TAX DEDUCTED NOT DEPOSITED
This query is : Resolved
15 July 2009
Hi,
What is the remedy availabe to an employee at the time of filing return when the Tax deducted from salary by the employer during the year has not been deposited to Govt. Also no TDS certificate has been issued by the Employer. The only proof available is the Salary Slip containing the details of month wise deduction during the year. Whether the employee is required to pay the tax amount which was not deposited by the employer or take necessary action against the employer? Please clarify
What is the remedy availabe to an employee at the time of filing return when the Tax deducted from salary by the employer during the year has not been deposited to Govt. Also no TDS certificate has been issued by the Employer. The only proof available is the Salary Slip containing the details of month wise deduction during the year. Whether the employee is required to pay the tax amount which was not deposited by the employer or take necessary action against the employer? Please clarify
16 July 2009
No....AO cannot collect from employee.....
16 July 2009
Sir,
Please elaborate as what option is available to the employee and action to be taken while filing the return
Please elaborate as what option is available to the employee and action to be taken while filing the return
26 July 2025
This is a tricky but important situation. Here’s how it generally works and what you, as an employee, can do if **TDS was deducted by your employer but not deposited with the government**:
---
### Scenario:
* Employer deducted TDS from your salary monthly.
* Employer **did not deposit** that TDS with the government.
* Employer **did not issue Form 16 (TDS certificate)** to you.
* You only have **salary slips** showing the TDS deducted.
---
### What should you do?
#### 1. **You still have to pay your tax liability on time**
* When filing your Income Tax Return (ITR), you must **pay the tax on your full income**, irrespective of whether your employer deposited the TDS or not.
* The tax deducted but not deposited by employer **will not be available as credit** to you on the Income Tax portal.
* This means you may have to pay the full tax liability **out of your own pocket** while filing your return.
#### 2. **Claiming credit for TDS not deposited**
* Unfortunately, since the employer has not deposited the tax, the credit of that TDS will **not be reflected in your Form 26AS or TDS statement**.
* The Income Tax Department recognizes TDS credit only if the tax is deposited with government.
* So, you cannot claim this deducted-but-not-deposited amount as TDS credit unless your employer deposits the tax.
#### 3. **Actions you can take against the employer**
* You can **remind your employer** formally (email or written notice) to deposit the deducted TDS and provide Form 16.
* Employer is **legally bound** to deposit TDS and issue Form 16.
* If employer fails to deposit TDS, they are liable to pay interest and penalty.
* You may approach the Income Tax Department and lodge a complaint regarding non-deposit of TDS.
* You can also consider approaching labour authorities or legal advice if employer is not cooperative.
#### 4. **What to report in your Income Tax Return**
* Report your full income (gross salary) in ITR.
* Show the actual TDS credit available as per Form 26AS (which will exclude non-deposited TDS).
* Pay remaining tax liability while filing the return.
* Attach an explanation or keep records (salary slips showing TDS deduction) to explain the discrepancy if required.
#### 5. **Future precaution**
* Check your **Form 26AS** regularly (via Income Tax e-filing portal) to confirm that TDS deducted by employer has been deposited.
* If mismatch arises, take immediate action.
---
### Summary Table:
| Situation | Employee Action | Employer Obligation |
| ------------------------------ | ------------------------------------ | ------------------------------------ |
| TDS deducted but not deposited | Pay full tax liability in ITR | Deposit TDS + pay interest & penalty |
| No Form 16 received | Use salary slips, file return | Issue Form 16 |
| TDS not reflected in Form 26AS | Cannot claim credit until deposit | Deposit TDS & correct records |
| Employer not cooperating | Lodge complaint with Income Tax Dept | Deposit TDS or face legal action |
---
If you want, I can help you draft a **formal letter/email to your employer** requesting them to deposit TDS and issue Form 16. Would you like that?
---
### Scenario:
* Employer deducted TDS from your salary monthly.
* Employer **did not deposit** that TDS with the government.
* Employer **did not issue Form 16 (TDS certificate)** to you.
* You only have **salary slips** showing the TDS deducted.
---
### What should you do?
#### 1. **You still have to pay your tax liability on time**
* When filing your Income Tax Return (ITR), you must **pay the tax on your full income**, irrespective of whether your employer deposited the TDS or not.
* The tax deducted but not deposited by employer **will not be available as credit** to you on the Income Tax portal.
* This means you may have to pay the full tax liability **out of your own pocket** while filing your return.
#### 2. **Claiming credit for TDS not deposited**
* Unfortunately, since the employer has not deposited the tax, the credit of that TDS will **not be reflected in your Form 26AS or TDS statement**.
* The Income Tax Department recognizes TDS credit only if the tax is deposited with government.
* So, you cannot claim this deducted-but-not-deposited amount as TDS credit unless your employer deposits the tax.
#### 3. **Actions you can take against the employer**
* You can **remind your employer** formally (email or written notice) to deposit the deducted TDS and provide Form 16.
* Employer is **legally bound** to deposit TDS and issue Form 16.
* If employer fails to deposit TDS, they are liable to pay interest and penalty.
* You may approach the Income Tax Department and lodge a complaint regarding non-deposit of TDS.
* You can also consider approaching labour authorities or legal advice if employer is not cooperative.
#### 4. **What to report in your Income Tax Return**
* Report your full income (gross salary) in ITR.
* Show the actual TDS credit available as per Form 26AS (which will exclude non-deposited TDS).
* Pay remaining tax liability while filing the return.
* Attach an explanation or keep records (salary slips showing TDS deduction) to explain the discrepancy if required.
#### 5. **Future precaution**
* Check your **Form 26AS** regularly (via Income Tax e-filing portal) to confirm that TDS deducted by employer has been deposited.
* If mismatch arises, take immediate action.
---
### Summary Table:
| Situation | Employee Action | Employer Obligation |
| ------------------------------ | ------------------------------------ | ------------------------------------ |
| TDS deducted but not deposited | Pay full tax liability in ITR | Deposit TDS + pay interest & penalty |
| No Form 16 received | Use salary slips, file return | Issue Form 16 |
| TDS not reflected in Form 26AS | Cannot claim credit until deposit | Deposit TDS & correct records |
| Employer not cooperating | Lodge complaint with Income Tax Dept | Deposit TDS or face legal action |
---
If you want, I can help you draft a **formal letter/email to your employer** requesting them to deposit TDS and issue Form 16. Would you like that?
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