Suhas,
For 16 part B is an annexure to part A
If you do not have part A, how can you have part B. You are not allowed to create part A
So while the employee can be given a salary certificate, which may have the details provided in form 16 part B, you can not actually issue form 16 to the employee.
About mr. Ray's point that the company is liable for deducting TDS, I am not disputing that. Ofcourse they need to check and ensure that his salary is taxable, which depends on the salty break up, investment he has done etc
From India, Mumbai
2394For 16 part B is an annexure to part A
If you do not have part A, how can you have part B. You are not allowed to create part A
So while the employee can be given a salary certificate, which may have the details provided in form 16 part B, you can not actually issue form 16 to the employee.
About mr. Ray's point that the company is liable for deducting TDS, I am not disputing that. Ofcourse they need to check and ensure that his salary is taxable, which depends on the salty break up, investment he has done etc
From India, Mumbai
Dear Mr.Saswata,
Could you please clarify the following scenario.
A. An employee is having a taxable salary income but computation with his savings details it is becoming non taxable. What document will you issue to the employee to substantiate that he doesn't have taxable income.
B. An employee doesn't have taxable salary income but he is having income from other sources may be from house property income or may be some business and altogether his income becomes taxable and needs to submit income Tax return. Now in this case what document will you issue to substantiate that no tax has been deducted at the hands of Employer.
Thanks & regards
From India, Kolkata
Could you please clarify the following scenario.
A. An employee is having a taxable salary income but computation with his savings details it is becoming non taxable. What document will you issue to the employee to substantiate that he doesn't have taxable income.
B. An employee doesn't have taxable salary income but he is having income from other sources may be from house property income or may be some business and altogether his income becomes taxable and needs to submit income Tax return. Now in this case what document will you issue to substantiate that no tax has been deducted at the hands of Employer.
Thanks & regards
From India, Kolkata
@Asru
A) After computation with savings details & no tax payable then there is no need of any document to be issued to employee
B) Many companies will not consider other income other than the salary to calculate TDS & not all the employees will declare other income to the employer. If at all the income received from Salary is not taxable then it is the Employee's responsibility to compute & remit the tax to the IT Department. There are very few companies where in it will ask form the employee for other income & if employee declares then TDS shall be calculated on total income if at all payable then deduct TDs & remit. later you can issue Form 16
From India, Bangalore
A) After computation with savings details & no tax payable then there is no need of any document to be issued to employee
B) Many companies will not consider other income other than the salary to calculate TDS & not all the employees will declare other income to the employer. If at all the income received from Salary is not taxable then it is the Employee's responsibility to compute & remit the tax to the IT Department. There are very few companies where in it will ask form the employee for other income & if employee declares then TDS shall be calculated on total income if at all payable then deduct TDs & remit. later you can issue Form 16
From India, Bangalore
Dear Asru,
if company is paying taxable salary to any employee then company will ask to employee to provide other income and saving details the employee will furnish the details of income and saving in form 12B with duly signed by employee however after considering the saving if No tax payable No need to issue any documents to employee just keep the form 12B along with the savings proof to prove there is No tax liability,
Do remember neither part A nor part B of form 16 can be generated from TDS CPC side if No TDS was deducted' to download the form 16 first deduct the TDS, remit the same to govt and file the return after that you can download the form 16 Not before that,
Warm Regard
Devesh Chauhan
Practicing in Accounts, Finance, Taxation, Labour Laws
From India, Basti
if company is paying taxable salary to any employee then company will ask to employee to provide other income and saving details the employee will furnish the details of income and saving in form 12B with duly signed by employee however after considering the saving if No tax payable No need to issue any documents to employee just keep the form 12B along with the savings proof to prove there is No tax liability,
Do remember neither part A nor part B of form 16 can be generated from TDS CPC side if No TDS was deducted' to download the form 16 first deduct the TDS, remit the same to govt and file the return after that you can download the form 16 Not before that,
Warm Regard
Devesh Chauhan
Practicing in Accounts, Finance, Taxation, Labour Laws
From India, Basti
Hi Asru
I thought I had posted the reply but apparently it didn't register. I was traveling and didn't verify.
You have already got replies on your query. Let me still add some points.
1. Basically the company is liable to deduct TDS in salary paid by them. However, TDS is based in taxable income and not purely salary, so they are required by law to take that into account.
