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Salary not paid but being shown in form 26AS

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Jayesh Saha

Doctor

23 Points Posted on 18 November 2020

I joined a new company in September 2019. As per my joining rules, I had to forego 1 month salary If I resigned from the company without serving a mandatory notice period of 1 month. Since I did not serve any notice period, the company did not pay me 1 month salary. However, in my 26AS form, I can see that the company has filed an income tax return against the salary not paid to me also. That is, the total gross income recieved from the company by me INCLUDES that 1 month salary that was not paid to me. So now I have to pay taxes on extra 1 month salary that I am never going to receive. I wanted to ask, is this OK? Are companies allowed to do that? If not, what is the legal recourse I can take?

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Quick Summary

An individual has discovered that their Form 26AS includes a month's salary that was forfeited due to not serving the notice period, and therefore never paid. This means they are being taxed on income they haven't received. The discussion seeks to understand if this practice is legal and what recourse is available, with advice suggesting the company should revise its tax filings or pay the salary, and to report incorrect TDS credit to the income tax department if the company refuses.