Tds salary annexure in quarter 4
Querist : Anonymous
Querist : Anonymous
Here’s what you need to know:
---
### 🔹 **1. Advance Tax / Self-Assessment Tax Paid by Employees**
* **Advance tax** or **self-assessment tax** paid **directly by employees** **must not be included** in the TDS return (Annexure II).
* TDS return is only for **tax deducted and deposited by the employer**.
---
### 🔹 **2. Why You Received Short Deduction Notice**
* The notice is **likely due to mismatch** between:
* **Total tax liability shown in Annexure II** (based on gross salary and tax computation), and
* **TDS amount deposited by employer** (excluding the tax paid by employee directly).
---
### ⚠️ **Important Point**
If you **show full tax liability** in Annexure II but only deposit TDS (excluding employee-paid taxes), the system will **expect you to have deducted the full amount** and show a **short deduction default**.
---
### ✅ **Correct Way to Handle**
You have **two options**:
#### ✔️ Option 1: **Do Not Show Full Tax Liability** in Annexure II
* **Only show the part of the tax** that **you (the employer)** actually deducted and deposited.
* Adjust the "Total Tax Deducted" in Annexure II accordingly.
* Do **not include the tax paid directly by the employee**.
#### ✔️ Option 2: **Include full salary and tax liability**, but also:
* Ask employees to **claim credit of advance/self-assessment tax** in their **individual ITR**, not through Form 16.
* In **Form 16**, show the **TDS you deposited** and mention separately if employee has paid any other tax themselves.
---
### 🚫 Do Not:
* Report advance/self-assessment tax paid by employees as TDS in Form 24Q.
* Link employee-paid tax to your TAN—it will **misrepresent actual deductions** and trigger defaults.
---
### 📝 Conclusion:
* TDS Return = Only report tax **deducted and paid by employer.**
* Employee’s own tax payments = For **ITR filing**, not TDS return.
Let me know if you want a sample Excel layout for Annexure II or how to revise the return to clear the default.
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