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Short TDS

Others 887 views 1 replies

Rajalakshmi

Independant Finance Professional

62 Points Posted on 16 April 2010

Hello All

Request a response for my query.

A nationalised bank fails to deduct tds on salary of an employee, for a particular financial year. They have neither deducted from the employee, nor remitted it to the government. IN the next financial year, they realise their error.

1. Can they deduct from the employee and remit it with interest to the govt, now?

2.How do they account for the entry, in their books?

3.How will they issue form 16? can it include the TDS deducted now?

4.Will this be an issue , when it comes to their statutory audit?

Appreciate all response.

Thank you

Replies (1)

Amir

Learner

4016 Points Posted on 19 April 2010

Dear Rajalakshmi,

Any excess or short deduction in TDS on Salary can be adjusted with subsequent payment during the same FY.

Since in ur case FY has changed so the above can't be done.

Now options for you -

1) The amount of TDS should be recovered from employee & deposited with interest to the Govt.

2) As far as treatment in the books goes, it will not be issue since on one hand u wil be geeting it from employee and on other u will be depositing it to the Govt. Interest part will be booked as expenses..(but the same will be dissaloowed for Income tax purposes)

3) Yes u can revise ur TDS return if alreday filed and can regenerate Form 16 by including this TDS amount.

4) Even if this thing attracts the attention of the auditors still it will not be an issue since these things happens in practical life and its not something which is a crime and auditee has rectified it;s mistake...so what else...no problem with that...