28 May 2010
A person has worked in an organisation for one month at a monthly salary of Rs. 1.50 lacs. He has not reported to employer the salary drawn from previous employer.The Company has not deducted TDS under Section 192 of the Income Tax Act as his total salary drawn from the Company was less than the Taxable limit. But Income Tax says that Company was required to deduct TDS on salary paid to employee. Income Tax says that you have to assume that had he drawn salary of 1.50 lacs in every month, his salary would have been 18 lacs in a year. On that basis company should deduct tax on average basis.
28 May 2010
Since he has worked for only one month, it is an evident that his income from salary from this co for the year is Rs.1.50 Lacs. The company cannot estimate his income after resignations from the job.
Since he has not reported any income of the previous employer, the total income can be treated as Rs.1.50 lacs, which is below the taxable limit.
28 May 2010
ITD view is right. The person who is getting Rs.1.50 Lacs , is not the fresher. He was already working anywhere. You have to request such person to provide details of form 16 of previous employer. If he is not provided then you have to assumed that the such person has drawn the same salary in last 11 months. Hence you have to deduct tds on it.
29 May 2010
My view is little bit different. In this case, its the employee who has to inform the present employer about his salary from previous employer. If he does not disclose, the present employer will not deduct the TDS on its own. TDS will not be deducted on any presumption, if he is above the taxable limit then his previous employer has already being deducting the TDS. So its the liability of the employee to inform to his new employer. If he does not then , new employer is not at default and the employee has to deposit the tax through advance tax or Self assessment tax.
29 May 2010
Agreed. Mr Bansal Ji with your view. In this case also, on joining the employee declares his other income and previous salary. So, I already said, if it is declared then TDS will be deducted. However, if no declaration then employer cannot presume as said above that it is presumed that previously also he is getting the same salary. There should be something from the employee which provides basis to the new employer for deducting TDS.
CAclubindia
