Advance tax liablity if no TDS is paid

Hi friends,

An employee has a tax liabilty of Rs.20,000. But the employer has not made any dedcutions by way of TDS upto Jan. but the whole was deducted from salary in February.  i hear Advance tax liabilty is the difference between Total tax liabilty -TDS, If so, will he attract interest under 234 section. My doubt  iswhen to calculate the advace tax liability? at the end of the financial year or in the middle?

Replies (3)

Dear Chankya,

In this case Interest u/s 234B & C will not be levid if employer deducts Tax  before the end of FY..Therefore No advance tax is to be paid by employee..

If Employer has not deducted Tax at all, then no doubt employee is responsible to discharge his tax liability on his own in such cases(along with interest), although nowhere it is mentioned but I have seen cases where interst is collected from the employer..

Chanakya Sir,

 

Interest u/s 234A, 234B, 234C, will not come, since for computing interest under there sections, we can claim credit for TDS remitted to our credit during the previous year.

 

Employee is only required to tell the employer his tax liability and the employer will pay the same as TDS from salary... hence 234C is not applicable for deferring advance tax...

 

But yes there is some difficulty cos assessee should extrapolate his income to get his tax liability correctly calculated during the previous year...

On this basis, he has to make the remittance by advance tax or TDS.... failing which 234C for deferring advance tax, and 234B for delay in paying advance tax becomes applicable

 

The interest u/s 234B, 234C, is worked out by

Final tax liability for the PY MINUS

TDS, advance tax paid, tax relief and rebates....

 

Interest to be worked out on balance figure only.....

Thank you friends. I hear that the employer in this case the drawing and the disbursing officer is solely responsible for deducting tax in respect of the income earned from salary and the employee is responsible for the remaining if he has income from other sources. Is it true ? if so, can any one give me the section of the act. Probably my friend Amir's reply suggest the same view when interest is collected fromt he employer.

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