Tds on salary

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This query is : Resolved

VIJAY S YADAV (Querist)

25 May 2012 Dear Experts,

I have a client whos tax amount was Rs 100000 in A.Y.11-12 and every month his TDS was getting deducted by his employer, so he was free of mind to pay advance tax. But now he came to know that due to less TDS payment by sept and dec by employer , he is penalised with interest under section 234 (c). so please help me with that for which whether his employer is liable or assess is liable? as he is deducted less TDS.

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)

25 May 2012 Where the assessee’s income is chargeable under the head “Salaries”, the person responsible for paying any income chargeable under the head “Salaries” shall at the time of paying, deduct income tax at source and failure on his part entails an obligation to pay interest under Section 234B of the Act in order to compensate the loss incurred to the revenue and that upon failure on the part of the employer to deduct tax at source, the assessee only becomes liable to pay the tax directly under Section 191 of the Act and does not become liable to pay interest under Section 234B of the Act.

VIJAY S YADAV

VIJAY S YADAV (Querist)

26 May 2012 Dear Experts,

Thanks for your reply but my question is that employer has deducted the TDS but he has deducted at the end of March because of which Interest under section 234C has been charged to assesses for non payment of advance tax on time. So kindly help me, in this case who is liable to pay Interest?

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)

26 May 2012 Dear Vijay,

Read section 192 carefully, Section 234C is not applicable for income from Salary.

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)

26 May 2012 Dear Vijay,

Read section 192 carefully, Section 234C is not applicable for income from Salary.

Section 192(3) says that the person responsible for making the payment of salary may, at the time of making any deduction, increase or reduce the amount to be deducted under this section for the purpose of adjusting any excess or deficiency arising out of any previous deduction or failure to deduct during the financial year.

Hence, it is illogical to say that section 234C will have implication for short payment of advance tax.

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