Tax deduction
This query is : Resolved
16 March 2017
1. Reg. Income on Salaries.
- Can an employee request the employer through an application not to deduct his/her taxes vide a declaration that he/she will take care of his TDS and other liabilities with regard to Income Tax and employer is not responsible for the same?
2. Payment of Taxes on Salaries.
- One of the company, employees are receiving salaries with 60 - 90 days delay. Eventually, employees are receiving around 8-9 months salary only during the financial year. In this case, is employee is liable to pay for the salary which he/she has received in his / her bank account or for the full earned salary of 12 months ...even though the payment is not credited to an employee's account? I am assuming to pay taxes only on the salary which got credited to an employee's bank account. Request clarification on this please.
3. Employer deducted income tax from salary but not deposited to Income Tax Department..... so not issuing Form 16.....
When the employer is a defaulter, what do employee's course of action to file Annual Return?
- Can an employee request the employer through an application not to deduct his/her taxes vide a declaration that he/she will take care of his TDS and other liabilities with regard to Income Tax and employer is not responsible for the same?
2. Payment of Taxes on Salaries.
- One of the company, employees are receiving salaries with 60 - 90 days delay. Eventually, employees are receiving around 8-9 months salary only during the financial year. In this case, is employee is liable to pay for the salary which he/she has received in his / her bank account or for the full earned salary of 12 months ...even though the payment is not credited to an employee's account? I am assuming to pay taxes only on the salary which got credited to an employee's bank account. Request clarification on this please.
3. Employer deducted income tax from salary but not deposited to Income Tax Department..... so not issuing Form 16.....
When the employer is a defaulter, what do employee's course of action to file Annual Return?
16 March 2017
1. He cannot give any declaration but he need to obtain certificate from Assesing officer under section Wii for lower or no red deduction
16 March 2017
salary is taxable on earliest of receipt of the basis. hence even if salary received next year it is taxable in current year
17 March 2017
Thanks Mr. Vaibhav. Will you kindly let me know the procedure to get a Certificate from the Assessing Officer. This is because, just a month ago I have joined one company which is having a 100 Cr. turnover and I am surprised to see the unpaid tax on salary which has been deducted from the employees from the f.y. 2013-14 to till date and is unpaid ... in view of which none of the employees have filed their returns. (Also surprised how Income Tax Department is working on these type of issues)... So, in the coming financial year I am preparing for myself.... so that I want to produce the certificate to the employer and get rid of these issues by paying advance tax on my salary.... so a request to help. Thanks in advance.
26 July 2025
Got it! Here’s a clear breakdown and guidance on your three queries:
---
### 1. Can an employee request employer *not* to deduct TDS by submitting a declaration?
* **No**, an employee **cannot** submit a declaration asking the employer to *not deduct* TDS.
* The employer is **mandated by law** to deduct TDS as per income tax rules.
* If an employee expects a lower or nil TDS deduction, he/she can apply to the **Assessing Officer** for a **certificate under Section 197** for lower/no deduction.
* Employer can deduct tax only after considering this certificate.
---
### 2. Taxability on salary delayed and partially paid in a financial year
* Salary is taxable on **“earlier of the two”**:
* When salary is **earned** (due date basis), or
* When salary is **received** (actual receipt basis).
* As per **Income Tax Act, salary is taxable on the earlier of actual receipt or due date**.
* So, even if you receive salary after delay or partial payment within a FY, the entire salary **earned for that financial year** is taxable in that FY.
* You **cannot** pay tax only on the amount actually credited in your bank; you must declare salary actually earned in that year.
* This means you may have to pay tax on salary that is accrued but unpaid in the year.
---
### 3. Employer deducted TDS but not deposited, and no Form 16 issued — what can employees do?
* Unfortunately, if employer deducted TDS but **failed to deposit** it with the Income Tax Department, employees’ TDS credit will not reflect in their Form 26AS or tax records.
* Employer is responsible to deposit TDS and issue **Form 16**.
* **Employee’s options:**
* Still **file Income Tax Return** declaring the full salary income and TDS as per Form 16 or payslip.
* If no Form 16 is issued, declare income and **pay tax on your salary income directly** to avoid default.
* Keep all salary slips and proof of deduction to show intention of tax deduction.
* Employee can **write a complaint or representation** to the Income Tax Department or local jurisdictional officer regarding employer’s non-deposit.
* File a complaint with **labour department** for non-issuance of Form 16 or delay in salary payments.
* You can also **pay advance tax** yourself on expected salary to avoid interest or penalty.
---
### Regarding procedure to get **Section 197 certificate** for lower/no TDS deduction:
* You need to submit **application in Form 13** to the Assessing Officer of your jurisdiction.
* The AO will consider your estimated income, deductions, etc., and issue a certificate authorizing employer to deduct lower/no tax.
* Application is generally submitted **before the start of the financial year** or before TDS deduction.
* This certificate is valid for the financial year mentioned.
---
---
### 1. Can an employee request employer *not* to deduct TDS by submitting a declaration?
* **No**, an employee **cannot** submit a declaration asking the employer to *not deduct* TDS.
* The employer is **mandated by law** to deduct TDS as per income tax rules.
* If an employee expects a lower or nil TDS deduction, he/she can apply to the **Assessing Officer** for a **certificate under Section 197** for lower/no deduction.
* Employer can deduct tax only after considering this certificate.
---
### 2. Taxability on salary delayed and partially paid in a financial year
* Salary is taxable on **“earlier of the two”**:
* When salary is **earned** (due date basis), or
* When salary is **received** (actual receipt basis).
* As per **Income Tax Act, salary is taxable on the earlier of actual receipt or due date**.
* So, even if you receive salary after delay or partial payment within a FY, the entire salary **earned for that financial year** is taxable in that FY.
* You **cannot** pay tax only on the amount actually credited in your bank; you must declare salary actually earned in that year.
* This means you may have to pay tax on salary that is accrued but unpaid in the year.
---
### 3. Employer deducted TDS but not deposited, and no Form 16 issued — what can employees do?
* Unfortunately, if employer deducted TDS but **failed to deposit** it with the Income Tax Department, employees’ TDS credit will not reflect in their Form 26AS or tax records.
* Employer is responsible to deposit TDS and issue **Form 16**.
* **Employee’s options:**
* Still **file Income Tax Return** declaring the full salary income and TDS as per Form 16 or payslip.
* If no Form 16 is issued, declare income and **pay tax on your salary income directly** to avoid default.
* Keep all salary slips and proof of deduction to show intention of tax deduction.
* Employee can **write a complaint or representation** to the Income Tax Department or local jurisdictional officer regarding employer’s non-deposit.
* File a complaint with **labour department** for non-issuance of Form 16 or delay in salary payments.
* You can also **pay advance tax** yourself on expected salary to avoid interest or penalty.
---
### Regarding procedure to get **Section 197 certificate** for lower/no TDS deduction:
* You need to submit **application in Form 13** to the Assessing Officer of your jurisdiction.
* The AO will consider your estimated income, deductions, etc., and issue a certificate authorizing employer to deduct lower/no tax.
* Application is generally submitted **before the start of the financial year** or before TDS deduction.
* This certificate is valid for the financial year mentioned.
---
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