Twenty employees of a company sent a query regarding the employer who is neither depositing the TDS being deducted, nor issuing the Form 16 to the employer. Below are the exact question and the remedial measure against such erring employers:

Reader:  Your article on "Not Filed Last Year's Tax Return" in ET was very knowledgeable. Thanks for the same. But my/our (at least 20 in numbers) problem is different. We have not been issued Form-16 by our ex-employer for the year 2009-10. The TDS deducted from our salary (salary slips are issued), has not been deposited in the department by Company, a verified from my AS-26. We are yet to get a few months' salaries from the employer. My questions to you are:
1) what’s the way to inform the IT Deptt. about, not able to file tax return due to unavailability of Form 16, and 
2) What approach to be taken for getting the salaries and Form 16 from employer ? 

We are eagerly waiting for either a reply or an article on this in the interest of all public who are facing this problem. 

Response: As per Income Tax Act 1961, it is mandatory for every employer to issue Form 16 to the employees. But some employers are not fulfilling their obligation due to reasons such as sick company which is not in a position to pay salary or even deposit of TDS. There are intentional defaulters too who are taking the benefit of weak systems, however their days are gone now as the online matching of TDS has started and the penalty action will be taken soon. 

In case your ex-employer is not giving you Form 16, which is the proof of salary earned and tax deducted thereon, you can send a request for issue of Form 16 through registered post and keep it as a proof for income tax department. 

In case you have joined new employer, before issuing the Form 16 the employer seeks the information in Form 12B from employees joining during the year, you can submit all salary info of previous employer therein.  The new employer will issue a consolidated Form 16 for the financial year. 

The details of salary can be taken from the monthly salary slip you got.  You can also file the income tax return on the basis of salary details you have, it is not necessary to attach Form 16 with the return nowadays. If the tax has been deducted, then the employer is bound to issue certificate in Form 16 and you may report the matter to your income tax officer (ITO) and you cannot be called upon to pay tax  to the extent TDS has been deducted. The employer will be held responsible for default if he is not depositing the TDS or not issuing the certificate in Form 16. You do not have control over the deductor.  Hence, you should file ITR on the basis of income and TDS details you have (salary slip) and claim the TDS even if it is not deposited by your employer. 

You can also report the matter to the income tax ombudsman with all the details and copies of your request letters to the employer. To get the salary, you can report to the police station nearest to the employer address, to SEBI if it’s a listed company, or to the company law board and the association or forum, where it is registered. 

About the author

Sudhir Kaushik has been a practicing tax consultant for the last 17 years. He is a Fellow Chartered Accountant and conducts seminars in large companies to help salaried employees with income tax and investment queries. Sudhir brings domain knowledge of income tax laws and their compliance difficulties faced by individuals. He is the author of Income Tax Handbook For Salaried Employees for smart financial planning and investments for salaried people. He enjoys an excellent reputation and has a strong network in the corporate sector and public sector undertakings.