TDS deducted from employee not paid by Company

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A private limited company deducted TDS from employees for FY18-19 but failed to deposit it due to financial difficulties. This has led to a mismatch in employee 26AS statements, prompting a notice from CPC under section 143(1). While the company aims to deposit the TDS within a month, this timeframe may exceed the response period for the notice, potentially leading to increased tax liability for employees. Employees can rectify the situation once the TDS amount appears in their 26AS.

Syed

Syed (Querist)

24 February 2020 One private limited company deducted tds from employees for FY18-19 but till date could not deposit due to cash crunch faced by it. Meanwhile emloyees got intimation 143(1) from CPC for mismatch of 26AS credit. While the company is expected to pay the TDS dues within a month, Please guide how to respond to CPC notice.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

24 February 2020 One month time sought by company to deposit TDS may go beyond the time to reply for the notice u/s 143(1). Consequently. ITO will complete the assessment with out TDS amount ,meaning thereby tax liability will arise to the employee.
If things happens as above, the employee has an option to go for rectification after the TDS amount reflects in form 26AS.

Syed

Syed (Querist)

24 February 2020 Thank you sir for your response. Is there any time limit to respond to notice received u/s 143(1), it was saying only for payment it should be done within 30 days of receipt. Please advise.