Assessee liable if employer fails to deposit TDS

SC Vasudeva

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I have been working for a private hospital and left the job in June 2017. My TDS has been deducted for April, May and June to the tune Rs 80,000. The TDS deduction has not been reflected in Form 26-A of income tax, which means this amount deducted as TDS has not been deposited towards my income tax deduction. What I should do? — Dr KS Johar

You have to approach your employer to find out as to when the return of tax deducted at source has been filed. If it has been filed late, you should wait for the amendment in 26AS. In case it has not been filed, it may be a case of non-deposit of tax deducted at source. In such a case, you have to approach the jurisdictional Commissioner of Income-tax for taking action against your employer. The employer can be prosecuted for the default and would also be subjected to a penalty.  It may be added that you would be liable to pay tax on your total income in case tax has been deducted by your employer but the same has not been paid to the Government of India.

Kindly compute my tax liability for the AY 2018-19 as per following details:

Pension from bank: Rs 3,10,000

Ex gratia on monthly basis

(Family pension of IAF): Rs 1,00,000

Interest from I-T department on refund (AY 2017-18): Rs 850

Interest from fixed deposit in bank of which TDS @10% Rs 59,673 deducted: Rs 5,96,726

Group medical insurance scheme of retirees: Rs 5,333

Donation to armed forces flag day: Rs 1,000

Savings bank interest from bank: Rs 4,044

PPF deposit u/s 80C: Rs 1,50,000

I am a senior citizen of 63 years. Please clarify whether standard deduction of Rs 15,000 is applicable in case of ex gratia on monthly basis (family pension of IAF).

— Ram Paul Sharma

Tax on total income of Rs 8,51,743 (Rs 10,11,620 – Rs 1,59,877) works out at Rs 82,758. Your net tax liability on the basis of figures given in the query works out at Rs 23,085 after adjusting the TDS amounting to Rs 59,673.  The above computation is subject to following assumptions:

• Ex gratia payment from Indian Air Force is not in the nature of family pension as defined in Section 57 of the Income-tax Act 1961 (The Act).  Section 57 of the Act defines the family pension as a regular monthly amount payable by the employer to a person belonging to the family of employee in the event of his death.  Accordingly, deduction permissible to the extent of Rs 15,000 or 1/3 of the family pension received, whichever is lower, has not been taken into consideration.
• Amount paid towards group medical insurance scheme of retirees has been paid by IAF to an insurance company towards a policy to cover medical expenses of the ex-employees of the Air Force and that the amount has been paid by a mode other than cash.
• Donation to armed forces Flag Day is covered under the provisions of Section 80G of the Act and deduction to the extent of 50% of the amount paid is admissible under the said section.