Tds salary annexure in quarter 4

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

18 June 2018 While filing quarter 4- 24Q where we need to enter the advance tax paid by the taxpayers in salary annexure-II other than TDS we deducted for them.Please give your advise

Nikhil Kaushik

Nikhil Kaushik (Expert)
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18 June 2018 you dont mention advance tax details in Annexure II

Querist : Anonymous

Querist : Anonymous (Querist)

18 June 2018 I got a notice from tds department showing short deduction that amount exactly equal to taxes paid by the employees by themselves.

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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28 July 2025 In **Form 24Q – Quarter 4 TDS Return** (for salary), **Annexure II** contains the **salary and tax computation details** for each employee for the **entire financial year**, not just the fourth quarter.

Here’s what you need to know:

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### 🔹 **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**.

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### 🔹 **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).

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### ⚠️ **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**.

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### ✅ **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.

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### 🚫 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.

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### 📝 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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