Help with TDS Salary please

$wap$ (Assistant Auditor) (189 Points)

17 May 2010  

Dear all,

Tax is not deducted from the salary income on monthly basis. The employer contends that the investment declaration forms are circulated in the month of March and only after assessing  the investments made by the employees, tax is deducted in the months of July, August and September. My contention is that tax must be deducted on a monthly basis as per para 6.4 of the circular 1/2010. Refer


Can anybody help me on this

1. whether practical problems faced by the company will be taken cognisance of by the IT dept for not deducting TDS on monthly basis?

2. what would be the penalties in doing so?