Understanding TDS Deductions: What Happens When Employers Deduct Less?

To deduct TDS correctly, it is essential to follow the guidelines and regulations set forth by the tax authorities. If an employer deducts less TDS than required, it can lead to issues for the employee. Under-deduction of TDS may result in the employee having to pay the remaining tax amount at the time of filing their income tax returns, potentially causing financial strain or penalties for the employee. It is crucial for employers to accurately calculate and deduct the correct amount of TDS to avoid any problems for their employees.

The problem may not be for the employees as they get more for the present, only to cough up much more towards the end of the assessment year, but you (the Drawing & Disbursing Officer - DDO) could be in serious trouble for failing to do statutory deduction of taxes at source.