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Facts
If the company deducted but did not deposit or report the TDS, you may not get credit through Form 26AS. Sec 205 still protects you from paying the deducted tax again. Evidence of deduction is key.
Provisions and law
- Sec 205, Income-tax Act 1961Where tax was deducted at source, you cannot be asked to pay that tax again directly
- CBDT Office Memorandum dated 11 March 2016 (Sec 205)Demand will not be enforced against you to the extent tax was deducted but not deposited by the deductor
Analysis
Show that tax was deducted, using payslips and bank credits of net salary, and that you cannot get the company to correct records. If CPC raises a demand, respond as disagreeing and raise a grievance with the Assessing Officer, citing Sec 205 and the 11 March 2016 OM. The department can pursue the company's directors or liquidator for the dues. A refund of that TDS is unlikely, but recovery from you should not be enforced.
Conclusion
- Gather payslips and bank statements for the period.
- File your return reporting the full salary.
- Dispute any demand citing Sec 205.
- Raise a grievance with the AO with proof.
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TDS deducted but not credited: claim and grievance
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