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TDS on salary from 2 employers

Vaishnavi (n/a) (52 Points)

18 July 2023

An individual shifted jobs mid-year. He has duly submitted details about total salary paid and tax deducted by previous employer in Form 12B to the new employer. However, the new employer failed to consider previous income for calculation of TDS on aggregate salary for the whole year. As a result there has been shortfall in taxes paid and now a huge sum as tax alongwith penal interest needs to be shelled out by the individual. Can the new employer be held responsible for short deduction of TDS and be asked to compensate for the penal interest?

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6 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (177801 Points)
Replied 18 July 2023

Which assessment year?

Whether assessee had filed the relevant ITR?

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Vaishnavi (n/a) (52 Points)
Replied 18 July 2023

This with reference to current AY 2023-24 for which I’m filing employees ITR now.

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (177801 Points)
Replied 18 July 2023

The assessee has to offer salary from both the employers under salary head, as the same would reflect in in AIS reporting. Tax liability would be same whether paid by TDS deduction or SAT, no penalty will be applied. Only interest would be levied for default in advance tax, which is very normal in practice.

No fault of employer as such, the responsibility lies over employee.

Vaishnavi (n/a) (52 Points)
Replied 18 July 2023

Yes sir. I did offer both the salary, paid balance tax with 234B & 234C interest and filed the ITR too. But after submission of Form 12B, generally people unaware of tax calculations rely on the company to take care of tax computations. They can’t identify by themselves if there is a short deduction because they trust the payroll department who’re knowledgeable in this regard and accept whatever TDS is paid by company. So Submission of form 12B alone serves no purpose. Henceforth will advise all my clients to double check & confirm with the new employer if they’ve indeed included income from previous employer also in tax calculation. Thank you.

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