Absconding Employee and Form 16: Can Employers Withhold It Until Notice Pay Is Recovered?

Dear All Seniors,

Can the employer hold Form 16 of an absconding employee until the Notice Pay is recovered? Kindly guide on this, please.

No, it is not allowed. The employee can complain to the ITO who will take action against you.

Today, Form 16 does not matter. What matters more is that the amount appears in 26AS of the employee. Then, he does not need Form 16. The only way you won't find it in 26AS would be if it was not paid by the company to the government or if the TDS returns are not filed. Both are serious offenses that may involve prison terms.

Regardless of whether an employee is present or absent, the employer cannot withhold Form 16 for any reason. They are obligated to issue Form 16 by the 31st of May of the financial year following the year in which tax was deducted from the employee's salary. Failure to do so will result in the employer being liable to pay a penalty of Rs. 100 per day to the IT Department for each day of default. If necessary, you may lodge a complaint with the relevant Assessing Officer at the IT Department.