Income tax - employer liability for tds

Regards to all peers

 

I have two queries regarding TDS.

Q 1. Is the employer is liable or is it obligation of employer to get the investment declaration form (prospective investments) from employees at the begining of FY. If yes then where it is mentioned i.e. in ACT, CIRCULAR or NOTIFICATION?

 

Q 2. If employer deduct TDS on the basis of above mentioned prospective investment declaration, then if at the end of the year declarations differs from actual investments made, there will be definite chances of TDS short / excess deducted in earlier months. Then the question arises that is employer liable to pay the interest on TDS short deducted for earlier months?  If yes then where it is mentioned i.e. in ACT, CIRCULAR or NOTIFICATION? (we have so far received such notices from IT department)

 

Hoping to get appropriate answers for above mentioned queries.

 

Thanks & Regards

CA. HIMANSHU VERMA

PH: +91-8010374944

Replies (1)

Dear friend,

it is the duty of employee to furnish the investment proof/ declaration to employer, otherwise employer will deduct the tax without considering investment/deduction allowed under chapter VI A, further, to get the exemption of HRA, it is obligatory for employee to furnish its employer rent receipt issued by enployer, if HRA exceed 3000pm.

2 For answer of second question, please SEE Section 192(3)or HERO Honda motors ltd vs.ITO 2000.

provide that interest will not be charged u/s 201.

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