Dear all,
Thank you all for responding to my post dated July 1, 2016 which was basically a continuation of my original post dated June 15, 2016 in regard to whether TDS certificate (Part B) can be issued to such employee who doesn’t have taxable salary income. It is necessary to inform you all before I respond to the points made by you that “Form 16 Part B can not be generated from TRACES Portal. It has to be prepared manually by employer even in case of Tax deducted. Only PART A can be generated from TRACES Portal.” I refer circular No. 4/2013 [F.No.275/34/2011-IT(B)]. Dated 17-4-2013 point No. 2.4, in that regard. You will find software is available in the market to generate Part- B. In view of the above, if we start discussing whether we can issue a Part B to any employee on demand who doesn’t have taxable salary income, the answer is YES, since it has to be prepared by the employer only and I think doing that employer will never be prosecuted as expressed by some of the member.
Mr. Jeevarathnam P – I never asked employer to compute an employee’s tax liability combining his Salary income with his Income from other sources and deduct Tax. I only wanted to know how that employee can prove his quantum of salary income while he will file his return on his own since he is having income from other sources. I agree with your view that there will be hardly any company willing to compute total Tax liability of individual employee and in fact I believe employers are permitted to deduct TDS on income under salary head only, as per the provision of the section 192B. I welcome expert view on this issue.
Mr. Devesh Chauhan _ Are you sure that Form 12B is the format where an employee disclose his other income and saving details to the employer. As far as I understand that Form 12B is the format for the new employee joined with a new employer in mid of a FY shall submit Form 12B which consists of his income details with his previous employer and there is no scope to declare his other income if any. Kindly confirm if I am right. A copy of the Form 12B is enclosed herewith for your ready reference.
Mr. Saswata – Hope now it is clear that Part B can be issued without any complications to any employee on demand, irrespective of tax deducted or not as far as salary income is concerned. I refer the post of CA Nilay Shah on June 11, 2013 in this regard.
I wonder how an accountant will maintain his books of accounts as advised by you. Suppose an employee is having a combined income of Rs. 9.25 lac out of which income under the head salary (which includes salary, bonus incentive etc.) is Rs. 3.25 lac and Rent received Rs. 6.00 lac declared to employer as suggested by you. This employee has submitted his savings details u/s 80C (PF, LIC etc.) Rs. 1 lac and mediclaim Rs. 7000.00. How the taxable income will be computed and how much TDS will be deducted on his combined income. A few queries are also coming as under.
a) How his Rental income shall be collaborate in to his salary income.
b) Under which section/s TDS will be deducted and what will be the percentage of such deduction. Salary TDS comes u/s 192B and Rent comes u/s 194I. Will you issue 2 separate TDS certificate both Form 16 and Form 16A.
b) How the rent received personally by the employee from third party shall be booked in the company books of accounts, then payment entry as rent paid to the employee and TDS deducted @ 10%. Or otherwise how this TDS on rent (received by the employee personally) shall be deposited and accounted in the company books of accounts.
Could you please clarify since I am not good in accounts.
At the end somebody may think it is not worth writing so vast and it is wasting of time, but I think everybody should be very careful to post anything so that a wrong message should not pass since it is a public forum and lot of people are learning lot of things as I used to do.
Thanks & regards to all.