TDS credit to be allowed to Employee even if not deposited by the Employer

Last updated: 09 December 2021

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Quick Summary

The Gujarat High Court has ruled that employees are entitled to claim credit for Tax Deducted at Source (TDS), even if their employer has failed to deposit this amount with the government. The court stated that the Income Tax Department should pursue recovery from the employer under Section 201 of the Income-tax Act, 1961, rather than denying the credit to the employee. This decision ensures employees aren't penalised for their employer's non-compliance.

Court :
Gujarat High Court

Brief :
The Hon'ble Gujarat High Court in Kartik Vijaysinh Sonavane v. Deputy Commissioner of Income Tax [R/Special Civil Application No. 6193 of 2021 dated November 15, 2021] directed the Income-Tax Department (“the Department”) to allow tax deducted at source ("TDS") credit to the assessee, even if the same is not deposited by the employer. Further held that, where tax has been deducted by an employer but not paid to the Central Government, the Department should resort to Section 201 of the Income-tax Act, 1961 ("IT Act") to recover TDS from the employer.

Citation :
R/Special Civil Application No. 6193 of 2021 dated November 15, 2021

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