar

Amol S Joglekar (Expert)
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19 November 2014 No. Salary is separate from penalty.

Querist : Anonymous

Querist : Anonymous (Querist)

19 November 2014 If we not paid him the salary, than also we have to show in sec 17(1)?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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19 November 2014 Salary not paid need not be shown under salary for tax purpose.

Amol S Joglekar

Amol S Joglekar (Expert)
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20 November 2014 Salary is accrued to the employee. Under some other agreement, penalty has been imposed. So? First the Salary is given and hence accrued to the employee.

Querist : Anonymous

Querist : Anonymous (Querist)

21 November 2014 Suppose an employee total earnings is Rs.15000/- (Including PF Rs. 780/- and PT Rs.200/-)

We adjusted his entire amount of Rs.14020 (after deduction) against penalty.

In this case we have to show his salary amount as nil in TDS Certificate. should we have to show PF in 80C and PT in Tax on Employment column?

Amol S Joglekar

Amol S Joglekar (Expert)
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21 November 2014 A small request.
Tell me the entry you passed for PENALTY in your books of accounts.

Querist : Anonymous

Querist : Anonymous (Querist)

21 November 2014 Penalty A/c - Dr
To Salary Payable A/c

Amol S Joglekar

Amol S Joglekar (Expert)
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21 November 2014 Thank you. This itself ANSWERs your query.
You are NOT making any entry for
Dr Salary A/c
Cr Salary Payable???????

Querist : Anonymous

Querist : Anonymous (Querist)

24 November 2014 What is the correct entry to be pass in the books?

Amol S Joglekar

Amol S Joglekar (Expert)
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24 November 2014 There are 2 financial transactions in this.
01. Salary : Salary has fallen due and accordingly the entry to be passed is Dr Salary, Cr Salary Payable.
02. Recovery of amount of penalty
Dr Salary Payable, Cr Penalty (Penalty is going to be other or misc income of the Company)

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Querist : Anonymous

Querist : Anonymous (Querist)

24 November 2014 So we should not reflect any amount related to PT and PF in Form 16?

Amol S Joglekar

Amol S Joglekar (Expert)
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24 November 2014 If you are deducting PT and PF from the said salary, you should show it.

Querist : Anonymous

Querist : Anonymous (Querist)

24 November 2014 Ok I got it..

Thank u so much sir.

Amol S Joglekar

Amol S Joglekar (Expert)
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24 November 2014 You are most welcome.

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