FORM 16 IMPORTANCE AND GUIDE FOR FILING INCOME TAX RETURN

July is the month when the taxpayer needs to discharge obligation of filing annual income tax return. In case of the salary holder the way is simple. They need to furnish the details of the salary and TDS deducted statement, if there is no other source of income.


TDS is deducted by the employer of the employee. The employer needs to deduct the TDS on the salary amount of the employee, and deposit it to the treasure of the central government. The employer also needs to furnish the TDS certificate in the way of form 16 to the employee.
 Sometimes, or may be in chance employer deduct the TDS on salary of the employee and fails to deposit it in the treasure of government. Also he doesn’t issue the salary certificate to the employee. Then the liability is whose?

In such a case in the Mumbai High Court, the case was Yashpal Sahni vs. Assistant commissioner of income tax; Sahni got the salary after deducting TDS of 660000. He also filed income tax return accordingly and claim for TDS refund of income tax according to income tax law. But when the return is checked by the income tax department, the TDS refund was denied and a demand of income tax was arisen of 12,73000 Rupees against Mr. Sahni.

This was because Mr. Sahni employer does not deposited the TDS amount in the government accounts. And moreover, no TDS certificate is issued.  Mr. Sahni appealed for rechecking the demand as he already paid the tax in the form of TDS. But the department denied his fact, as no TDS is deposited and no TDS certificate is issued to him. So the department again arose fresh demand of 17,90,000 rupees against his name.
Mr. Sahni has no option left to appeal the High Court. Mr. Sahni representative argued that TDS is paid by his client and if the employer doesn’t pay the amount, this should be recovered from the employer and not the employee. He also presents the proof like salary paid receipts  and bank statements.

 The court gives decision in the favour of Mr. Sahni. Court said that this is employer duty to pay the deducted TDS amount in the accounts of government. If the company doesn’t do so, the income tax department has the right to recover the amount with the interest and plenty.

High Court also give the explanation of Section 205 of income tax act that if the tax is paid at source, the taxpayer can’t called upon pay further tax. Court said that if the tax is deducted at source, the employee liability to pay tax ends to the extent of TDS paid.

Section 205 defines that there is no matter on the behalf of the employee, as the employer give him TDS certificate or not. If the employee paid tax in the form of TDS, his liability ends and he has the right of having TDS refund. It’s the duty of employer to deposit TDS amount in time and issue TDS certificate to the employee. In the absence of TDS certificate, the employee also has the right to get TDS refund.
So these factors should keep in mind for filing income tax return for saving time, harassment and a lot of energy.
- Keep your monthly pay slips in tact, as long as you don’t get Form 16 of the year.
- You can file your income tax return on the basis of monthly pay slips without getting Form 16 of the year from the employer.
- Employee can get TDS refund from the department even if the absence of Form 16.
- Getting Form 16 is not as important, and one needn’t to deposit taxes again for the sake of Form 16.
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