As it may happen, your employer may have deducted the tax from your salary but has failed to deposit the same against your PAN with the government. If your employer is not paying heed to your complaints regarding the same, then you can approach the income tax department.
Abhishek Soni, CEO, tax2win.in, a tax-filing website says that the Central Board of Direct Taxes (CBDT) has issued certain circulars with respect to this in the past. The circulars state that in cases where TDS is deducted by the employer or deductor and the same has not been deposited with the government, in those cases income tax officers must not harass the employees (deductee) and the same must be recovered from the employers/deductors.
While filing your income tax returns, you have to calculate your total tax liability, then subtract the TDS from this and arrive at the balance tax payable which could be a refund, additional tax, or nothing at all. The TDS figure here is to be taken from your Form 16 or Form 16A (TDS certificates), as applicable. However, the tax deducted during the year (as shown in the TDS certificate) must also reflect in the department’s record in Form 26AS. Any mismatch in Forms 26AS and 16 allows the department to demand additional tax under section 143(1) of the Income-tax Act, 1961. This is because the TDS claimed as paid by you will not reflect in the department’s records. There may be cases where the employer does not issue TDS certificates at all and the employee comes to know of the TDS only via salary slip entries or short payment of salary.
“This can lead to litigation as an employee will claim that his tax has already been deducted by the employer and the same should be recovered from the employer. On the other hand, the department will claim that since the dues are pending against the PAN of an employee, it is the employee’s duty to pay his dues,” says Soni.
Check your Form 26AS before filing a complaint
It is advisable for every person, whose income is subject to TDS, to check their Form 26AS regularly during the year to ensure that all the tax deducted against their PAN is reflected in the form. You should also ensure that you have provided your correct PAN details to your employer. Otherwise, the employer may have deposited your TDS against the wrong PAN, i.e., into the account of the person to whom that PAN belongs.
A company files its TDS returns on a quarterly basis. The due date for filing TDS returns is one month after the end of a quarter, with the quarter ending March 31 being an exception. The due date for filing of TDS returns for the quarter ending March 31 is May 31. It is advisable that an individual checks his Form 26AS after 10 days of the expiry of the due date.
Thus, before an individual approaches the tax department to complain about his employer not depositing the deducted TDS, it is important that he brings this mismatch to his employer’s notice and request the employer to correct the same.
There is no specific timeline mentioned in the income tax laws which states by when such mistakes must be rectified. However, it can take 30-45 days to reflect the deposit of TDS in the Form 26AS, depending on the efficiency of the company’s (employer) accounts department, says Soni. However, even after repeated request, if your employer fails to take action regarding this, then you can file a written complaint to your assessing officer (AO).
Locating your assessing officer
1. Visit https://incometaxindiaefiling.gov.in/e-Filing/Services/KnowYourJurisdictionLink.html
2. Enter your PAN and mobile number. An OTP will be sent to your mobile number.
3. Enter the OTP received. It will re-direct you to another page showing details such as the address of your AO, email ID etc.
If you know the PAN of your employer, then you also have the option to file the complaint with your employer’s assessing officer. The above-mentioned link does not require the same mobile number to be entered which is registered with the PAN.
Soni says, “There is no specific format on which compliant needs to be filed. A person can file his complaint on a plain piece of paper.” To support your grievance, you must also attach the following proofs:
1. Salary slip showing deduction of TDS;
2. Copy of Form 26AS not reflecting the deposit of TDS;
3. Copy of letter written to your employer pointing out the discrepancy;
4. Form 16, if available.
What if TDS not deposited is discovered at the time of filing ITR?
If you discover that there is a mismatch in Forms 16 and 26AS at the time of filing your ITR, then you can file it on the basis of the TDS deducted as shown in the salary slip or Form 16. Along with that, you must also bring the discrepancy to your employer’s notice. If the issue is not resolved, say within 30 days, you can write your grievance to your assessing officer to explain your case, says Soni. On administrative grounds, normally, the lower authorities will not give credit for the TDS not paid by the employer.
As per the income tax rules, it is the duty of taxpayers to pay any shortfall in tax liability. Therefore, if the department does send you an additional tax demand notice, i.e., 143(1) after filing the ITR (despite you pointing out of non-deposit of your TDS by your employer), you will have the option to file an appeal to the Commissioner of Income Tax [Appeals]. The commissioner will decide the case on the basis of the facts of the case. If you do not wish to appeal, then your only other option is to pay the tax demand yourself, adds Soni.