Income tax?

Question

I changed one job last FY. My employer deducted the tax on the income earned from 1.4.07 to 15.7.2007. They issued the income certificate. My new employer did not consider that certificate and deducted the tax based on income earned from 16.7.07 to 31.3.2008. The previous employer issued form 16 with the correct details. But current employer shown 25000/- less tax deducted that actual on form 16 and told that they will refund that amount and I should pay that tax now. Can any company do like this ? Also will I have to pay penalty for now for late tax payment(in July). Can I recover that penalty from my employer as this was not my fault ? My tax liability after all deductions/80c rebate comes at Rs.54000/- while cumulative tax by both employers as per form No. 16 is Rs.29000/- (with 25000/- to be refunded back to me by existing employer). Please advise what should I do ? What will happen if I file the returns w/o any tax payment ? Can IT deptt can send notice to my employer than me ?

Answer 1

Complete your income tax return Form ITR-1 or ITR-2. Compute your tax and then calculate tax due after deducted the TDS collected on both the Forms 16.

If the tax is due, pay it. You will also be paying interest.

Even if the income tax department, sends notice to the employer, you must still pay the tax due from your pocket. Only question may be about the interest amount.

Sections 201(1A) and 206C(7). Failure to Deduct or Pay Tax at Source (TDS).

If the person responsible for deducting tax at source or after deducting the tax fails to deposit the same as required, he is required to pay interest at the rate of 1 per cent for every month or part of a month comprised in the period from the date the tax was deducted to the date on which the tax was deposited with the Government. Also the quarterly TDS return can not be submitted unless the interest is paid.

Read this: http://mytaxes.in/index.php?topic=77.0

Answer 2

IF your employer has not dedcuted the TDs it is his fault and he will have to feel the heat of the law as now a days if TDS is not dedcuted on any of the expenses the personal responsible will be denied that expenses and the same amount would be added to the profit. That is not your headache.

Now let us discuss about obout your problem. Since your tax liability is 54000 and you have paid only Rs 29000/- the balance amount is to be pad by you. As per the norms one has to pay advance tax also if the tax liability is more then 5000/-. Hence you need to pay interest u/s 234A and 234B. Please not that if tax is not paid by 31st july then you need to pay interest u/s 234C also.

THere is no way to claim interest from your employer still you can request them and it will depand how much they need you.

Answer 3

It is indirect benefit to all from our income. So think of it.