08-13-2011, 05:35 PM
[quote]<i>Originally posted by Sayub</i>
<br />@student of law#8626;
continuing the example of an employee who joined the organisation in the month of june at a salary of 250k per month since the salary is below taxable limits therefore estimated taxable income would be nil and employer would not deduct any tax from his salary (as per your comment employer has no obligation to ask employee for his previous employment). Assuming the said employee was employed in the previous 11months of the tax year at the same salary of 250k and his previous employer deducted tax @ of 17.5%. But his new employer didnt deduct tax as aforesaid, the real annual income and tax liability would have been 3 m and 525,000(3m @17.5) respectively, but in the case in discussion the tax liability/deducted and paid would be 481,250. <b>As per sec 115 employee whose employer has filed annual statement shall be treated as filed return of income.</b> Also as per sec 120 a person who has filled complete return of income, the commissioner shall be taken to have made assessment of taxable income. So in this case the employee paid tax short of 43,750 but has this assessed lawfully. i think employer is required to obtain documetary evidence of tax witheld from employee during tax year under clause i of 149(1). If this is right then new employer should deduct tax @17.5% . Please guide me.[quote]
As far as s.115 is concerned, this section does not address many issues.
for example what if the employer has short deducted the tax & later employee has filed return on due date with tax payable. Then would the annual statement of deduction would still be treated as return and return filed by employee as amended return. The answer is NO
Secondly, s.115 says <u><b>where the entire income of a taxpayer in a tax year consists of income chargeable under the Head "Salary"</b></u> Annual statement of deduction of INcome Tax form Salary filed by the Employer .... be treated as return n income furnished by the taxpayer u/s 114
this section is saying where entire income comprises salary. Suppose, a person is undertaking two employment simultaneously. A teacher teaching in college in the morning and in academy in the evening may be a practical example. Now the entire income of teacher is from salary. However, college is not liable to consider his salary income from academy. College will deduct tax according to salary paid by it and file statement of Deduction of Tax. On the other hand suppose academy doesn't deduct and pay tax. Should it be treated as return and assessment order u/s 115 and 120. the answer is no.
S.115 just gives a convenience for a person whose whole salary income is covered and tax is duly deducted and noted under Annual Statement of Deduction of Tax. In the above example, teacher doing dual job, no one of us claims that college should ask for other salary income and deduct tax upon it. If one employer is not bound to account for other salary income earned simultaneously then how can you hold him liable to account for previous salary income. simultaneous salary income may change tax rate from 6% to 10%. But employer will continue to deduct tax on the amount he is giving as salary. Same would be the case of new employee
<br />@student of law#8626;
continuing the example of an employee who joined the organisation in the month of june at a salary of 250k per month since the salary is below taxable limits therefore estimated taxable income would be nil and employer would not deduct any tax from his salary (as per your comment employer has no obligation to ask employee for his previous employment). Assuming the said employee was employed in the previous 11months of the tax year at the same salary of 250k and his previous employer deducted tax @ of 17.5%. But his new employer didnt deduct tax as aforesaid, the real annual income and tax liability would have been 3 m and 525,000(3m @17.5) respectively, but in the case in discussion the tax liability/deducted and paid would be 481,250. <b>As per sec 115 employee whose employer has filed annual statement shall be treated as filed return of income.</b> Also as per sec 120 a person who has filled complete return of income, the commissioner shall be taken to have made assessment of taxable income. So in this case the employee paid tax short of 43,750 but has this assessed lawfully. i think employer is required to obtain documetary evidence of tax witheld from employee during tax year under clause i of 149(1). If this is right then new employer should deduct tax @17.5% . Please guide me.[quote]
As far as s.115 is concerned, this section does not address many issues.
for example what if the employer has short deducted the tax & later employee has filed return on due date with tax payable. Then would the annual statement of deduction would still be treated as return and return filed by employee as amended return. The answer is NO
Secondly, s.115 says <u><b>where the entire income of a taxpayer in a tax year consists of income chargeable under the Head "Salary"</b></u> Annual statement of deduction of INcome Tax form Salary filed by the Employer .... be treated as return n income furnished by the taxpayer u/s 114
this section is saying where entire income comprises salary. Suppose, a person is undertaking two employment simultaneously. A teacher teaching in college in the morning and in academy in the evening may be a practical example. Now the entire income of teacher is from salary. However, college is not liable to consider his salary income from academy. College will deduct tax according to salary paid by it and file statement of Deduction of Tax. On the other hand suppose academy doesn't deduct and pay tax. Should it be treated as return and assessment order u/s 115 and 120. the answer is no.
S.115 just gives a convenience for a person whose whole salary income is covered and tax is duly deducted and noted under Annual Statement of Deduction of Tax. In the above example, teacher doing dual job, no one of us claims that college should ask for other salary income and deduct tax upon it. If one employer is not bound to account for other salary income earned simultaneously then how can you hold him liable to account for previous salary income. simultaneous salary income may change tax rate from 6% to 10%. But employer will continue to deduct tax on the amount he is giving as salary. Same would be the case of new employee