If you work and file Income Tax Return (ITR) every year, then this news is very useful for you. Many employees fill ITR only on the basis of Form 16 and Salary Slip, but many times it happens that the company deducts TDS from the employee’s salary, but does not deposit it with the Income Tax Department on time. In such a situation, TDS is not visible in Form 26AS and the employee may get a tax notice.
Recently, the Income Tax Appellate Tribunal (ITAT) has given a big decision in a similar case. The Tribunal clearly said that if the company has deducted TDS from the employee’s salary, but has not deposited it in the government account, then the employee will not have to bear the loss.
What is the matter of Byju’s?
This matter is related to education sector company Byju’s. According to the information, the company had deducted TDS of about Rs 1.49 crore from the salary of one of its employees, but did not deposit it in the Income Tax Department. It was told that this problem was not limited to just one employee, but it affected 23,621 employees of the company because TDS was not deposited, hence his tax credit did not appear in the employee’s Form 26AS. Later, when the employee filed ITR, the Central Processing Center (CPC) refused to give the benefit of TDS and demanded additional tax.
What decision did ITAT give?
The tribunal, while ruling in favor of the employee, said that if the company has deducted TDS from the salary, then tax cannot be collected from the employee again. The tribunal said that the entire responsibility of depositing TDS rests with the company. If the company does not fulfill its responsibilities, the burden of its mistakes cannot be placed on the employee.
What does the law say?
According to tax experts, Section 205 of the Income Tax Act protects employees in such situations. According to this section, if tax has been deducted from the employee’s salary, then the same tax cannot be recovered from him again. Apart from this, CBDT has also clearly stated in its instructions issued earlier that if TDS has been deducted but the company has not deposited it, then tax recovery action should not be taken against the employee.
What to do while filing ITR?
Tax experts advise that before filing ITR, always match your salary slip, Form 16 and Form 26AS. If TDS is not visible in Form 26AS, but TDS is deducted in your salary slip and Form 16, then there is no need to panic. The documents you have are proof that tax has been deducted from your salary. Also, keep the salary slip, Form 16 and bank statement of the entire year for the last 12 months. If the Income Tax Department asks any questions in future, these documents will be useful to you.
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