CHAPTER XVII
COLLECTION AND RECOVERY OF TAX
A.—General
190. Deduction at source and advance payment1[1] :-
(1) Notwithstanding that the regular
assessment in respect of any income is to be made in a later assessment year,
the tax on such income shall be payable by deduction 2[2] [or collection] at source or by advance payment 3[3] [or by payment under sub-section (1A) of section 192], as
the case may be, in accordance with the provisions of this Chapter.
(2)
Nothing in this section shall
prejudice the charge of tax on such income under the provisions of sub-section
(1) of section 4.
2[5] [* * *] In the case of income in respect of which provision
is not made under this Chapter for deducting income-tax at the time of payment,
and in any case where income-tax has not been deducted in accordance with the
provisions of this Chapter, income-tax shall be payable by the assessee direct.
3[6] [Explanation.—for the
removal of doubts, it is hereby declared that if any person, including the
principal officer of a company,—
(a) Who is required to deduct
any sum in accordance with the provisions of this Act; or
(b) Referred
to in sub-section (1A) of section 192, being an employer,
does not deduct, or after
so deducting fails to pay, or does not pay, the whole or any part of the tax,
as required by or under this Act, and where the assessee has also failed to pay
such tax directly, then, such person shall, without prejudice to any other
consequences which he may incur, be deemed to be an assessee in default within
the meaning of sub-section (1) of section 201, in respect of such tax.]
DEPARTMENTAL
VIEW
1. Payment of direct taxes other than of tax deducted at
source should be made at the place where the taxpayer is assessed to tax. [Circular
No. 306, dated 19th June, 1981]
2. The objective of filling up the dates of tender of the cheque/draft and its realisation
in the revised colour band challan
is to record evidence on the counterfoils on the challan
about the dates of tender of the cheque/draft and its
realisation. If this evidence is recorded in the
inward receipt stamp of the bank there would obviously be no objection if such
dates in the challan forms are not filled. In such
cases the filling up of the relevant columns of the challan
should not be insisted upon. [Circular No. 265, dated 11th April, 1980]
3. Date of encashment of the cheque
will be the date of payment of tax. [Circular No. 141, dated 23rd July, 1974]
B.—Deduction at source
(1) Any person responsible for paying any
income chargeable under the head "Salaries" shall, at the time of
payment, deduct income-tax 3[10] [* * *] on the
amount payable at the average rate of income-tax 4[11] [* * *] computed
on the basis of the 5[12] [rates in force]
for the financial year in which the payment is made, on the estimated income of
the assessee under this head for that financial year.
6[13] [(1A) 7[14] Without prejudice
to the provisions contained in sub-section (1), the person responsible for
paying any income in the nature of a perquisite which is not provided for by
way of monetary payment, referred to in clause (2) of section 17, may pay, at
his option, tax on the whole or part of such income without making any
deduction there from at the time when such tax was otherwise deductible under
the provisions of sub-section (1).
(1B) For the purpose of paying tax under
sub-section (1A), tax shall be determined at the average of income-tax computed
on the basis of the rates in force for the financial year, on the income
chargeable under the head "Salaries" including the income referred to
in sub-section (1A), and the tax so payable shall be construed as if it were, a
tax deductible at source, from the income under the head "Salaries"
as per the provisions of sub-section (1), and shall be subject to the
provisions of this Chapter.]
8[15] [(2) 9[16] Where, during the
financial year, an assessee is employed simultaneously under more than one
employer, or where he has held successively employment under more than one
employer, he may furnish to the person responsible for making the payment
referred to in sub-section (1) (being one of the said employers as the assessee
may, having regard to the circumstances of his case, choose), such details of
the income under the head "Salaries" due or received by him from the
other employer or employers, the tax deducted at source there from and such
other particulars, in such form and verified in such manner as may be
prescribed, and thereupon the person responsible for making payment referred to
above shall take into account the details so furnished for the purposes of
making the deduction under sub-section (1).]
10[17] [(2A) Where the assessee, being a Government
servant or an employee in a 11[18] [company,
co-operative society, local authority, university, institution, association or
body] is entitled to the relief under sub-section (1) of section 89, he may
furnish to the person responsible for making the payment referred to in
sub-section (1), such particulars in such form and verified in such manner as
may be prescribed, and thereupon the person responsible as aforesaid shall
compute the relief on the basis of such particulars and take it into account in
making the deduction under sub-section (1).]
12[19] [Explanation.—For
the purposes of this sub-section, "University" means a University
established or incorporated by or under a Central, State or Provincial Act, and
includes an institution declared under section 3 of the University Grants
Commission Act, 195613[20] (3 of 1956) to be a university for the purposes of that
Act.]
14[21] [(2B) 15[22] Where an assessee
who receives any income chargeable under the head "Salaries" has, in
addition, any income chargeable under any other head of income (not being a
loss under any such head other than the loss under the head "Income from
house property") for the same financial year, he may send to the person
responsible for making the payment referred to in sub-section (1) the
particulars of—
(a) Such other income
and of any tax deducted thereon under any other provision of this Chapter;
(b) The loss, if any,
under the head "Income from house property", in such form and
verified in such manner as may be prescribed, and thereupon the person
responsible as aforesaid shall take—
(i) Such
other income and tax, if any, deducted thereon; and
(ii) The loss, if any,
under the head "Income from house property", also into account for
the purposes of making the deduction under sub-section (1):
Provided that this sub-section shall not in any case have the effect
of reducing the tax deductible except where the loss under the head
"Income from house property" has been taken into account, from income
under the head "Salaries" below the amount that would be so
deductible if the other income and the tax deducted thereon had not been taken
into account.]
