TDS deposit rules relaxed: Is employee TDS credit at risk?
Pavan Naidu
The government has eased the regulations for companies regarding the deposit of Tax Deducted at Source (TDS) on employee salaries.
Starting October 1, 2024, employers will have extended time to deduct TDS from their employees' salaries.
The revised rule permit companies to deposit TDS until the deadline for filing TDS returns, granting an additional 20 days.
Earlier, businesses had to deposit TDS within 60 days of receiving a default notification.
With the new guidelines, companies can now complete TDS deposits by the TDS return filing deadline, helping them avoid penalties.
However, failing to deposit the deducted taxes by the due date could lead the income tax department to issue a prosecution notice to companies for not filing the TDS return on time.
Employees cannot claim TDS credit if their employer deducts TDS but does not deposit it.
In these cases, Section 205 of the Income Tax Act protects employees from double taxation, provided they can verify the TDS deduction from their income.
Employees should review their Form 26AS and Annual Information Statement (AIS) to confirm the accurate deposit of TDS.