Tds problem while changing company

TDS 725 views 2 replies

Samit

Analyst

42 Points Joined April 2012

Dear All,

I need an advice on a query related to my situation. In June 2011, I had joined a company with 2 months notice period as separation terms. But finding that the company atmosphere not suitable for me, I left it within a month. I worked for 25 days and informed them ( email communications records available) that I wish to discontinue and never went back. And from 1st July I joined another company.

I did not provide my bank accont details to the prevoius company. So basically, I did not do any transaction with the company.

But recently, I have found out that, the company has shown my two months income (which I did not receive) and TDS in the Income Tax records. which means as per their records, I had worked for 2 months with them.

This results in an increase of my tax liability (as per IT records) and also a scenario of double employment. Although the TDS has been deducted, but now considering it along with my annual income, I need to pay 30% on entire amount - which is much more than the TDS deducted.

When I requested to the company to reverse the entries, they denied saying that they will not reverse and the amount would be considered as - Two Months Notice period buyout amount.

Is the company legally correct in doing this?

Even if the separation terms include paying the full salary for two months, what should happen to the PF amount?

Do I need to pay tax on this amount?

Am I going to face any problem regarding dual employment?

Any other relevant legal/IT related observations/advices you would like to provide in this case.

Regards,

Replies (2)

CA Vineet Dubey

Accounts

160 Points Joined October 2009

1.I want to clear only that tax is leviable only income of salary if you have received salary or has been accrued.

2. if you can proove that you have properly resignen and you have such acknowledgement then you can claim such exemption otherwise no.

3.otherwise you can file a case to court to decide it.But it should be noted your syllabus will enhance with a new case law in DTL PAPER if you are student of CA Final.

Samit

Analyst

42 Points Joined April 2012

1.I want to clear only that tax is leviable only income of salary if you have received salary or has been accrued.

- I have resigned (sent resignation letter, also stating that I shall not be able to serve notice period) after 25 days of working with the company. But as per company records - I have worked for 2 months. So I guess salary was accrued. But it was adjusted against two months notice period that I was supposed to serve (as per joining agreements). So finally, I did not receive anything. Is tax leviable on my salary which has been adjusted against notice period - resulting in no income of mine? How is this amount treated by I-T Dept.?

2. if you can proove that you have properly resignen and you have such acknowledgement then you can claim such exemption otherwise no.

- I have sent email just before leaving, explaining the reasons and clearly mentioning that I shall not be able to work the notice period because of the circumstances. I have the email sent by me. But I received acknowledgement after 2 months.

Can I get exemption under this circumstances?

If I can, what is the exemption called? How to mention it in my returns filing?

3.otherwise you can file a case to court to decide it.But it should be noted your syllabus will enhance with a new case law in DTL PAPER if you are student of CA Final.

- I am not a student of CA Final.

Shall be grateful to receive answers.

Rgds,