16[23] [(2C) A person
responsible for paying any income chargeable under the head
"Salaries" shall furnish to the person to whom such payment is made a
statement giving correct and complete particulars of perquisites or profits in
lieu of salary provided to him and the value thereof in such form and manner as
may be prescribed17[24] .]
(3)
The person responsible for making
the payment referred to in sub-section (1) 18[25] [or sub-section
(1A)] 19[26] [or sub-section
(2) or sub-section (2A) or sub-section (2B)] may, at the time of making any
deduction, increase or reduce the amount to be deducted under this section for
the purpose of adjusting any excess or deficiency arising out of any previous
deduction or failure to deduct during the financial year.
(4)
The trustees of a recognised
provident fund, or any person authorised by the
regulations of the fund to make payment of accumulated balances due to
employees, shall, in cases where sub-rule (1) of rule 9 of Part A of the Fourth
Schedule applies, at the time an accumulated balance due to an employee is
paid, make there from the deduction provided in rule 10 of Part A of the Fourth
Schedule.
20[27] (5) Where any contribution made by an
employer, including interest on such contributions, if any, in an approved
superannuation fund is paid to the employee, 21[28] [tax] on the
amount so paid shall be deducted by the trustees of the fund to the extent
provided in rule 6 of Part B of the Fourth Schedule.
22[29] (6) For the
purposes of deduction of tax on salary payable in foreign currency, the value
in rupees of such salary shall be calculated at the prescribed rate of
exchange.
DEPARTMENTAL
VIEW
1. Where the donations are being deducted out of the salaries
payable to the employees by the employers themselves for making payment of the
consolidated donations to any trust, institution or fund for providing relief
to any trust, institution or fund for providing relief to the victims of
earthquake in Gujarat, the Drawing and Disbursing Officers may allow the
benefit of 100% deduction on such donations in respect of such employees while
computing the tax deductible at source under section 192 during the financial
year 2000-2001. [Circular No. 4/2001, dated 12th February, 2001]
2. In view of the amendments made by the Taxation Laws (Amendment)
Act, 2001 the Drawing and Disbursing Officers are required to take into account
the revised rates of surcharge of 12% or 17%, as the case may be, while
computing the tax deductible at source under section 192 of the Act during the
financial year 2000-2001. [Circular No. 4/2001, dated 12th February, 2001]
3. DDOs should not insist upon production of vouchers/bills by the
employees for having incurred expenditure on medical treatment of their
handicapped dependants for allowing the deduction under section 80DD for the
purpose of computing tax deductible at source. It will be sufficient if the
employee furnishes a medical certificate from a Government Hospital and a
declaration in writing duly signed by the claimant certifying the actual amount
of expenditure on account of medical treatment (including nursing) training and
rehabilitation of the handicapped dependant and receipt/acknowledgement for the
amount paid or deposited in the specified schemes of LIC on UTI. [Circular
No. 775, dated 26-3-1999]
4. Banks deducting tax on pensions have been advised that once
tax has been deducted under section 192, the tax deductor
is bound by section 203 to issue the certificate of tax deducted in Form 16. No
employee-employer relationship is necessary for this purpose. The certificate
in Form No. 16 cannot be denied on the ground that the tax deductor
is unaware of the payees' other income. [Circular No. 761, dated 13-1-1998]
5. DDOs must ensure that proper and adequate tax is deducted from
the disbursements to employees of not only additional pay and allowances but
also arrears payable to Central Government employees as a result of the
implementations of the revised pay scales. [Circular No. 756, dated
10-10-1997] It was reiterated that DDOs should
correctly recomputed the tax liability of every employee and ensure that the
tax so recovered is paid to the account of the Central Government by 20th
November, 1997. DDOs failing to comply will be liable
to pay interest under section 201(1A) and to other penal consequences. [Circular
No. 758, dated 7-11-1997]
6. Under section 80G, contributions made to the Andhra Pradesh
Chief Minister's Cyclone Relief Fund have been made fully exempt from tax and
can hence be taken as a deduction from total income. The Board is of the view
that the said deduction can be made from total income while computing the tax
to be deducted at source. [Circular No. 752, dated 26-3-1997]
7. It has come to the notice of the Board that some employers
are not correctly evaluating the perquisites, allowances or other profits in
lieu of or in addition to any salary or wages paid to their employees for the
purpose of deducting tax at source under section 192. Such defaulters are
liable to penalty proceedings under sections 221 and 271C and also liable to
prosecution under Chapter XXII. However, before taking stringent measures, the
Board has decided to grant an opportunity to such defaulters. If they pay the
proper tax on 'salaries' as envisaged under section 192, along with interest
liability under section 201(1A), no penalty proceedings under section 221 or
prosecution under Chapter XXII of the Act shall be initiated provided such
payment is made on or before 28th February, 1995. [Circular No. 696, dated
16th December, 1994]
8. All payments and perquisites to employees for services
rendered in India are taxable in India irrespective of the place where the
payment occurs. The employers are liable to deduct tax at source even on
payment of salary, allowances and perquisites paid or provided abroad to their
employees who have rendered service in India. Such deducted tax is required to
be remitted to Government. To give a chance to defaulting employees and to
encourage immediate voluntary compliance, the Board decided that proceedings
under sections 221 and 271C for levy of penalties and proceedings under section
276B for prosecution need not be initiated in cases where an employer
voluntarily comes forward and pays the whole of the tax due under section 192
along with interest liability under section 201(1A) on or before 28th February,
1995. [Circular No. 685, dated 20th June, 1994, as amended by Circular No.