2. As a practice the company is required to ask the employee to submit details of other income and of investment or expenditure that affects taxable income (eg housing loan, nediclaim, lic, ppt)
3. Based on the above, HR or accounts will compute tax due and ask payroll team to deduct that evenly throughout the year
4. In Jan and Feb the company should ask the employee to give proof of what he has actually spent. If there is a difference between what he claimed and what he actually spent, the differential TDS needs to be adjusted in the remaining months
So, if the employee has taxable salary but has given proof that he invests in a way as to reduce the liability then don't deduct TDS. Keep the records including verification of payments. There is no need to give the employee any document to prove it. The income tax department does not punish employees for TDS shortfall.
If the employee has less than taxable salary then it depends on what the employee wants. He can separately pay his advance tax. In which case he does not need to tell anything to the company. If he wants it to be a part of TDS he can disclose the same to the company and the company can cut and pay higher TDS
From India, Mumbai
I thought I had posted the reply but apparently it didn't register. I was traveling and didn't verify.
You have already got replies on your query. Let me still add some points.
1. Basically the company is liable to deduct TDS in salary paid by them. However, TDS is based in taxable income and not purely salary, so they are required by law to take that into account.
2. As a practice the company is required to ask the employee to submit details of other income and of investment or expenditure that affects taxable income (eg housing loan, nediclaim, lic, ppt)
3. Based on the above, HR or accounts will compute tax due and ask payroll team to deduct that evenly throughout the year
4. In Jan and Feb the company should ask the employee to give proof of what he has actually spent. If there is a difference between what he claimed and what he actually spent, the differential TDS needs to be adjusted in the remaining months
So, if the employee has taxable salary but has given proof that he invests in a way as to reduce the liability then don't deduct TDS. Keep the records including verification of payments. There is no need to give the employee any document to prove it. The income tax department does not punish employees for TDS shortfall.
If the employee has less than taxable salary then it depends on what the employee wants. He can separately pay his advance tax. In which case he does not need to tell anything to the company. If he wants it to be a part of TDS he can disclose the same to the company and the company can cut and pay higher TDS
From India, Mumbai
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.
From India, Kolkata
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.
From India, Kolkata
Since you are not willing to accept that is the actual requirement of the law, it makes no sense for me to post further on this.
I suggest you speak to your auditor or to an independent CA and takes his advice and inputs and proceed.
From India, Mumbai
I suggest you speak to your auditor or to an independent CA and takes his advice and inputs and proceed.
From India, Mumbai
Hi,
My views/experience in regard to Form 16 is as under:
1. Employer is supposed to file annual return of salaries paid to their employees exceeding taxable which is presently 250000.00 whether TDS is deducted or not. Information contains from Gross salaries.
2. Employer can download Form 16 from Traces Portal in respect of all those employees in whose respect return is filed, whether TDS was done or not.
3. I attach one Form 16 in which gross salary of 367200 is given and no TDS is done and still Form 16 is generated and downloaded from the Traces Portal. This attachment is to substantiate my views and some part of identity is made hidden.
4. However, if need be, Part B can manually be prepared and attached with the Form 16
5. If employee needs, salary certificate should be issued.
Thanks $ regards,
V K Gupta
From India, Panipat
My views/experience in regard to Form 16 is as under:
1. Employer is supposed to file annual return of salaries paid to their employees exceeding taxable which is presently 250000.00 whether TDS is deducted or not. Information contains from Gross salaries.
2. Employer can download Form 16 from Traces Portal in respect of all those employees in whose respect return is filed, whether TDS was done or not.
3. I attach one Form 16 in which gross salary of 367200 is given and no TDS is done and still Form 16 is generated and downloaded from the Traces Portal. This attachment is to substantiate my views and some part of identity is made hidden.
