Interesting pointers on Income Tax - filing of it returns

All are equal but some are more equal. We have all heard this before right?

Here is something that goes to prove that!

If you are an employee, the employer does a deduction of tax at source (TDS) and pays it to the Income tax department. At the end of the financial year, the employee is supposed to get a statement (Form 16) from the employer with all the details of the salaries paid and the taxes deducted and paid to the income tax department.

There are employers who do the TDS and may not have paid all the deductions to the IT department. They must pay all of it before 31st march and then only they can give the form 16 to the employees. The employees will file their income tax returns with the IT department by 31st July.

What happens in the case where employer has not given the form 16 to the employee? Here are couple of scenarios, I am sure you won't like it.

Employee files the IT returns with the IT department based on his/her knowledge and if the tax calculations show that the employer has not paid the TDS to the IT department, the employee will have to pay that though the employer has already deducted the tax (but not paid to the government). The government does has to get its does - does not matter if the employer has defaulted, the employee has to even pay interest on the tax that should have been paid but not paid. How wonderful. On one end, an employer who gets away scotch free in spite of not adhering to the rules and regulations and on the other hand, you have the employee who has to practically pay up taxes again!

What are the options?

1. The employee finds out online how much tax has been credited into his account (there is an online facility by the IT department) and calculates the taxes with the help of an auditor, finds out if there is a short payment by the employer (yes, the employer has deducted at source) and pays up and files the returns.

2. The employee gets the employer to pay him/her the tax amount deducted but not paid to the IT department and pays it to the IT department directly and files the returns.

Let me have your thoughts!