696, dated 16th December, 1994]
The assessments of the
employees, in respect of whom payments of short-deduction and interest thereon
are made by the employers in pursuance of this circular will not be reopened or
otherwise disturbed merely on account of the excess salary payments now
disclosed by the employers. [Circular No. 686, dated 12th August, 1994]
9. The Drawing and Disbursing Officers can allow 100%
deduction towards donations made to the Chief Minister's Earthquake Relief
Fund, Maharashtra under section 80G of the Act while
computing the tax liability of the employees who make such donations, upon
being satisfied about the amount donated and the evidence of its receipt by the
Fund. [Circular No. 678, dated 10th February, 1994]
10. Where tax is deducted at source and paid by the branch
office of the assessee and the quarterly statement/ annual return of tax
deduction at source is filed by the branch, such branch office would be treated
as a separate unit independent of the head office. After meeting any existing
tax liability of such a branch which would normally be in relation to the
deduction of tax at source the balance amount may be refunded to the branch
office. [Circular No. 285, dated 21st October, 1980]
11. In view of the amendment of section 10(4A) with effect from
1st April, 1969 the instruction regarding the non-deduction of tax at source
will apply only to interest credited to Non Resident External accounts and not
to all types of non-resident accounts. [Circular No. 43, dated 20th June,
1970]
12. Jeevan Dhara and Jeevan
Akshay plans of LIC have been recognized for the
purposes of section 80CCA and hence these should be taken note of while
deducting tax at source from salaries. [Circular No. 527, dated 9th
December, 1988]
1[31] 193. Interest on securities2[32] :-
The person responsible for
paying 3[33] [to a resident]
any income 4[34] [by way of
interest on securities] shall, 5[35] [at the time of
credit of such income to the account of the payee or at the time of payment
thereof in cash or by issue of a cheque or draft or
by any other mode, whichever is earlier], deduct income-tax 6[36] [* * *] at the
rates in force on the amount of the interest payable:
[Proviso omitted by the
Finance Act, 1992, w.e.f. 1-6-1992. It was
inserted by the Finance (No. 2) Act, 1991, w.e.f.
1-10-1991.]
7[37] [Provided 8[38] [* * *] that no
tax shall be deducted from—
(i) any
interest payable on 41/4 per cent National Defence
Bonds, 1972, where the bonds are held by an individual, not being a
non-resident; or
9[39] [(ia) any
interest payable to an individual on 41/4 per cent National Defence
Loan, 1968, or 43/4 per cent National Defence Loan,
1972; or]
10[40] [(ib) any interest payable on
National Development Bonds; or]
[(ii) Omitted
by the Finance Act, 1988, w.e.f. 1-4-1989.]
11[41] [(iia) any interest payable on 7-Year National Savings
Certificates (IV Issue); or]
12[42] [(iib) any interest payable on such debentures, issued
by any institution or authority, or any public sector company, or any
co-operative society (including a co-operative land mortgage bank or a
co-operative land development bank), as the Central Government may, by
notification13 in
the Official Gazette, specify in this behalf.
(iii)
any interest payable on 61/2 per
cent Gold Bonds, 1977, or 7 per cent Gold Bonds, 1980, where the Bonds are held
by an individual not being a non-resident, and the holder thereof makes a
declaration in writing before the person responsible for paying the interest
that the total nominal value of the 6per cent Gold Bonds, 1977, or, as the case
may be, the 7 per cent Gold Bonds, 1980, held by him (including such bonds, if
any, held on his behalf by any other person) did not in either case exceed ten
thousand rupees at any time during the period to which the interest relates;]
12
[(iiia) Omitted by the Finance Act, 1997, w.e.f. 1-6-1997. It was inserted by the Finance Act, 1982, w.e.f. 1-6-1982.]
15[44] [(iv) any interest
payable on any security of the Central Government or a State Government:]
16[45] [Provided
that nothing contained in this clause shall apply to the interest exceeding
rupees ten thousand payable on 8% Savings (Taxable) Bonds, 2003 during the
financial year;]
17[46] [(v) any
interest payable to an individual, who is resident in India, on debentures
issued by a company in which the public are substantially interested, being
debentures listed on a recognized stock exchange in India in accordance with
the Securities Contracts (Regulation) Act, 1956 (42 of 1956), and any rules
made there under, if—
(a) The interest is paid
by the company by an account payee cheque; and
(b) The amount of such
interest or, as the case may be, the aggregate of the amounts of such interest
paid or likely to be paid during the financial year by the company to such
individual does not exceed 18[47] [two thousand and
five hundred rupees];]
19[48] [(vi) any
interest payable to the Life Insurance Corporation of India established under
the Life Insurance Corporation Act, 1956 (31 of 1956), in respect of any
securities owned by it or in which it has full beneficial interest; or
(vii)
any interest payable to the General
Insurance Corporation of India (hereafter in this clause referred to as the
Corporation) or to any of the four companies (hereafter in this clause referred
to as such company), formed by virtue of the schemes framed under sub-section
(1) of section 16 of the General Insurance Business (Nationalization) Act, 1972
(57 of 1972), in respect of any securities owned by the Corporation or such
company or in which the Corporation or such company has full beneficial
interest; or
(viii)
Any interest payable to any other
insurer in respect of any securities owned by it or in which it has full
beneficial interest;]
20[49] [(ix) any
interest payable on any security issued by a company, where such security is in
dematerialized form and is listed on a recognized stock exchange in India in
accordance with the Securities Contracts (Regulation) Act, 1956 (42
of 1956) and the rules made there under.]
