Employer liability to deduct tax at source

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Querist : Anonymous

Querist : Anonymous (Querist)

10 March 2011 what is implication if employer fails to dedect tax at source & Pay? In Such case can empoyer issue form 16 with tax payble amt.

SUNIL CHAUDHARY

SUNIL CHAUDHARY (Expert)
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11 March 2011 As per sec 201 of IT Act, if the employer fails to deduct tax or pay or after deducting fails to pay, the whole or any part of the tax,shall be treated as an assessee in default. HE shall be liable to pay simple interest,—

(i)at one per cent for every month or part of a month on the amount of such tax from the date on which such tax was deductible to the date on which such tax is deducted; and
(ii)at one and one-half per cent for every month or part of a month on the amount of such tax from the date on which such tax was deducted to the date on which such tax is actually paid.

Further, if no tax has been deducted or paid, employer cannot issue Form 16.