NO TDS deduction by Employer

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This query is : Resolved

Richa (Querist)

06 May 2011 HI, One of my friend was working with one Audit firm where they have promised to pay salary after dedcuting TDS say net in hand as Rs 33000 and he used to get it, but when Form 16 was asked or salary slips were asked first they were not ready to provide and when provided it showed that there is NO TDS Deduction. TDS liable to be paid is around 23K as he didnot make any Investments under Chapter VI.

Please suggest what shall be done ? Whether such emplyers are allowed to do so? Who will catch them ?

ca cs shriyans jain

ca cs shriyans jain (Expert)

06 May 2011 No, need to worry as if they r paying u a salary then that amt vl b disallwd as an expenditure for them, or aftr deductn of tds faliure to pay is an henious crime, which attract imprisonment upto 7yrs. Nd intrest @2%p.M or part of month.
U just enquire whether they r payng him as consultancy fees. Whch attract tds undr 194j

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Pragnesh

Pragnesh (Expert)

07 May 2011 Dear friends, imprisonment and interest on non deduction of TDS will applicable in case firm will consider expenses other than Salary. In this case Firm has issued Form 16 it means TDS will applicable under 192B. In case firm has not deducted TDS, it will assume that said employee has given any type of investment declaration 192(2B)which are related u/s. 80C or 80D during the financial year. In this situation assesse become liable to pay their tax. Also U have mentioned that firm has given commitment for TDS liability, in your case i suggest you if you have all committment in written, then do not pay TAX. In future if any notice recd. from Department then produce said letter.

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Richa

Richa (Querist)

10 May 2011 Ok.. Thanks a lottt..
He has not made any 80C declaration.He is working as employee and not as consultant.
He is thinking to pay tax before filling return as he came to know after March 31 about no TDS dedcution by Employer.Is he doing right?

Pragnesh

Pragnesh (Expert)

10 May 2011 Dear Richa, Pls. read again offer letter or confirmation letter given by the Employer. If Employer has mentioned that "Company will bear TDS liability or all other statutory expenses apart from Rs.33000/-, then do not deposit tax. In absence of above clause i suggest you PAY the selfassessment tax with Interest. Thanks
Pragnesh

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