21[50] [Explanation
22[51] [* * *].—For the
purposes of this section, where any income by way of interest on securities is
credited to any account, whether called "Interest payable account" or
"Suspense account" or by any other name, in the books of account of
the person liable to pay such income, such crediting shall be deemed to be
credit of such income to the account of the payee and the provisions of this
section shall apply accordingly.]
[Explanation 2.—Omitted by the Finance Act, 1992, w.e.f.
1-6-1992. It was inserted by the Finance (No. 2) Act, 1991, w.e.f.
1-10-1991.]
DEPARTMENTAL
VIEW
1. Tax is required to be deducted at source under section 193
or section 195, as the case may be, only at the time of redemption of bonds,
irrespective of whether the income from the bonds has been declared by the
bond-holder on accrual basis from year to year or is declared only in the year
of redemption. In case of persons having declared income on annual accrual basis,
upon making of an application under section 197 or 197A, as the case may be,
the Assessing Officer shall issue a certificate allowing the tax deduction at
source at such reduced rate as is justified by the total income of the
applicant in the year of redemption. [Circular No. 4/2004, dated 13-5-2004]
2. In the case of Ramakrishna Math and Ramakrishna Mission
whose income is exempt under section 10(23C)(iv), the income by way of
interest on all securities under section 193 may be paid to the Ramakrishna
Math and Ramakrishna Mission without deduction of income-tax at source. The
provisions of this circular will be applicable from current financial year. [Circular No. 745, dated 19-7-1996. See also Circular
No. 3/2002, dated 28-6-2002 and 11/2002, dated 22-11-2002]
Likewise, the interest on
securities may be paid to Shri Ram Chandra Mission,
Chennai [Circular No. 2/2003, dated 11-3-2003] and World Renewal
Spiritual Trust, Mumbai [Circular No. 3/2003, dated 11-3-2003] without
deduction of income-tax at source for assessment years 2003-2004 and 2004-2005.
3. In the case of a provident fund whose income is exempt
under section 10(25)(ii) established under a scheme under the Employee's
Provident Fund and Miscellaneous Provisions Act, 1952 the income by way of
interest on securities of Central and State Governments may be paid to such
provident funds without deduction of income-tax at source. The provisions of
this circular will be applicable from current financial year. [Circular No.
741, dated 18-4-1996]
4. Since the income of Regimental Fund or Non-public Fund
established by the Armed Forces of the Union are exempt under section 10(23AA),
it has been decided that no tax may be deducted at source under sections 193
and 194-I from the income of such funds. [Circular No. 735, dated 30-1-1996]
5. In respect of cumulative deposits/debentures/bonds, tax is
required to be deducted at source every time the interest is credited in the
account books of the payer and is not to be postponed till the maturity of the
deposit/debenture/bond. The tax so deducted is also required to be deposited in
the account of the Central Government within the prescribed time. However, tax
is not required to be deducted if the aggregate amount of interest
credited/paid or likely to be credited/paid during the financial year to each
payee does not exceed Rs. 2,500. Tax is also not
required to be deducted from interest incomes which are otherwise exempted from
tax deduction under sections 193 and 194A. These exemptions include interest on
deposits with a banking company to which the Banking Regulation Act, 1949,
applies. [Circular No. 643, dated 22nd January, 1993]
6. Where Government securities are registered in the name of a
banking company tax will be deducted at source from the interest at the rates
in force applicable to the banking company without regard to the status of the
beneficial owner of the securities. [Circular No. 2P, dated 16th May, 1966]
2[53] The principal
officer of an Indian company or a company which has made the prescribed
arrangements for the declaration and payment of dividends (including dividends
on preference shares) within India, shall, before making any payment in cash or
before issuing any cheque or warrant in respect of
any dividend or before making any distribution or payment to a shareholder, 3[54] [who is resident
in India,] of any dividend within the meaning of sub-clause (a) or
sub-clause (b) or sub-clause (c) or sub-clause (d) or
sub-clause (e) of clause (22) of section 2, deduct from the amount of
such dividend, income-tax 4[55] [* * *] at the
rates in force:
5[56] [Provided that
no such deduction shall be made in the case of a shareholder, being an
individual, if—
(a) The dividend is paid
by the company by an account payee cheque; and
(b) The amount of such
dividend or, as the case may be, the aggregate of the amounts of such dividend
distributed or paid or likely to be distributed or paid during the financial
year by the company to the shareholder, does not exceed 6[57] [two thousand
five hundred] rupees:
Provided further that the provisions of this section shall not
apply to such income credited or paid to—
(a) The Life Insurance
Corporation of India established under the Life Insurance Corporation Act, 1956
(31 of 1956), in respect of any shares owned by it or in which it has full
beneficial interest;
(b) The General
Insurance Corporation of India (hereafter in this proviso referred to as the
Corporation) or to any of the four companies (hereafter in this proviso
referred to as such company), formed by virtue of the schemes framed under
sub-section (1) of section 16 of the General Insurance Business
(Nationalization) Act, 1972 (57 of 1972), in respect of any shares owned by the
Corporation or such company or in which the Corporation or such company has
full beneficial interest;
(c) Any
other insurer in respect of any shares owned by it or in which it has full
beneficial interest:]
7[58] [Provided also
that no such deduction shall be made in respect of any dividends referred to in
section 115-O.]
DEPARTMENTAL
VIEW
1. The threshold limit for the purpose of tax deduction at
source from income by way of dividends increased from Rs.
