Tax deducted at source (TDS) from your salary or any other income must be deposited with the government within a certain specified time period. However, a recent scam of Rs 3,200 crore unearthed by the income tax department has highlighted the problems faced by many individuals and employees.

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 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 quarter ending March 31 being an exception. The due date for filing of TDS returns for 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 complaint 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 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.



23 COMMENTS

  1. Non deposite of tds must be the liablity of deductor because the authority to deduct the tds to the deductor by the i.tax deptt

  2. I work in a private sector. We have a form of income tax returns filled every year but we are not given any information related to this. We have more income from other company employees but they do not fill any income tax form. Please, please give me full information on income tax, how much salary has to be paid if you have a salary.

  3. Sir,
    What if the employer has not paid salary at all for a certain period of Financial Year . In that case no Tax is deducted. Salary is pending and since the IT return has been filed , what and on whom the tax liability will come? Employees are innocence in this case!
    Please reply to my email. Will be thankful.
    Regards

    • If the due salary is paid in the next financial year then it will be the income of that year. Tax deduction will be done accordingly. It becomes inconvenient for the employee as the extra income shoots up the income tax.

      Hope this clarifies..

  4. what happens in case where employer has deducted the TDS and credited to the central government that too after 2 / 3 Years. Can I get the refund of TDS deducted?

    What should I do in this case??? Can you please enlighten me in this matter.

  5. Dear Sir,
    You have mentioned circulars from CBDT on the subject of TDS been deducted but not reflected in 26AS/ not deposited with GOI. I will be grateful if you could provide letter numbers of some of these circulars.

    Regards
    CS Murari

  6. Respected Sir/Madam
    I already have re-deposited the tax of amount Rs1230 on 30th March 2018 as per your calculation.
    Thanks

  7. Can you please suggest or Write an article on ” What to do if your EPF is not deposited with the government “.

  8. Thanks for this wonderful information.
    My Income tax had been deducted by my prevous ECompany M/s DuncansAGRO iNDUSTRIES . kOLKATA.
    They have not deposited the deducted income tax with the Govt and also not given me the FORM 16. I had to pay the tax again for the teay 2016/2017.
    Kindly advise.
    Regards David E Frank

  9. it must be duty of employer to deposit TDS in time to income tax authorities and employee should not suffer for such default. A penality be imposed on non deposit of TDS in time to make the system transparent and avoid scams to the tune of thousands of crores being done by employers by not depositing TDS deducted. It is better to deposit TDS monthly by employer to income tax deptt instead of quarterly. say for TDS deducted in march should be deposited by 15th of april and with panality by 30 days only. huge amount of TDS deducted are kept by employers for months and they earn interest on that amount with no use to income tax deptt and employees. there needs to be urgent action on this point

  10. in many cases credit for TDS as appearing in form 26 AS has not been fully considered and demand raised against the assesses

  11. I Have one doubt sir, the TDS is reflected in form 26 AS. While I filling return in ITR form, the TDS is column in ITR is empty. Actually how many days taken it reflect in ITR form (i.e TDS)

  12. INCOME TAX DEPARTMENT OFFICIALS ARE SHOWING FAVOR TO EMPLOYER FOR NOT REMITTING THE TDS MONEY OF EMPLOYEE RATHE. THEY ARE PENALIZE THE EMPLOYEE IN CASE OF TDS CASES ULTIMATELY EMPLOYEE IS THE SUFFERER AS MOST OF THE EMPLOYER IS NOT GIVING SALARY SLIPS SHOWING TDS HENCE EMPLOYEE CANNOT FILE THE COMPLAINT AGAINST EMPLOYER BECAUSE MOST OF THE EDUCATIONAL INSTITUTIONS ARE MANAGED BY POWER FULL POLITICIANS IN INDIA

  13. sir, I am retired employee of Kendriya Vidyalaya Sangthan (Min.of HRD)New Delhi.As per my pay slip regular TDS was deducted from my salary.After my retirement I am receiving that I have not paid the TDS as per my form 16 the PAN number is in correct during 2011-12,2012-13 I approached many times the office of Income Tax and submitted letter regarding the above.Till today no action is taken by employeer and income tax office.

  14. Sir , please take action on Mantri Developers Pvt LTd, they havent deposited nor TDS OR any PF amount of the employee…If we question they tell , you can file case on us, the case will go almost 4-5 yrs so you should only bear the lawyer fees

  15. Hello Sir My employer have given me form 16 from past 4 years and tax is been deducted from my side as per tax slab.
    I am worried and what action i can take please guide me as i am getting tax demand from IT department.
    Please guide me how to take legal action against my employer

  16. my employer has retained full salary of Apr-18 and May-18 as against tds deduction for fy 2017-18, but not yet deposited into the deptt nor they issuing form-16.
    Please Guide how can i file my tax return within the ue date.

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