Issues with Background Verification Agents
These are the main issues with background verification agents. They can't ask an employer to provide an explanation for not deducting PF or TDS. If they do ask, it is not necessary for an employer to respond to such questions. In my opinion, the employer should not respond because the background verification agency is not a statutory body authorized to ask such questions. They should only seek clarification from the employee and, if satisfied, confirm or reject it based on the available evidence.
Reasons for Not Deducting PF and TDS
As the thread starter has mentioned, there are two reasons for not deducting PF and TDS. First, if your salary at the time of joining the company was more than Rs 15,000, you could be considered an excluded employee. Second, if your salary did not fall under the tax brackets, there was no need to deduct TDS and generate a Form 16. Now, Form 16 is system-generated and downloaded from the Income Tax website. In the absence of the employer furnishing the details of all employees, irrespective of their tax liability status, as a company policy, even Part B of Form 16 cannot be generated.