WHAT TO DO IF EMPLOYER REFUSES TO ISSUE TDS CERTIFICATE / FORM 16

I worked in XYZ limited for the period from 01.4.12 to 31.03.2013. My Company deducted TDS of Rs. 1,00,000/- but not given TDS certificate till date. What legal remedy I have to force my employer to issue me the TDS certificate i.e. Form 16?

The employee has a right to obtain the TDS certificate in form 16 from his employer. The certificate details should be filled in return of income, since no credit for TDS can be given without it. In case your employer fails to issue the TDS certificate, he shall be liable to a penalty of Rs. 100/- for each day of default u/s 272A(2)g). The Only remedy in case your employer refuse to issue you TDS certificate or he is not issuing TDS certificate is that you can complain to the concerned Assessing Officer in writing, who will take appropriate action or initiate penalty proceedings against the employer.

The employee however has no other legal remedy against his employer in case he refuses to issue the certificate except that the employee may intimate about such default to concerned Assessing Officer, who may take appropriate action or initiate penalty proceedings against the employer. 

Although my previous employer not issued TDS certificate for the TDS deducted by them, can I claim the credit for TDS deducted by them while filing my IT return for A.Y. 2013-14?

Yes. The claim can be made in your return. Department however will raise a demand which will not be enforced on you but on your employer.

Can Employer Decline to Issue Form 16 when there is no deduction of TDS on Salary?

Confusion arises among employees regarding Form 16 is on following grounds:

a)   That they think Form 16 is a salary certificate.

b)   That income tax Return cannot be filed in absence of Form 16.

While the fact is that Form 16 is the prescribed form for issue of certificate of deduction of tax at source from an employee. Employer can decline to issue Form 16 in case there is no deduction of tax at source. It is clear from a bare reading of section 203 of the I T Act and the relevant rule 31 of IT Rule.

Liability to give a certificate of tax deduction is given in Section 203 of the I.T Act. For employer, specific provision is given in sub-section 2 of section 203 of the I.T Act. The said subsection is given as under:

[Certificate For Tax Deducted. 203. [(1)] Every person deducting tax in accordance with [the Foregoing provisions of this Chapter] [shall, within such period as may be prescribed from the time of credit or payment of the sum, or, as the case may be, from the time of issue of a cheque or warrant for payment of any dividend to a shareholder], furnish to the person to whose account such credit is given or to whom such payment is made or the cheque or warrant is issued, a certificate to the effect that tax has been deducted, and specifying the amount so deducted, the rate at which the tax has been deducted and such other particulars as may be prescribed.] [(2) Every person, being an employer, referred to in sub-section (1A) of section 192 shall, within such period, as may be prescribed, furnish to the person in respect of whose income such payment of tax has been made, a certificate to the effect that tax has been paid to the Central Government, and specify the amount so paid, the rate at which the tax has been paid and such other particulars as may be prescribed.]

It is clear from the aforesaid provision that an employer shall furnish the certificate only if any tax has been paid to central govt. on behalf of the employee. Rule 31 of IT Rules states that employer has to issue TDS certificate in Form 16. The said Rule states as under:

31. Certificate of Tax Deducted at Source [or Tax Paid Under Sub-Section (1A) of Section 192].

[(1) The certificate of deduction of tax at source [or, the certificate of payment of tax by the employer on behalf of the employee,] under section 203 to be furnished by any person deducting tax in accordance with the provisions of-

(a) Section 192 shall be in Form No. 16:

Therefore, it is legal to refuse to issue a certificate of deduction of tax when there is no deduction of tax.