For the year of 2018-19, an employee has monthly salary of Rs. 35,000 and TDS has been deducted for April and May (Rs. 1500 each month based on Annual CTC). The TDS has been deducted approximately awaiting investment declarations from the employee. If the employee resigns now, will the TDS deducted be refunded along with last salary (since the income for the year is less than taxable amount) or carried forward to the next employer?
Dear ANNONYMOUS Friend,
The TDS deducted from salary is to be remitted in Income Tax account within stipulated time. If it is so far not remitted then you can refund it and keep proper accounting of it. It will be your decision whether to refund it to the employee or not when it is not remitted in IT account.
When you remit the TDS in IT account then the employee is liable to follow as under:
As per Rule 26A of Income Tax Act the employee while joining new employer in the middle of the year require to submit Form 12B to his new employer. This form contains the details of income earned by him from his previous employer & tax deducted by him at source.
Furnishing Form 12B & Form 16 is not mandatory, but it is advisable for every employee to furnish these details to the new employer or else he will have to require to self-compute his taxes and accordingly file the IT return.
If these details are furnished to the new employer, it becomes the liability of the new employer to deduct TDS on total cumulative salary received from both the employers - previous & new one.
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