TDS on salary liability of company

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CA Anil Jain (Querist)
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04 July 2008 It is the liability of company/director to deduct TDS on the salary amount paid to the employees taking into considerationInvestment declaration made by the employee.

Now what will be the remedy for company when employee left the job in middle of the year without making investement and his TDS deducted falls short on his salary paid to employee for that period.

Rgds/-
Anil Jain

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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04 July 2008 There is no remedy. The person responsible for TDS can act only on the basis of actual investments and not on the basis of declarations.

CA Anil Jain

CA Anil Jain (Querist)
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04 July 2008 Tell me one thing
Investment is made during the year not at the begining of the F/Y. Then how can u deduct the TDS in April when he is going to made investment in december or after till the month of the march.

If The person responsible for TDS can act only on the basis of actual investments and not on the basis of declarations
Then Why Declaration is obtained from the employee at the begining of the year??

CA.Satinder Pal Singh

CA.Satinder Pal Singh (Expert)
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05 July 2008 As per section 192(1) the employer is liable to deduct TDS on salary on the estimated income of the employee under the head salary at average of income tax computed on the basis of rates in force. As per circular no. 11/2006 of CBDT rules to be followed for deduction of tds are made. which says that employer shall allow the deductions under section 80C,80CCC,80CCD(subject to max. of 100000). deduction u/s 80G will not generally be allowed by the employer.

CA.Satinder Pal Singh

CA.Satinder Pal Singh (Expert)
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05 July 2008 further comments are invited.

CA Anil Jain

CA Anil Jain (Querist)
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05 July 2008 What i m asking Mr. Pal that 100000/- investemnt company has taken into consideration while projecting employee's TDS Liability on the basis of declaration made in First of April, but if left the job before making invetment.
what is required to be done?
Whether issue Form 16 showing balance TDS payable???

CA.Satinder Pal Singh

CA.Satinder Pal Singh (Expert)
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05 July 2008 TDS in case of change in employment

Nowadays there is a heavy shift of employment. Many employees go on changing their jobs on a regular basis. Where the employee during the year has changed from one employer to another the circular provides for deduction of tax at source by such employer (as the taxpayer may choose) from the aggregate salary of the employee who is or has been in receipt of salary from more than one employer. The employee is now required to furnish to the present/chosen employer details of the income under the head ‘salaries’ due or received from the former/other employer and also tax deducted at source there from, in writing and duly verified by him and by the former/other employer. The present/chosen employer will be required to deduct tax at source on the aggregate amount of salary (including salary received from the former or other employer).

I THINK THAT IN YOUR CASE THE COMPANY IS NOT AT DEFAULT BECAUSE YOU HAVE TO DEDUCT THE TDS AS PER DECLARATION OF THE EMPLOYEE AS PER GIVEN IN CIRCULAR. THE EMPLOYEE CAN INVEST U/S 80C UP TO END OF THE YEAR. SO YOU WILL ISSUE FORM 16 AND TAKE IN TO CONSIDERATION 100000/- U/S 80C. REST CHOICE IS ON THE EMPLOYEE WITH WHICH EMPLYER HE WANTS TO DEDUCT WHOLE TDS.

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