Penalty on Employer For Not Depositing TDS

Employers are required to deduct income tax at source (TDS) from employees and deposit it with IT department on or before 7th of the next month following the month for which TDS has been deducted. For the month of march it has to be deposited before 30th April.

If you are liable to tax as per the provisions of IT act then it is the responsibility of the employer to deduct TDS from your salary before paying it to you. If such amount has not been deducted and the whole amount has been paid to you then you need to pay tax at the end of the year after calculating tax on your own. You may end up paying penal interest for not paying tax in time. 

If TDS as deducted from salary has not been deposited to IT department and you have Penalty on Employer For Not Depositing TDSreceived salary after TDS deduction then employer will be facing penal provisions of IT act. Penalty of Rs. 200 has to be charged per day for delay in filling of TDS or TCS. In this case employee will not be responsible for any penal interest or amount.

Penalty of Rs. 10000 to Rs. 100000 can be charged on furnishing wrong information or failure to file collection statement within the due date.

IT department has also power to demand the TDS amount that has been deducted from employee’s salary with interest amount of 1% per month. IT department can also prosecutes rigorous imprisonment of not less than 3 months which can be extended up to 7 years with fine.

If form 16 has been issued to employee with the TDS amount showing as deposited then employee can file tax return by stating the TDS amount as paid.

If amount shown on form 16 is not matching with form 26AS then also employee can file his tax return with the amount specified in form 16 and file his income tax return. In this case employee has to keep form 16 with him, in case required it has to be produced before the assessing officer.

If form 16 is not issued then the employer can file tax return based on the salary slip available with him and retain all the salary slip. Income tax amount as mentioned in salary slip will be treated as tax deducted from your salary. You need not pay tax once again just because your employer has not paid it and kept it with him. In case it is asked, you can produce the salary slips to show it to the assessing officer that tax has been deducted from your salary. Tax amount has to be recovered from the employer.

Editorial Staff at Yourfinancebook is a team of finance professionals. The team has more than a decade experience in taxation and personal finance.