One of the employee who was transfered to another Division of the Company whose pay details while forwarding to that Division, an amount of Rs.50,000/- payment made to him as Leave encashment as well as Rs.10,000/- TDS deducted not mentioned in that, resulted in Form -16 issued by that Divsion with incorrect picture. Now the employee on getting IT Notice from the IT Department asking to revise the FORM -16. FORM-16 was not issued from my Station as he was transferred by the middle of the year and it was issued by the counterpart at Kolkatta Divison. Though the LPC issued was wrong from my station, susbeqnetly it was intimataed to the Kolkatta Dvision about this, revised FORM-16 has to be issued by them or not? They were pointing out that it was mistake on our part and hence this we have to settle. Rs.10,000/- deducted from the X employee, the IT return was filed correctly and the same was reflcted in the 26AS of the individual. The individual was asking for a revised FORM -16. Who will be issuing this?Is not the Form-16 who issued has to revise or not? What is our role in that?
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Revised form -16
HI Ramakrishna raju
There are two options.
(1) Since the assesse has filed the return you can ask the employee to pay the difference tax which is raised by it department on account of including extra 50000.
(2) IF NOT
(a) The question of who is liable to deduct tds arises. If the both the departments are having same tan number then you can ask kolkatta dept to deduct extra tds on 50000 and ask them to revise their tds returns. If both the departments are having different tan numbers you are liable to deduct tds and give form 16 seperately.
In case 2 your company is liable to pay late payment interest also.
Hi
Also note, leave encashment is subject to exemption!
So you should also give exemption on leave encashment paid & TDS to be calculated accordingly. Whole of 50K paid towards leave encashment wont be subject to TDS.
Thanks//VaibhavJ
| Originally posted by : @ VaibhavJ | ||
 |
Hi Also note, leave encashment is subject to exemption! So you should also give exemption on leave encashment paid & TDS to be calculated accordingly. Whole of 50K paid towards leave encashment wont be subject to TDS. Thanks//VaibhavJ |
 |
Vibav Kindly note Leave encashment is exempt only at the time of retirement.
Pl refre: https://www.indianexpress.com/news/leave-encashment-on-resignation-is-not-taxable/1033242/2
even if Leave encahsment paid on resignation is exempt.
Thanks//VaibhavJ
| Originally posted by : @ VaibhavJ | ||
|
Pl refre: https://www.indianexpress.com/news/leave-encashment-on-resignation-is-not-taxable/1033242/2 even if Leave encahsment paid on resignation is exempt. Thanks//VaibhavJ |
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Vaibhav Please note here the employee is not resigning. Shouldnt we reply on the basis of situation given?
Dear R.Vishnuprakash,
I had replied to your querry!, and also his query was already answered.
Re-iterating, since employee belongs to one company, its company liability to deduct TDS so which division deducts TDS is no issue also Form 16 should be revised so as to enable employee to revise Form 16.
Before issuing form 16, ETDs return for that quarter should be revised so that Form 16 can be downloaded from traces site.
As far as TDS on leave encashment is concerend, TDS is required to deducted since it was paid to employee while he was on service.
Thanks//VaibhavJ
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