1,000 to Rs. 2,500 with immediate effect. [Circular
No. 6/2002, dated 2-8-2002]
2. Dividends may be paid to Shri Ram
Chandra Mission, Chennai, whose incomes are exempt under section 10(23C)(iv), without deduction of income-tax at source. [Circular
No. 2/2003, dated 11-3-2003]
3. Gross dividend (net dividend plus the tax deducted at
source) receivable by a registered shareholder on behalf of the beneficial
shareholder will be assessed in the hands of the latter as 'income from other
sources' in the year in which it is declared, distributed or paid and not as
dividend. [Circular No. 3D, dated 30th March, 1967]
4. The liquidator, who is the principal officer of the company
within the meaning of section 2(35) of the Income-tax Act, 1961, paying into
the liquidation account any money falling within the meaning of section 555(1)(b)
of the Companies Act has to deduct tax from such moneys. [Circular
No. XXI-16, dated 8th January, 1965]
1[59] [194A. Interest other than "Interest on
securities"2[60] :-
3[61] (1) Any person, not being an individual
or a Hindu undivided family, who is responsible for paying to a resident any
income by way of interest other than income 4[62] [by way of
interest on securities], shall, at the time of credit of such income to the
account of the payee or at the time of payment thereof in cash or by issue of a
cheque or draft or by any other mode, whichever is
earlier, deduct income-tax thereon at the rates in force:
5[63] [Provided
that an individual or a Hindu undivided family, whose total sales, gross
receipts or turnover from the business or profession carried on by him exceed
the monetary limits specified under clause (a) or clause (b) of
section 44AB during the financial year immediately preceding the financial year
in which such interest is credited or paid, shall be liable to deduct
income-tax under this section.]
6[64] [Explanation.—For
the purposes of this section where any income by way of interest as aforesaid
is credited to any account whether called "Interest payable account"
or "Suspense account" or by any other name, in the books of account
of the person liable to pay such income, such crediting shall be deemed to be
credit of such income to the account of the payee and the provisions of this
section shall apply accordingly.]
[Omitted
by the Finance Act, 1992, w.e.f. 1-6-1992. It was amended by the Finance Act, 1968, w.e.f. 1-4-1968.]
(3) The provisions of sub-section
(1) shall not apply—
7[65] [(i) where the amount of such income or, as the case
may be, the aggregate of the amounts of such income credited or paid or likely
to be credited or paid during the financial year by the person referred to in
sub-section (1) to the account of, or to, the payee, 8[66] [does not exceed—
(a) Ten
thousand rupees, where the payer is a banking company to which the Banking
Regulation Act, 1949 (10 of 1949) applies (including any bank or banking
institution, referred to in section 51 of that Act);
(b) Ten
thousand rupees, where the payer is a co-operative society engaged in carrying
on the business of banking;
(c) Ten thousand rupees,
on any deposit with post office under any scheme framed by the Central
Government and notified by it in this behalf; and
(d) Five
thousand rupees in any other case:]
9[67] [Provided
that in respect of the income credited or paid in respect of—
(a) Time deposits with a
banking company to which the Banking Regulation Act, 1949 (10 of 1949) applies
(including any bank or banking institution referred to in section 51 of that
Act); or
(b) Time deposits with a
co-operative society engaged in carrying on the business of banking;
(c) Deposits with a
public company which is formed and registered in India with the main object of
carrying on the business of providing long-term finance for construction or
purchase of houses in India for residential purposes 10[68] [and which is
eligible for deduction under clause (viii) of sub-section (1) of section
36] 11[69] [* * *],
12[70] [* * *] the
aforesaid amount shall be computed with reference to the income credited or
paid by a branch of the banking company or the co-operative society or the
public company, as the case may be;]
[(ii) Omitted by
the Finance Act, 1999, w.e.f. 1-4-2000.]
(iii)
To such income credited or paid to—
(a) Any
banking company to which the Banking Regulation Act, 1949 (10 of 1949),
applies, or any co-operative society engaged in carrying on the business of
banking (including a co-operative land mortgage bank), or
(b) Any financial
corporation established by or under a Central, State or Provincial Act, or
(c) The Life Insurance
Corporation of India established under the Life Insurance Corporation Act, 1956
(31 of 1956), or
(d) The Unit Trust of
India established under the Unit Trust of India Act, 1963 (52 of 1963), or
(e) Any company or
co-operative society carrying on the business of insurance, or
(f) Such other
institution, association or body 13[71] [or class of
institutions, associations or bodies] which the Central Government may, for
reasons to be recorded in writing, notify14[72] in this behalf in the Official Gazette;
15[73] [(iv) To such income credited or paid by a firm to a
partner of the firm;]
(v)
To such income credited or paid by
a co-operative society 16[74] [to a member
thereof or] to any other co-operative society;
17[75] [(vi) To
such income credited or paid in respect of deposits under any scheme framed by
the Central Government and notified18[76] by it in this behalf in the Official Gazette;]
19[77] [(vii) To
such income credited or paid in respect of deposits (other than time deposits
made on or after the 1st day of July, 1995) with a banking company to which the
Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or
banking institution referred to in section 51 of that Act);
(viia) To such income credited or paid in respect
of,—
(a) Deposits with a
primary agricultural credit society or a primary credit society or a
co-operative land mortgage bank or a co-operative land development bank;
(b) Deposits (other than
time deposits made on or after the 1st day of July, 1995) with a co-operative
society, other than a co-operative society or bank referred to in sub-clause (a),
engaged in carrying on the business of banking;]
20[78] [(viii) To
such income credited or paid by the Central Government under any provision of
this Act or the Indian Income-tax Act, 1922 (11 of 1922), or the Estate Duty
Act, 1953 (34 of 1953), or the Wealth-tax Act, 1957 (27 of 1957), or the
Gift-tax Act, 1958 (18 of 1958), or the Super Profits Tax Act, 1963 (14 of
1963), or the Companies (Profits) Surtax Act, 1964 (7 of 1964) or the Interest
Tax Act, 1974 (45 of 1974);]
21[79] [(ix) To
such income credited or paid by way of interest on the compensation amount
awarded by the Motor Accidents Claims Tribunal where the amount of such income
or, as the case may be, the aggregate of the amounts of such income credited or
paid during the financial year does not exceed fifty thousand rupees;]
22[80] [(x) To such income which is paid or payable
by an infrastructure capital company or infrastructure capital fund or a public
sector company in relation to a zero coupon bond issued on or after the 1st day
of June, 2005 by such company or fund or public sector company.]
