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Tds deduction

09 April 2014

Hello Friends,

I give salary to my employee worth Rs.3,00,000 and I don't deduct any amount for TDS deposit. Now that person wants to file income tax return with deduction above Rs1,00,000 and net taxable income of Rs.1,94,000. Now as I don't deduct that TDS amount so how could I show that I gave him salary of Rs.3,00,000 without deducting any TDS. Is that person also find any difficulty in filing Income tax return?

Is there any option in software where we had to show TDS deducted or not deducted?

What should I do now? Please suggest.

Thanking You

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6 Replies

Income Tax Wala: (Fin. Expert) (Chartered Accountants) (2015 Points)
Replied 09 April 2014

there is no problem if you have not deducted TDS because actuallly there is not TDS liability arise on employee as he is having investment of more than 1 Lac.

so in this case there is no liability on company to deduct TDS but it is strongly advisable that company must have all proof of investment made by employee.

and employee will not have to face any problem in filing the ITR

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Arpit Pachisia (CA) (734 Points)
Replied 09 April 2014

Well what if there is no investment made and I gave him salary of Rs.3,00,000 and than I file some form like 15G/H. Is there any such form? Definately there will be, but than where do I show that on this amount of salary I had file such form or somewhat like that no TDS deducted and such form is filed.

Thanking You

SIVARAMAKRISHNAN P.G (CA final student) (129 Points)
Replied 09 April 2014

In this case if the employee have investment upto Rs 1,00,000 then no tax is required to be deducted as the total income of the employee odes not exceed the basic exemption limit.

If the employee does not have any investmets u/s 80C or any other deductions then tax is to be deducted if the company is liable to audit u/s 44AB in the immediate preceedign financial year.

Otherwise the salary will be disallowed as an expense.

CA Jitendra Chawla (Manager -Accounts & Finance) (94 Points)
Replied 09 April 2014

TDS u/s 192B is deductible only when estimated salary of employee exceeds minimum amount not chargeable to Income Tax. In the instant case estimated salary of your employee after deduction u/s 80C is below basic exemption limit. Hence No TDS is deductible.

Further, Form 15G/H is to be collected only when limits of TDS (upon exceeding whom TDS is to be deducted) exceeds but the recepient of income claims that receipt without deduction of TDS.Hence no such Form is require in your Case.

Arpit Pachisia (CA) (734 Points)
Replied 09 April 2014

Well I repeat my second question again, as while seeing suggestions it looks improper.

Forget about investment of Rs1,00,000 and I will give salary to my employee worth Rs3,00,000 without deducting any TDS amount on it. Now as employee doesn't want to claim back refund, so he wants to file some such form for non deduction of TDS.

Now my query is that while filing return, is there any option that no TDS has been deducted and that such form has been annexed. Which form do I fill for non deduction of TDS?

Hopes my question is quite clear this time.

Thanking You

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Dr. Krishna Prabhakar (Others) (35 Points)
Replied 10 April 2014

You have to deduct tax at source if the Salary paid is chargeable to Tax. Plesae refer to section 4(2) of the Income Tax Act. Please also refer to the judgement of the Supreme Court in case of Samsung India/ G E India. The onus of deducting TDS is on you and not a choice of Employee and you will be liable for Interest and Penalty