Form 16 (income tax)
Querist :
Anonymous
(Querist) 09 August 2011
This query is : Resolved
Dear Sir/Madam,
If any organisation does not file TDS return and wants to issue Form 16 to its employees, whose salary is not taxable, than can they issue form 16 to non taxable salaried employee??
Waiting for your prompt response.
A V Vishal
(Expert) 09 August 2011
Confusion arises among employees regarding Form 16 is on following grounds :
That they think Form 16 is a salary certificate.
That income tax Return can not be filed in absence of Form 16
Both the aforesaid “general impression about Form 16″ are wrong. 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
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. (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 patently legal to refuse to issue a certificate of deduction of tax when there is no deduction of tax .
Querist :
Anonymous
(Querist) 09 August 2011
Thank you very much Mr. Vishal, but actually one employee is asking Form 16 for Housing loan application purpose, so can be issued to him Form 16??
A V Vishal
(Expert) 09 August 2011
Yes, you can issue.
Querist :
Anonymous
(Querist) 10 August 2011
Thank you sir.
