salary tds.

This query is : Resolved

aravind (Querist)
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29 January 2010 Dear Friends,

Please clear my doubt.

The case stud is as follows,

Mr.X is an employee drawing a monthly salary of 50,000/-. The employer didn’t deduct tax for 9months (April 09 to December 09) because of ignorance of law. Mr. X has paid advance tax of Rs. 30,000/- on his auditors advice. Now I have been recruited in accounts dept. I want to deduct tax for whole year in these 3 months. But employees auditor is protesting that TDS cant be deducted for the period expired and also it will lead to double taxation if tax is deducted because he has paid advance tax.

Now my queries are.

1.Can TDS on salary be deducted for the period already over, is it viable according to Income Tax Act, 1961?
2.Is a salaried employee liable to pay advance tax?
3.Will the fact that employee has paid advance tax relax the liability of the employer to deduct tax at source? If so what is the procedure followed for it.

CA Prashant Gupta

CA Prashant Gupta (Expert)
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29 January 2010 in month of Jan-10 to Mar-10 you can deduct TDS from Apr-09 to Dec-09 as there is no problem and u/s 192 this is facility that you can increase or decrease TDS on salary every month. So TDS can be deducted in your case.
Advance tax provision is applicable on every person. But in case of salary person if he has no other income then TDS is sufficient. But if he has other income and he didn't declare it to employer then he should pay advance tax.
employer should deduct TDS on salary as per rules. there was a case in which it is decided that if employee paid full tax and employer didn't deduct TDS then no loss to revenue so no penalty on employer. But you should not take this as this is only applicable when you have defaulted and you want shelter. Sorry, I couldn't remember the case no and other detail so can't provide.
in your case if employee has already paid advance tax then after filing his return he can claim refund. you should talk to auditor and tell him that as per sec 192 it is your responsibility to deduct TDS there is no option to non deduction of TDS in Income Tax Act. if he not agree then tell him to provide case or notification in favor of his view.