My TDS has been deducted by my employer but not deposited/not showing or reflecting in my form 26AS. What should you do? - Read on to know the solution.

TDS is deducted by the employer/payer of the employee/payee.
The deductor/employer needs to deduct the TDS and deposit it into the treasury of the central government and then file a statement called 'TDS Returns'. Once TDS Returns are filed by the deductor of TDS then the TDS amount will appear as 'Tax Paid' in the 26AS form of the deductee. The employer/deductor also needs to furnish the TDS certificate in the way of form 16/form 16A to the employee/deductee.
It is not uncommon today to come across cases where employer/deductor has deducted the TDS but has failed to deposit it in the treasury of Central government or has filed incorrect TDS Returns. Also such unscruplous Deductors neglect issuing salary certificates to the employee/deductees. The Million Dollar question here is WHO IS RESPONSIBLE FOR THE UNPAID TDS/INCORRECT TDS?

An identical situation for The Mumbai High Court to decide, was the case was Yashpal Sahni vs. Assistant commissioner of income tax; Sahni received his salary after deduction of TDS of 660000. He filed his income tax return and claimed TDS refund of income tax in accordance with the income tax law. When the return was processed by the income tax department, the TDS refund was denied and a demand of income tax 12,73000 Rupees against Mr. Sahni was raised.

This was because Mr. Sahni deductor had not deposited the TDS amount with the government. Moreover, inspite of requesting no TDS certificate was issued. Mr. Sahni appealed for deleting the demand as he already paid the tax in the form of TDS. But the department denied his appeal, as no TDS was deposited and no TDS certificate was issued to him. The department conveniently raises a fresh demand of Rs.17,90,000 against his name.
Mr. Sahni with no option left moves the Mumbai High Court. Mr. Sahni's representative argued that TDS was paid by his client and if the employer/deductor failed to pay the amount, this should be recovered from the deductor and the employee/deductee must not be penalised for faults of the deductor/employer. He also presented proofs like salary paid receipts and bank statements.

The court decided in favour of Mr. Sahni. The Court said that it was the employer's duty to pay the deducted TDS amount. If the company fails to do so, the income tax department has the right to recover the amount with the interest and plenty.

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

Section 205 defines that it does not matter whether the employer had issued him TDS certificate or not. If the employee had paid tax in the form of TDS, his liability ends and he has the right to TDS refund. It’s the duty of the employer to deposit the TDS amount in time and issue TDS certificate to the employee. Even in the absence of TDS certificate, the employee has the right to get TDS refund.
Following factors should be kept in mind for filing income tax return for saving time, harassment and a lot of energy.
- Keep your monthly pay slips intact, as long as you don’t get Form 16 of the year.
- You can file your income tax returns 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 in 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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