TDS refund by the employer

Dear Mukudhan Sir,

Plz check, there is no such subsection in Sec 193...

Please see below the  extract from Income tax ACT published by Taxxman.  I think this section is 192 (3). SORRY FOR THE TYPO ERROR IN THE ORIGINAL MESSAGE.

Section 192 (3) reads as below:

"(3) The person responsible for making the payment referred to in Sub-section (1) [or sub section (1A)] [or sub section (2) or sub section (2A) or sub section (2B) ] may at the time of making any deduction, increase or reduce the amount to be deducted under this section for the purpose of adjusting any excess or deficiency arising out of any previous deduction or failure to deduct during the financial year"

The essential reading of this sub section (3) of section 192, allows the employer to refund within the financial year any excess tax deducted from the employee's pay.  Now with NSDL's quarterly returns do not accept any negative tax (refund) reported in the e tds form.  The e tds utility also do not validate such files. Eventhough the Income tax allows the employer to do a refund, because of NSDL's e tds utility, the employees are made to wait for the refund from the department.  This also causes unnecessary administrative work load on the dept., delay for the employees to get back the refund tax money.

Need the opinion of the esteemed members how they have overcome this problem.

Thanks

S Mukundhan

Dear Mukundhan Sir,

I hope this clarifies you:-

1) This provisions is not meant for refunding the excess deduction to employess, rather this aims at providing a flexibility in deduction since unlike other payments TDS on salary is not deducted at a flat rate rather slab has to be applied..

2) Where an Employer has deducted excess Tax and not only that the amount of excess deduction is that much that it exceeds the annual tax liability of the employee..In this case tell me one thing who is at fault is it the government or the employer..definately employer, therefore u cannot expect government to make provisions for such faults..

Eg:- Annual Tax Liability of employee comes around Rs. 60,000..this means that per month Rs. 5,000 should be deducted as TDS..but with this provision in some months deduction can be less than 5,000 while in others it can exceed subject to the fact that annual deduction will be Rs. 60,000/-...

THERFORE WHERE EXCESS DEDUCTION IS MADE THEN THERE IS NO OTHER OPTION BUT TO CLAIM THAT REFUND BY FILLING INCOME TAX RETURN OF EMPLOEES..

The person responsible for making the payment referred to in Sub-section (1) [or sub section (1A)] [or sub section (2) or sub section (2A) or sub section (2B) ] may at the time of making any deduction, increase or reduce the amount to be deducted under this section for the purpose of adjusting any excess or deficiency arising out of any previous deduction or failure to deduct during the financial year"