Company won't pay my taxes.

hoshii2000

Hi all,

I am currently here on an employment visa and I want to leave my company. Want to move to either a different Indian company or leave the country entirely. My problem is that my company has not paid my taxes for over a year. They have been deducted from my salary but the payment haven't been made to the tax department. ( No wonder I want to switch companies right! )

My question is...

Is there any way I can force them to pay?
Can I leave the country if my taxes are not paid?

I really appreciate your help.

Thanks

edwardseco

Sticky wicket, I wonder if your documentation might move the authorities to collect. There is an income tax statement for leaving after a long stay. I got this once. Next trip I forgot about it and neither time did I get asked as I left (NO WARRANTY IMPLIED)..

navinkurian2002

Tax deducted at source .
If you show any investment then the less tax is deducted at source. You need to talk to a good tax consultant.

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shashank.aggarwal

you need to collect TDS certificate from the company and that will do it all..

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capt_mahajan

S/He can't. The taxes have not been paid by the company, so how will they issue a TDS (which says, amongst other things, when the money has been paid to income tax and where)

puchoo

havent u been getting a pay slip every month. a pay slip would give the break up of the whole amount as well as deductions under various headings...like EPF, PF and TDS as well.

From what i know, from a recent enough discussion, if your tax has got cut bbut the company has not paid it then its the companys headache not yours...but since ur a foreign national i am not sure if there would be some additinal complication

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hoshii2000

[/quote]


I think this should read: But since you are a foreign national I am sure the will be some additional complication.

Yes I have been getting all of my payslips with the tax deducted. Problem is I know for a fact that they have not been paying the tds.

I know that they are not allowed to ask for tax clearance when you leave the country but I think it will probably get sticky when I try to ship my belongings to their new destination.

KABAARY

The company is taking a serious risk by not depositing the tax deducted. Apart from being proceeded against for recovery of such tax, interest and penalty, they shall be prosecuted leading to rigorous imprisonment up to 7 years and fine for certain of its officers. I suggest you tell them that.

Since the tax with respect to your salary has been deducted by your company, the income tax department cannot recover the same from you - they have to recover the same from the company. This is implicit in Section 205 which stipulates that the assessee shall not be called upon to pay the tax himself to the extent to which tax has been deducted from that income. The tax department has the option of proceeding against you only if tax has not deducted or there has been a shortfall in the deduction. Numerous court rulings are also to this effect.

Technically speaking that is correct as details of the tax paid have to be provided in the TDS certificate. The company might just issue a certificate anyway without giving the payment details but then you will not get credit for the tax.

If TDS certificate is not issued by the company, credit of the TDS cannot be given to you. In such a scenario, there are a few court rulings wherein the court directed the tax authorities to enforce payment of tax by the deductor (the company in your case) and also enforce issue of TDS certificate in respect thereof to the payee (you being the payee). The courts also ruled that in absence of such enforcement, the assessee cannot be held liable for the consequences which are beyond the control of the assessee for non-furnishing of TDS certificate (in your case, you are the "assessee").

Re : Moving to another Indian company :

In this case, you “may” furnish to your new company, details of your income, tax deducted, etc. in Form 12B duly verified by you.

Re : Leaving the country :

Section 230 specifies (amongst other things) that no person who has come to India for employment shall leave India unless he furnishes to the prescribed tax authority, an undertaking in Form 30A from his employer to the effect that tax payable by such person shall be paid by his employer. The prescribed tax authority thereafter shall give a no-objection certificate to the person for leaving India.

As Ed mentioned, very often they don't ask for it at the time of leaving the country but then there is no warranty...

shashank.aggarwal

That was enlightening Kabaary Dada, thanks for sharing your tremendous knowledge with us...

hoshii2000

Thanks KABAARY,

Talked to an attorney. He said basically if you have your payslips and and yearly tds forms you are good.

KABAARY

And did he mention how the tds forms would be issued in absence of tax payment...and more, importantly . how you would get credit for the tds ? There are attorneys and there are attorneys...

dzibead

KABAARY, shabash!

Nick-H

Wow, KABAARY...

Just watch out for all the tax questions winging your way

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hoshii2000

In the US you still have to file taxes even if you are not living in the states. For this purpose the company gave me a tds form, whether it was an actual one or not, I am not sure. But it did have a company stamp on it. It shows exactly how much they have deducted and should have paid.

shashank.aggarwal

Then why do you say that they have not paid the taxes to the government ?