What if your employer refuses to issue Form 16 / TDS Certificate?

It is an obligation on the part of the employer to deduct TDS while making payment of any allowance or while issuing salaries to the employees above the prescribed limit stated under TDS Rules and income tax slabs. There can be several instances where TDS has to be deducted on a mandatory basis, for instance, TDS charged by Bank while making payment of interest to the account holder or where an employee enters into a transaction of house property, making payment of TDS on a house purchase. The TDS charged has to be deposited to the government and it is essentially required to be reported by the filing of a TDS  Return.

Filing Income Tax Return by salaried people – TDS Certificate (Form 16) ensures accurate filing of tax information, easy claiming of deductions and work as evidence support of tax deduction by the employer. Form 16 is also necessary for employees receiving a salary from multiple employers to file their ITR.

Need for Form 16 -TDS certificate

The TDS Certificate ( Form 16 ) shows all particulars of payments made to the employee, the tax amount deducted at source and the date of submission of TDS to government.

It is only on the basis of this certificate, that the taxpayer can claim the credit or refund of tax paid in excess by the employer to the government. Issue of TDS Certificate is necessary for certifying and verifying the actual amount of salaries paid for which TDS has been deducted.

It will also be required for

Issue of TDS Certificate mandatory or optional?

For any person deducting TDS within provisions of Income Tax at the time of making any payment in relation to any TDS specific activity has to issue a certificate to the effect for which the tax has been deducted. TDS Certificate defines particulars of the amount or rate of tax deducted with all other necessary detailing.

For employers deducting TDS from employee salary or deducting under Section 192, an obligation for the issue of a TDS Certificate under Section 203(2) has been prescribed, which should be issued on a mandatory basis.

In case, no TDS to be deducted from the income of the employee, the employer can avoid the issue of TDS Certificate or Form 16 to the employee.

Employer’s Neglect for Issue of TDS Certificate ( Form 16 )

To obtain TDS Certificate from the employers deducting TDS is a right of an employee. However, the employee to claim the TDS Certificate from the employer can go through legal means if he refuses to issue after deducting TDS.

On deduction and submission of TDS to government, it is the duty of the employer to issue a TDS Certificate to the employee stating all the particulars of tax deducted. For employers failing to issue a TDS certificate, a penalty of Rs 100 /per day of default under Section 272A(2(g)) has been prescribed.

Remedy for employees to claim TDS Certificate

The only remedy in the Income Tax Act to an employee to claim the TDS Certificate from the employer is to file a complaint with an assessing officer within his jurisdiction.

To locate and file a complaint to accessing officer :

  1. Go to https://www1.incometaxindiaefiling.gov.in/e-FilingGS/Services/KnowYourJurisdictionLink.html
  2. Enter your PAN and Mobile Number.
  3. Confirm OTP and check for the required details of the assessing officer near you.

For not -filing delayed filing or non-issue of TDS Certificate to an employee, the department provides certain TDS penalties.

For filing of TDS deducted out of employee salary, the TDS return has to be submitted to the department before the prescribed due dates. In case of non-compliance of TDS provisions, the accessing officer may charge additional penal interest or impose huge penalties on the tax deductor.

For the consultation of TDS matters, TDS Return filling, TDS deductions, talk to our tax expert at info@taxreturnwala.com