TDS deducted by current co. on probable income from previous

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

17 November 2010 Dear Experts,

This query is related to TDS deducted by private companies on salaries.
Its like this :-
During the financial year 2010-2011 -

My friend was without a job for 3 months(April'10 till June'10)
He joined a company on 1st July 2010 and is working there since then on a gross salary of Rs.34K (The only deduction there he has is Rs.780/- as EPF.
Since he didn't want to show break in his service, he tried to cover up the same by mentioning in his CV that he was working in the previous company during the break period (Apr'10-Jun'10).
Now his present employer is asking if any TDS deduction has been made, my friend then informed the accounts department in his income and investment declaration that he has no income during the period Apr'10-Jun'10.
The accounts department says to my friend that as per the employment records, he has shown working, hence must have earned income from salary and is therefore liable for TDS deduction.
Please guide as to :-
1.How my friend can save himself from this undue TDS deduction ?
2. Can the present company forcibly deduct income tax even if he gives a self declaration of no income during this period ?
3. In case, the present employer deducts TDS on the unrealised salary, can my friend file for a reimbursement of the excess tax deducted while filing his income tax return ? If yes, what is the procedure.

Would be highly obliged for experts' advice on this subject.

Regards

CA.Madhusudan B.P.

CA.Madhusudan B.P. (Expert)
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17 November 2010 1 & 2 When you informred & submitted that you were working in a organisation, How can you defend that there was no salary?
You cannot declare to the present emoloyer that there was no income from Salary.
Since you have coverup the 3 months for umemployment, you are suppossed to show the salary as YOU DECLARED THE SALARY IN THE PREVIOUS EMPLOYMENT.(PAYSLIP ETC.,)

3.There is no excess tax deducted from your salary, its based upon the total earning from salary both from present & previous employer.There shall be no question of Excess TDS & claiming refund.

Querist : Anonymous

Querist : Anonymous (Querist)

18 November 2010 Sir, there are some points which still remain unclear.

1. Then why does the current company ask for a declaration of investment and income from previous employment separately ?
2. Yes, my friend has given a document showing salary structure of the previous company w.e.f. 1st Arpil 2010. and a salary slip of May 2010 and no other document showing any proof of income except what is written on his CV.
3. Still the current employer based on the declaration given on his CV, has a right to deduct the TDS ?

The TDS should be deducted based on the actual earnings and not on presumed income, am I right ? How can it be proved that the employee has received salary for 3 month period when there are no financial records to trace (even in case, he has taken salary in cash) ?

Kindly explain.

Regards

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CA.Madhusudan B.P.

CA.Madhusudan B.P. (Expert)
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18 November 2010 Debashis,
1.The details regarding Salary for 3 months, PT, TDS, Exemptions U/s 10 Etc., shall be considered in the current employer for the purpose of determination of tax & deduction to be made by the curretn employer.
2.As for as salary declaration is enough, if you have any other income (house property loss, Interres on loan) shall be disclosed.When the salary structure & pay slip are given to the present employer, that itself will act as income from your previous employer, and accordangly he would also give the effect of the same in current form 16
3.It is not based on declaraion in your CV, it is because of submission of payslip & other details etc., though there is NO ACTUAL SALARY /INCOME RECEIVED, YOU WILL HAVE TO SHOW IT AS YOUR EARNINGS.
There is no question of presumed incomei n your case, it is actual income earned (if not actual But atleast in the eyes of law, as you yourself declared & submitted the salary slips etc., to present employer.

You cannot say there are no financial records to prove that you have not received salary, AS YOU YOUR SELF HAS DECLARED & SUMBITTED THE SALARY SLIPS.