23[81] [Explanation
1.—For the purposes of clauses (i), (vii)
and (viia), "time deposits" means
deposits (excluding recurring deposits) repayable on the expiry of fixed
periods.
24[82] [Explanation
2.—Omitted by the Finance Act, 2006, w.e.f.
1-4-2006.]]
25[83] [(4) The person
responsible for making the payment referred to in sub-section (1) may, at the
time of making any deduction, increase or reduce the amount to be deducted
under this section for the purpose of adjusting any excess or deficiency
arising out of any previous deduction or failure to deduct during the financial
year.]
[Explanation
omitted by the Finance Act, 1992, w.e.f. 1-6-1992.]
DEPARTMENTAL
VIEW/SUPREME COURT RULING
1. A member of a co-operative bank shall receive interest on
both time deposits and deposits other than time deposits with such co-operative
bank without TDS under section 194A. A member eligible for exemption must have
subscribed to and fully paid for at least one share of the co-operative bank,
must be entitled to participate and vote in the General Body Meetings and/or
Special General Body Meetings of the co-operative bank and must be entitled to
receive share from the profits of the co-operative bank. [Circular No.
9/2002, dated 11-9-2002]
2. The interest other than 'income by way of interest on securities'
may be paid to the Ramakrishna Math and Ramakrishna Mission, whose income is
exempt under section 10(23C)(iv), without deduction of income-tax at
source. The provisions of this circular shall be applicable from the financial
year 2002-2003. [Circular No. 3/2002, dated 28-6-2002]
Likewise, Sir Sathya Sai Central Trust, Sri Sathya Sai Medical Trust and Sri Sathya Sai Institute of Higher
Learning [Circular No. 12/2002, dated 22-11-2002]; Shri
Ram Chandra Mission, Chennai [Circular No. 2/2003, dated 11-3-2003]
and World Renewal Spiritual Trust, Mumbai [Circular No. 3/2003, dated
11-3-2003] whose incomes are exempt under section 10, be paid interest
other than 'income by way of interest on securities' without tax deduction at
source for assessment years 2003-2004 and 2004-2005.
3. Tax is required to be deducted at the time of payment of
the interest income to an infrastructure capital company or fund by an approved
'infrastructure enterprise'. However, such infrastructure capital company or
fund may apply to their Assessing Officers for certificate of deduction of
lower rate or for certificate of non-deduction of TDS under section 197 of the
Act and on receipt of such applications; the Assessing Officer shall issue the
requisite certificate expeditiously. [Circular No. 780, dated 4th October,
1999]
4. See Circular Nos. 715, dated 18th August, 1995 and 716, dated
9th August, 1995 answering several questions in respect of the ambit of TDS to
be made.
5. The difference between the issue price and the face value
of the commercial papers and the certificates of deposits is to be treated as
'discounts allowed' and not as interest paid. Therefore the provisions relating
to deduction of tax at source are not applicable in such transactions. [Circular
No. 647, dated 22nd March, 1993]
6. See the gist of
Circular No. 643, extracted under 'Departmental view' under section 193, ante.
7. Since the provisions relating to tax deduction at source
from interest on time deposits with banks came into force with effect from 1st
October, 1991, only the interest paid or credited after this date will be
liable to tax deduction at source. [Circular No. 626, dated 12th February,
1992]
8. Interest payment made under the Land Acquisition Act is
covered by the provisions of section 194A and hence tax will have to be
deducted at source under this section from the interest payments made to the
public under the Land Acquisition Act. [Circular No. 526, dated 5th
December, 1988]
9. The time for making the payment of the tax deducted at
source is governed by section 200 read with rule 30 and would reckon from the
date of credit of interest made constructively to the account of the payee
which would ordinarily be within one week from the last day of the month in
which the deduction is made. Where however, interest is credited by an assessee
carrying on business or profession, as on the date up to which the accounts
thereof are made, the amount of tax deducted would be payable within two months
of the expiry of the month in which the accounts of the assessee are made. [Circular
No. 288, dated 22nd December, 1980]
10. The person paying the interest may act according to the
affidavits or statements which the joint account holders may file before him,
in discharging his responsibilities under section 194A. [Circular No. 256,
dated 29th May, 1979]
11. No tax is to be deducted at source in respect of interest
paid to a bank but where the interest from the buyer is not for the bank as
such but only routed through the bank to the supplier who is the recipient, the
buyer has to deduct a tax at source. [Circular No. 48, dated 7th November,
1970]
12. Banking institutions are no longer required to deduct tax
from interest paid or credited to the accounts of a resident depositor. [Circular
No. 42, dated 20th June, 1970]
13. So far as educational institutions whose income is exempt
under section 10(22) are concerned, provisions of section 194A will not apply
and no tax need be deducted at source. [Letter No. 12/113/68, dated 28th
October, 1968]
14. No tax need be deducted in respect of interest on National
Savings Certificates (V, VI, and VII issues), National Savings Annuity
Certificates and Social Security Certificates. [Notification
No. SO 2703, dated 1st September, 1990]
15. National Deposit Scheme, 1984, Post Office Deposit Scheme,
1970 and Investment Deposit Account Scheme have been specified for the purposes
of section 194A and tax from the interest thereof need not be deducted at
source. [Notification Nos. GSR 453E, dated 15th June, 1984; SO 2878, dated
1st September, 1970 and SO 4247, dated 11th December 1986]
16. The material expression in this section is "at the
time of credit of such income to the account of the payee". Whenever
interest is credited to the account of the payee the payer has to deduct tax at
source. [CIT v Century Building Industries P Ltd (2007) 293 ITR
194 (SC)]
1[84] [194B. Winnings from lottery or crossword
puzzle2[85] :-
3[86] The person
responsible for paying to any person any income by way of winnings from any
lottery or crossword puzzle 4[87] [or card game and
other game of any sort] in an amount exceeding 5[88] [five thousand
rupees] shall, at the time of payment thereof, deduct income-tax thereon at the
rates in force:
[Proviso omitted by the
Finance Act, 1999, w.e.f. 1-4-2000.]