4. However, if need be, Part B can manually be prepared and attached with the Form 16
5. If employee needs, salary certificate should be issued.
Thanks $ regards,
V K Gupta
From India, Panipat
Dear VK gupta
employer is not supposed to file annually return computation under section 192B shall be made annually but TDS statement shall be file quarterly under section 200(3) of income tax act. we cannot made tds certificate we can only download it from traces portal we will file TDS statement then income tax deptt. shall provide the TDS certificate form 16 under section 203 of income tax act. however any part of form 16 weather A or B cannot be issue manually if any one do so it shall not cover the definition of TDS statement,
Mr. Asru,
your view with regard to form 12B is also right, form 12B is not mandatory No employer can insist the employee to furnish the form 12B employer can accept the declaration of income and investment written even in plane paper along with the documentary proof with duly signed by employee.
yes infact in most of the cases employee does not furnish other income details. and why are you confused about combined income No need to booked rent received by employee in books of accounts. No need to issue form 16A the section 194I shall be applicable to rent payer if threshold limit crossed then rent payer shall be liable to deduct TDS under section 194I don't be confused about maintaining books of accounts & computation combined income,
remember TDS is the part of income tax deptt. we have follow the process as per the guidelines of income tax not as per our's wishes accept the law we cannot made TDS certificate neither electronic nor manually it shall be made by income tax deptt. under section 203 we can only download it only after furnishing the TDS statement by employer under section 200(3)
Hope it is clear now still you have any doubt you may get in touch with me
Warm Regard
Devesh Chauhan
Practicing in Accounts, Finance, Taxation, Labour Laws
From India, Basti
employer is not supposed to file annually return computation under section 192B shall be made annually but TDS statement shall be file quarterly under section 200(3) of income tax act. we cannot made tds certificate we can only download it from traces portal we will file TDS statement then income tax deptt. shall provide the TDS certificate form 16 under section 203 of income tax act. however any part of form 16 weather A or B cannot be issue manually if any one do so it shall not cover the definition of TDS statement,
Mr. Asru,
your view with regard to form 12B is also right, form 12B is not mandatory No employer can insist the employee to furnish the form 12B employer can accept the declaration of income and investment written even in plane paper along with the documentary proof with duly signed by employee.
yes infact in most of the cases employee does not furnish other income details. and why are you confused about combined income No need to booked rent received by employee in books of accounts. No need to issue form 16A the section 194I shall be applicable to rent payer if threshold limit crossed then rent payer shall be liable to deduct TDS under section 194I don't be confused about maintaining books of accounts & computation combined income,
remember TDS is the part of income tax deptt. we have follow the process as per the guidelines of income tax not as per our's wishes accept the law we cannot made TDS certificate neither electronic nor manually it shall be made by income tax deptt. under section 203 we can only download it only after furnishing the TDS statement by employer under section 200(3)
Hope it is clear now still you have any doubt you may get in touch with me
Warm Regard
Devesh Chauhan
Practicing in Accounts, Finance, Taxation, Labour Laws
From India, Basti
Dear Mr. Devesh Chauhan,
I would like to state that neither I am confused nor I have any doubt on the post I have made on July 9, 2016. The question was put in the forum that whether an employer can issue Form 16 Part B (Annexure) to any employee on demand or not. My answer is YES, YES AND YES. It is unfortunate that some of the members tried to divert the issue with so many irrelevant things like Form 12B, Advance tax payment, declaration to employer etc. I would request all of you to consult the circular No. 4/2013 [F.No.275/34/2011-IT(B)]. Dated 17-4-2013 point No. 2.4 in accordance with the provisions of Section 203 of the Income Tax Act 1961 read with the rule 31 of the Income Tax Rules 1962 – regarding. It is the same act as mentioned by you Mr. Chauhan and I am sure once you read the circular (point No 2.4), your conception on issue of Form 16 Part B (Annexure) will be over and there will be no confusion / doubt in your mind for further consultation. A copy of the said circular is enclosed herewith for your ready reference.
Thanks & regards
From India, Kolkata
I would like to state that neither I am confused nor I have any doubt on the post I have made on July 9, 2016. The question was put in the forum that whether an employer can issue Form 16 Part B (Annexure) to any employee on demand or not. My answer is YES, YES AND YES. It is unfortunate that some of the members tried to divert the issue with so many irrelevant things like Form 12B, Advance tax payment, declaration to employer etc. I would request all of you to consult the circular No. 4/2013 [F.No.275/34/2011-IT(B)]. Dated 17-4-2013 point No. 2.4 in accordance with the provisions of Section 203 of the Income Tax Act 1961 read with the rule 31 of the Income Tax Rules 1962 – regarding. It is the same act as mentioned by you Mr. Chauhan and I am sure once you read the circular (point No 2.4), your conception on issue of Form 16 Part B (Annexure) will be over and there will be no confusion / doubt in your mind for further consultation. A copy of the said circular is enclosed herewith for your ready reference.
Thanks & regards
From India, Kolkata
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