How Should Mr. X Handle TDS and Tax Exemption Documents for FY 2012-13?

I have a very simple query, I hope! Mr. X's income for FY 2012-13 was Rs. 2,20,000. Now, the company that he works for, for some reason, decided to submit the TDS only at the end of the year. At that time, Mr. X submitted documents showing investments of Rs. 21,000. The Accountant said that since the total effective income became less than 2 lac, Mr. X need not pay any tax.

Now, if that is the case, what would be the steps taken by the Company, the Accountant, and Mr. X? That is, what documents should all of them submit, and what documents does Mr. X get and/or apply to show that he was excused from the tax? I hope my question is clear.

Thanks and Regards, Megha, Vadodara.

Mr. X's income for FY 2012-13 was Rs. 2,20,000. After deducting an investment of Rs. 21,000, the net income of Mr. X is Rs. 1,99,000/-. In this case, he need not pay any amount on account of income tax.

Steps Taken by the Company

The company may issue a Salary Certificate to Mr. X instead of Form 16. The Accountant does not need to take any action regarding income tax. Mr. X may file a NIL income tax return using the Salary Certificate as proof of income.

Thanks and Regards,
Lokesh
Bhopal

Hi Lokesh, First of all, thank you for the simple and prompt reply. I really appreciate it.

Now, can you tell me: 1. What details should be included in the Salary Certificate? 2. Is it Form 16, 16C, or 16A? 3. Suppose the salary is Rs. 2,20,000 with no investment, and the company has deducted TDS for Rs. 20,000. Does the company still give out a Salary Certificate and/or Form 16?

I am asking because the company that I work for has not given anything to the employees who have crossed the 2 lakh bar. We know that TDS was deducted, but no documents were given to us.

Thanks and Regards, Megha

First of all, thank you for the simple and prompt reply. I really appreciate it. Now, can you tell me:

1. What details should be included in the Salary Certificate?
2. Is it Form 16, 16C, or 16A?
3. Suppose the salary is Rs. 2,20,000 with no investment. The company has deducted Rs. 20,000 for TDS. Does the company still give out a Salary Certificate and/or Form 16?

I am asking because the company I work for has not provided anything to employees who have crossed the 2 lakh bar. We are aware that TDS was deducted, but no documents were given to us.

You need to provide gross salary, investment made by the employee, and taxable salary in the salary certificate. Proof of investment should be kept as a record for future assessment by the TDS authority. You can also use Form 16, disclosing nil TDS.

If the company deducts TDS, they are required to issue Form 16. Please also check whether the same amount is being reflected in Form 26AS on the IT site.

Thanks and Regards,

Lokesh

If an employee is earning more than 2 lakhs per annum and is eligible to have TDS deducted from their salary, what documents does he need to submit to avoid TDS deduction? Please help in this regard.

TDS Documentation for Employees Earning Above 2 Lakhs

If an employee is earning more than 2 lakhs per annum and is eligible to have TDS deducted from the salary, what documents does he need to submit to avoid TDS deduction? Please help in this regard.

He has to submit his investment details such as PF, LIC, mediclaim, etc.

Regards