I tend to agree with Saswat.
Just because someone's salary software lacks certain provisions; does not mean that any THEORETICAL amount be considered as Gross Salary of the person. For example in the hiring CTC statements lots of things are added as Salary components, but never given.
For example, if INCENTIVES is given as Rs. 500,000 p.a. on fulfilment of more than 100% targets; and the company as well as the individual achieves only 50 % and thereby gets only Rs. 200,000 which means penalized by Rs. 300,000. Does it mean that the FULL AMOUNT of Rs. 500,000 be shown as his INCOME ???
If this be so, then Income Tax at source should also be deducted on such FICTITIOUS incentive income in full, too.
This is the reason that employees who separate during the year, have their Form 16; containing their Gross Salaries as that of the whole year, as if they had continued service till the end of the year.
The software, the FULL SALARY DATA is fed once, and the same data is without any change or rectification/modification is used till the end of Financial year; thus resulting in displaying the TOTAL GROSS SALARY in the Income Tax Statements.
Please refer to this thread :
https://www.citehr.com/467783-false-...ml#post2082808
The problem lies with such Software and not the Income Tax rules; and this has to be rectified. If an employee is not paid any amount for whatever reasons by the Employer; then how can he be asked to pay Income Tax on it ??
I am certain that this is a bug, or a matter that escaped the attention of software developers; Or, there must be Codes/system to reconcile and rectify this type of errors.
It appears as if the Software have been designed keeping only the employees on roll/service in its scope, and there are no sufficient provisions built in for eventualities such as correct/rectified Form 16 for employees who left service mid year.
Warm regards.