24Q Q4 Filing — Important Notice

Modified on Fri, 8 May at 3:29 PM

What This Document Is About

We have identified a gap in the TDS data for one or more employees in your organisation. This has occurred because the Full & Final Settlement (FNF) was not processed through Razorpay Payroll for these employees before their departure or change in status.

As we prepare to file your 24Q Q4 return, this gap may result in a TDS shortfall notice from the Income Tax Department if it is not corrected in time.

This document explains the different scenarios in which this can happen, what the impact is, and what steps your organisation can take to resolve it before we proceed with filing.

What is Full & Final Settlement (FNF)?

When an employee leaves your organisation, their TDS liability for the financial year may not have been fully recovered in their regular monthly payroll. Razorpay Payroll calculates the total TDS due for the year and collects any remaining amount during the Full & Final Settlement process.

If FNF is not processed through the system, the remaining TDS is never collected or remitted to the government. When we file the 24Q return, this shows up as a shortfall, — and the Income Tax Department issues a notice to your organisation.

Case 1 — Salary was stopped or skipped for the departing employee

WHAT HAPPENED

The employee's salary was not processed in one or more months after their departure. Instead of completing the Full & Final Settlement through Razorpay Payroll, the salary run for this employee was simply skipped or stopped.

WHY THIS IS AN ISSUE

When salary is stopped without processing FNF, the remaining projected TDS for the employee is never deducted or paid to the government. This creates a shortfall in the TDS reported for this employee.

WHAT MAY HAPPEN

If this is not corrected before filing, your organisation may receive a TDS shortfall notice from the Income Tax Department for this employee.

Case 2 — Regular salary was processed for the last month and Last Working Day was updated after - (Dismissed after payroll)

WHAT HAPPENED

The employee's regular monthly salary was processed for their last working month. After payroll was executed, the Last Working Day (LWD) for this employee was updated in the system.

WHY THIS IS AN ISSUE

When regular payroll is processed instead of FNF, only that month's TDS is deducted. Any remaining TDS projected for subsequent months is never collected, since there are no further payroll runs for this employee after their LWD.

You may notice that the payslip for this employee's last month shows a 'Full & Final Settlement' label. This label is applied automatically when an LWD is set — it does not mean that the Full & Final Settlement process was completed through the system. The remaining TDS was not recovered.

WHAT MAY HAPPEN

If this is not corrected, your organisation will receive a TDS shortfall notice from the Income Tax Department. This case cannot be corrected within Razorpay Payroll and must be handled offline.