Hi, I represent a HRMS Service Provider IT Company. For few of our clients we have started an investment portals where, investment proofs are submited online ( scanned copies) by the employees, We Verify the Investments " Online" and update. We maintain the soft copies for future reference on Cloud Based Server. Now, the advise I solicit from all the Senior Subject matter experts is ... Is there a Non Compliance under any Act here ? If So how to regularize it ......Request suggestions ....
From India, Mumbai
Vidyesh Kul

The method you are specifying is for the convenience of the employees.

The method you proposed needs to check as per compliance and operational as below

The compliance issue you are concerned is, lies with the Employer. As per IT dept, the employer has to consider the proofs, compute tax, deduct at source and deposit with IT dept.

In this declaring Investments is responsibility of the employee. To address this, the employer needs to have a Self declaration from employee which usually states the proofs are authentic, complete and further allows employer deduct tax based on the proofs.

Check how you are managing this.

Then you are going to "Verify" and "Update" the Investments. I assume, this is due to if employee uploads incorrect documents erroneously or purposely.

Will there be any alert to employee about updates?

Tax department sends notice to employee if any clarification on tax is required,.

What will be your role in this situation when an employee needs documents of Investments considered in tax computation?

From India, Mumbai
Thanks Vidyesh !!

Yes , As rightly mentioned by you, we do follow the same process of Declaration by Employee, We deducting Tax basis declaration, Submission of Authentic documentation by Employee, We verifying the Authenticity and Rejecting & Communicating back to employee in case of discrepancy. Employee if doesn't satisfy the discrepancy then we deduct the Tax as per the liability barring the discrepant investment. From process per say its a convenience for managing huge employee base at larger geography. Remittancese & Filing of returns and further procedure is as per the provisions of IT Act. "

However, our concern is ... " Is there a legal / compliance objection in terms of doing the whole exercise on the web, maintain soft copies instead of papers on cloud server. " Does any Act specifies /prevents from maintaining soft copies of investments on cloud server.

eg..Although Time Punches are nowadays been captured using bio metric or swipe cards ... but Organisation need to have a written consent from ALC office.

From India, Mumbai

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