Real Time Case Study

TDS / TCS 644 views 1 replies

Dear Sir / Madam,
 Pl analyse the following interesting real case study and revert back with your precious opinion as soon as possible.

A co absorb "C division" of B co on Oct,08. Uptill Oct,08 B co deduct and paid TDS on Salary for all the employees of C division and from Nov,08 to March,09 A co does Deduction and payment of tds on salary.
Now the issue is B co has short deducted and short paid the tds on salary for employees of C division and that shortfall now need to be paid by A co but there is a change in the tds provisions with effect from 1st April,2009 vis notificaiton no 858(E) dated 25th March,09.

Questions are:
1.What A co is legally bound to do?
2.Whether shortfall of tds on salary can be paid by A co in June,09 as they aquired whole C division of B co,If not, when and how can the payment is made?
3.If so, what is way to make such payment and which legal provision will rule that ?
4.Does there is any Interest which need to be paid by A co?
5.Your comments and suggestions to this case which is really happend with the co?

Replies (1)

Mr.Udit Agarwal

A company need not deduct the short deduction made by earliers employer of the employees.   No penal action will be taken against A company  for the apperant reason that it is not a defaulter in any way.

Employees in whose case short deduction was made by B Company will have to pay the tax u/s 140A.  Those employees need not pay any interest u/s 234B and 234C as held by various high courts for the reason it was the responsiblity of the employer to deduct tax at source from the salary.

Best Wishes

Sathikonda


CCI Pro

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