TDS on salary not deducted at all
My client is a proprietorship company, has not deducted TDS on salary for any of the employees through out the year. No advance tax was even deposited by employees from their side as well. Now, what are the consequences, how to correct this default. Client says he cannot afford to disallow salary expenses, he is willing to comply with the law and do everything necessary.
Should i approach a CA for Form 26A Certificate ? Kindly solve the problem.
You can pay tds with interest and file tds returns for salaried employees whos salary exceeds maximum amount not chargeable to tax.
however you may deduct this tds from salary of employee
I assume you are talking about F.Y. 2013-14. TDS deduction on salary is compulsory where the employee's salary is above the maximum exemption limit. So first of all you should check where such deduction is required. Secondly, TDS on salary is to be deducted on payment basis and your client would no doubt have paid the salaries to his employees already. If however, March 2013 salary is still not actually paid you can deduct full tds from salary and deposit it before the audit and return filing of AY 2014-15 and then You can get the deduction of such salary expense. Income tax act allows flexibility in tds deduction on salary paid. This flexibility is allowed within the year only and the final adjustment of balance tds if less deducted is to be made good in march and is to be paid by april 30th of the next FY. No penal interest is required to be paid if such procedure is followed. There is no deduction in your case but still if you deposit tds before 30th apr 2014 there would not be an instance of penal interest as I have seen this procedure of deduction of tds on salaries once in a year in march only in many companies and no penal interest is charged on it upto my information. If I am wrong, requisite correction is welcomed by respected fellow members.