6[89] [Provided 7[90] [* * *] that in a
case where the winnings are wholly in kind or partly in cash and partly in kind
but the part in cash is not sufficient to meet the liability of deduction of
tax in respect of whole of the winnings, the person responsible for paying
shall, before releasing the winnings, ensure that tax has been paid in respect
of the winnings.]
DEPARTMENTAL
VIEW
1. Tax is deductible at source from 'lucky dip' prizes won by
lottery agents. [Circular No. 264, dated 11th February, 1980]
2. Persons deducting tax at source under section 194B have to
pay the deducted tax to the Central Government within one week from the date of
such deduction; issue a certificate of tax deduction and furnish quarterly
returns of deduction of tax at source. [Circular No. 94, dated 15th
November, 1972]
1[91] [194BB. Winnings from horse race2[92] :-
3[93] Any person, being
a bookmaker or a person to whom a licence has been
granted by the Government under any law for the time being in force for horse
racing in any race course or for arranging for wagering or betting in any race
course, who is responsible for paying to any person any income by way of
winnings from any horse race in an amount exceeding 4[94] [two thousand
five hundred rupees] shall, at the time of payment thereof, deduct income-tax
thereon at the rates in force:
[Proviso omitted by the
Finance Act, 1999, w.e.f. 1-4-2000.]
DEPARTMENTAL
VIEW
1. In the case of any person, other than a company, it will be
open to the recipient of the winnings from horse race to make an application to
the Assessing Officer and obtain from him a certificate authorizing the payer
to deduct tax at such lower rate or deduct no tax as may be appropriate. The
tax deducted under this section should be paid to the credit of the Central
Government within one week from the date of such deduction. The person
responsible for making the deduction should issue a certificate of tax deducted
at source and furnish to the Assessing Officer a quarterly statement in Form
26BB. [Circular No. 241, dated 1st June, 1978]
1[95] [2[96] 194C. Payments to contractors
and sub-contractors3[97] :-
4[98] [(1) Any person
responsible for paying any sum to any resident (hereinafter in this section
referred to as the contractor) for carrying out any work5[99] (including supply of labour for
carrying out any work) in pursuance of a contract between the contractor and—
(a) The Central
Government or any State Government; or
(b) Any local authority;
or
(c) Any corporation
established by or under a Central, State or Provincial Act; or
(d) Any company; or
(e) Any co-operative
society; or
(f) Any authority,
constituted in India by or under any law, engaged either for the purpose of
dealing with and satisfying the need for housing accommodation or for the
purpose of planning, develop-ment or improvement of
cities, towns and villages, or for both; or
(g) Any society
registered under the Societies Registration Act, 1860 (21 of 1860) or under any
law corresponding to that Act in force in any part of India; or
(h) Any trust; or
(i) Any
university established or incorporated by or under a Central, State or
Provincial Act and an institution declared to be a university under section 3
of the University Grants Commission Act, 19566[100] (3 of 1956); or
(j) Any firm; or
(k) Any individual or a
Hindu undivided family 7[101] [or an association of persons or a body of individuals,
whether incorporated or not other than those falling under any of the preceding
clauses], whose total sales, gross receipts or turnover from the business or profession
carried on by him exceed the monetary limits specified under clause (a) or
clause (b) of section 44AB during the financial year immediately preceding the
financial year in which such sum is credited or paid to the account of the
contractor,
Shall, at the time of
credit of such sum to the account of the contractor or at the time of payment
thereof in cash or by issue of a cheque or draft or
by any other mode, whichever is earlier, deduct an amount equal to—
(i) One
per cent in case of advertising,
(ii) In any other case
two per cent, of such sum as income-tax on income comprised therein:
Provided that no individual or a Hindu undivided family shall be
liable to deduct income-tax on the sum credited or paid to the account of the
contractor where such sum is credited or paid exclusively for personal purposes
of such individual or any member of Hindu undivided family.]
