Income Tax due of an Absconding Employee

[lanish]

Dear Team,

Would like to ask experts how do I treat Income Tax due of absconding Employee.

We deducted the Tax of an Employee based on the Tax declaration which he has given on April 2020. All of a sudden the Employee has been absconding without serving any notice period since Feb 2021. Neither did he submit his actual Income Tax proof.

Now as per his Tax calculation in February there is a sizable amount of tax shortfall due to non submission of proofs from his end. We deducted his tax from April 2020 to January 2021 based on his declaration. But now he is not submitting the proof of investment. Will the company be liable for non deduction of Tax.

Kindly advice what steps to be taken.
Will the company be liable for non deduction of Tax.

Awaiting for guidance.

Regrads,
Lanish Vasudevan

[vgulvady]

Hi,

1. There is no violation on the part of the Company as far as you have a signed investment declaration from the employee that he/she had investment plans during the financial year.
2. At this stage, you can go ahead and compute the taxes for the income paid, including any final settlements, without any proofs of investment and remit it to the government immediately.

Regards.

[C0025]

1. You have done your duty by deducting TDS every month on the basis of Declaration given. But make sure to remit it every month.
2. Proof not submitted by employee is not our fault while filing return he is responsible.

[Bharath]

Hi
Yes… company will be liable for deduction of tax as you have already received tax declaration from the employee. However, if there is any receivable for the employee, the same can be adjusted towards the Feb amount. If income proof is not submitted, actual tax liability will be on the employer scope.

[Dinesh]

Hi @lanish

As others said, it’s better to compute along with FnF and close the statutory remittances first and file the TDS if any.

it’s not a violation from the org. end it happens in many scenarios.