Form No. 16 Salary Certificate

TDS 14012 views 15 replies

Ashok Agarwal

46 Points Joined April 2007

Hi

One of the employee Mr. ABC has worked for X organisation for six months Apr to Sept 06 wherein he has received salary of Rs. 15,00,000 and claimed deduction of Rs. 100000/- and has paid the tax as per the workings fully.

Now Mr. ABC has joined Y organisation from October 2006, wherein he has submitted form no 12B declaring his previous income and other TDS details. The new organisation has deducted TDS on the salary paid to Mr. ABC at the maximum tax rates of 33.66% without giving him the benefit of intial exemptions as he has already availed the benefit initial exemption with the earlier employer.

Now Y wants to issue Form 16 to the Employee. Whether Y should issue salary certificate for the salary drawn by Mr. ABC for the period Oct- March 2007? and Y has to calculate tax liability at 33.66% only disregarding the intial exemptions?

Pls elaborate?

Replies (15)

Ca Deepa

61 Points Joined March 2007

As far as form 16 is concerned, Y can rightly give it in respect of the period served with them i.e oct-mar.

Initial exemption is also correctly disregardses as the same id already exhausted in the previous org.

And as sal income was 15 lacs previously, then Mr. X is already in the third bracket of tax i.e 30% + sur

So the steps of Y are correct

Ashok Agarwal

46 Points Joined April 2007

Dear all,

Nice of you for the reply

but what about one more employee

Income from previous employer Rs. 115000/- PF deductions Rs. 5000/-TDS deducted Rs. 1020/-

Income from New employer Rs. 165000/- and pf deductions Rs. 5000/-

New employer has deducted TDS of Rs. 30600/- correctly now how to show the same in Form 16

If the new employer shows his salary income as Rs. 165000 and pf deductions of Rs. 5000/- then tax liability on 160000/- in normal course works out to Rs. 7140/ only how to resolve this?

Pls reply

Ca Deepa

61 Points Joined March 2007

Mr. Ashok,

If the second employer deducts tax of Rs. 30600, then no problem. he will show total salary income in his return from both emplyers. 2nd employer in form 16 will show his salary part and full tds, and the ist employment details as" other income reported by the employee"