With the tax filing session for AY 2019-20 about to end, don't keep on waiting if you have not received your Form 16 yet, just file your return immediately on the basis of any of the documents mentioned to avoid penalty.
With just few hours left before the extended due date for e-filing of Income Tax Return (ITR) for the Assessment Year (AY) 2019-20 comes to end, Rita Pandey (name changed) was in distress as her previous employer, with whom she worked till January 2019, neither deposited the tax deducted at source (TDS) from her salary to the Income Tax (I-T) Department, nor provided her Form 16. Moreover, she has salary slips of only April and May to get the figures of gross salary and deductions.
She first tried to lodge her grievance at Government of India’s site for Centralised Public Grievance Redress And Monitoring System (CPGRAMS) having URL of pgportal.gov.in, but didn’t get suitable response. She then contacted the Central Board of Direct Taxes (CBDT) and was asked to lodge her grievance at https://www1.incometaxindiaefiling.gov.in/e-FilingGS/Services/ORM.html, the short URL of which the I-T Department has also shared on social media as https://bit.ly/2YgCyk3, to facilitate the process of lodging grievances. She promptly lodged a complaint stating that all the employees of the organisation, with whom she was working before, are in distress in absence of Form 16 as the Form 26AS available on the tax filing site also contains no information about salary paid and tax deducted.
But the key issue still remained unsolved is that would she be able to file her return without paying taxes again in absence of Form 16 and salary slips?
According to Dr Suresh Surana, Founder of RSM Astute, as TDS has already been cut from her salary by the earlier employer, Rita may file her ITR without paying tax again with the support of any document provided by the employer, like – appointment letter, increment letter etc containing salary break up or even on the basis of statement of the bank account in which net salary after TDS gets credited monthly.
The problem is not an isolated one for Rita and her colleagues, there are many organisations that exploit their emploees by not providing salary slips, Form 16 and by not depositing the amounts of TDS and EPF to the concerned departments.
“Employers are under statutory obligation to deduct TDS from the salary paid to its employees and deposit the same with government within the time frame prescribed under the Income Tax Act, 1961 (IT Act). However, in some cases employers though deduct TDS from the salaries paid to its employees but fail to deposit the same with the government. In such cases, credit of TDS deducted does not get reflected in Form 26AS of the employees on account of which employees face genuine hardship at the time of filing income tax return, as the tax has already been deducted from their salaries by the defaulting employer,” said Dr Surana.
Citing some cases, Dr Surana informed that this issue was discussed on September 24, 2018 by the Gujarat High Court in case of Devarsh Pravinbhai Patel vs. ACIT (Special Civil Application No. 12965 & 12966 of 2018) wherein the court held that, “If the deductor has deducted TDS and issued Form 16, the deductee has to be given credit even if the deductor has defaulted in his obligation to deposit the TDS with the Government revenue.” Similar views have also been upheld by Bombay High Court in case of Asst. CIT v. Om Prakash Gattani, reported in (2000) 242 ITR 638
“Therefore, if the employees have proof of TDS deducted from the monthly emoluments paid to them in the form of salary slips/ Form 16, they may file their income tax returns without paying any tax liability pertaining to income from salaries even if Form 26AS does not reflect any TDS deduction by the employer. In such a case, if any notice is issued by the tax department then the salary slips/ Form 16 / bank statement can be produced to substantiate deduction of TDS,” said Dr Surana.
“Additionally, section 205 of the IT Act safeguards the assesses in such cases where TDS has been deducted but not paid to the account of government. According to section 205 of the IT Act, the assessee cannot be called upon to pay tax on income if TDS on such income has been already deducted on such income by the payer. However, in order to take shelter under these provisions the employees may be required to maintain & produce evidence to substantiate deduction of TDS to the revenue authorities,” he added.
So, Dr Surana further said, it is advisable that in absence of any salary slip or any Form 16 from the employer, the employee may maintain adequate documentation which can include the following documents to take avail the remedy available under section 205 by substantiating deduction of TDS:
- Appointment letter/ offer letter
- Any document on letter head of the company stating salary break-up
- Bank statement in which the monthly salary get credited (net of TDS)
- Any other mail or other correspondences
So, with the tax filing session for AY 2019-20 about to end, don’t keep on waiting if you have not received your Form 16 yet, just inform your grievances to the I-T Department through the portal and file your return immediately on the basis of any of above documents to avoid penalty.