(2)
Any person (being a contractor and
not being an individual or a Hindu undivided family) responsible for paying any
sum to any resident (hereafter in this section referred to as the
sub-contractor) in pursuance of a contract with the sub-contractor for carrying
out, or for the supply of labour for carrying out,
the whole or any part of the work undertaken by the contractor or for supplying
whether wholly or partly any labour which the
contractor has undertaken to supply shall, at the time of credit of such sum to
the account of the sub-contractor or at the time of payment thereof in cash or
by issue of a cheque or draft or by any other mode,
whichever is earlier, deduct an amount equal to one per cent of such sum as
income-tax on income comprised therein:
8[R102] [Provided that an individual or a Hindu undivided
family, whose total sales, gross receipts or turnover from the business or
profession carried on by him exceed the monetary limits specified under clause
(a) or clause (b) of section 44AB during the financial year
immediately preceding the financial year in which such sum is credited or paid
to the account of the sub-contractor, shall be liable to deduct income-tax
under this sub-section.]
9[R103] [Explanation I.—For the purposes of
sub-section (2), the expression "contractor" shall also include a
contractor who is carrying out any work (including supply of labour for carrying out any work) in pursuance of a
contract between the contractor and the Government of a foreign State or a
foreign enterprise or any association or body established outside India.]
10[R104] [Explanation 11[R105] [II].—For the
purposes of this section, where any sum referred to in sub-section (1) or
sub-section (2) is credited to any account, whether called "Suspense
account" or by any other name, in the books of account of the person
liable to pay such income, such crediting shall be deemed to be credit of such income
to the account of the payee and the provisions of this section shall apply
accordingly.]
12[R106] [Explanation III.— For the purposes of this section, the expression
"work" shall also include—
(a) Advertising;
(b) Broadcasting and
telecasting including production of programmes for
such broadcasting or telecasting;
(c) Carriage of goods
and passengers by any mode of transport other than by railways;
(d) Catering.]
(3)
No deduction shall be made under
sub-section (1) or sub-section (2) from—
13[R107] [(i) the amount of any sum
credited or paid or likely to be credited or paid to the account of, or to, the
contractor or sub-contractor, if such sum does not exceed twenty thousand
rupees:
Provided that where the aggregate of the amounts of such sums
credited or paid or likely to be credited or paid during the financial year
exceeds fifty thousand rupees, the person responsible for paying such sums
referred to in sub-section (1) or, as the case may be, sub-section (2) shall be
liable to deduct income-tax under this section: 14[[R108] * * *]]
15[R109] [Provided further that no deduction shall be made
under sub-section (2), from the amount of any sum credited or paid or likely to
be credited or paid during the previous year to the account of the
sub-contractor during the course of business of plying, hiring or leasing goods
carriages, on production of a declaration to the person concerned paying or
crediting such sum, in the prescribed form16[R110] and verified in the
prescribed manner and within such time as may be prescribed, if such sub-contractor
is an individual who has not owned more than two goods carriages at any time
during the previous year:
Provided also that the person responsible for paying any sum as
aforesaid to the sub-contractor referred to in the second proviso shall furnish
to the prescribed income-tax authority or the person authorised
by it such particulars as may be prescribed in such form17[R111] and within such time as may
be prescribed; or]
(ii) Any sum credited or
paid before the 1st day of June, 1972; 18[R112] [or]
19[R113] [(iii) Any
sum credited or paid before the 1st day of June, 1973, in pursuance of a
contract between the contractor and a co-operative society or in pursuance of a
contract between such contractor and the sub-contractor in relation to any work
(including supply of labour for carrying out any
work) undertaken by the contractor for the co-operative society.]
20[R114] [Explanation.—For
the purposes of clause (i), "goods
carriage" shall have the same meaning as in the Explanation to sub-section
(7) of section 44AE.]
21[R115] [(4) Omitted
by the Finance Act, 2003, w.e.f. 1-6-2003.]
22[[R116] (5) Omitted
by the Finance Act, 2003, w.e.f. 1-6-2003.]
DEPARTMENTAL
VIEW/SUPREME COURT RULING
1. Since the arrangements between the cold storage owners and
their customers are basically contractual in nature, the provision of section
194C will be applicable to the amounts paid as cooling charges by the customers
of the cold storage. [Circular No. 1/2008, dated 10-1-2008]
2. Before taking a decision on the applicability of TDS under
section 194C on a contract, it would have to be examined whether the contract
is a 'contract for work' or a 'contract for sale'. TDS shall be applicable only
where it is a 'contract for work' as per the principles laid down in Para 7(via)
of Circular No. 681, dated 8-3-1994. [Circular No. 13/2006, dated 13-12-2006]
3. Each section regarding TDS deals with a particular kind of
payment to the exclusion of all other sections in this Chapter. Payment of any
sum shall be liable for deduction of tax only under one section. Thus, sums
paid for carrying out work of advertising cannot be subjected to deduction of
tax at source under section 194C as payment for works contract as also under
section 194J as payment of fees for professional services. [Circular No.
720, dated 30-8-1995]
4. See Circular Nos. 715, dated 8-8-1995 and 716, dated 9-8-1995
answering a number of questions in respect of the scope and ambit of TDS to be
made.
5. Advertising may be in print or electronic media, i.e.
in newspapers, periodicals, radio, television, etc. Tax will be deducted at the
rate of 1 per cent of the payment made for advertising including production of programmes for such broadcasting and telecasting to be used
in such advertising. In all other cases of work of broadcasting and telecasting
including production of programmes for such
broadcasting and telecasting, where advertising is not involved, tax will be
deducted at the rate of 2 per cent of the sum. [Circular No. 714, dated
3-8-1995]
6. The provisions of section 194C do not apply to the payments
made to the airlines or the travel agents for purchase of tickets for air
travel of individuals. The provisions shall, however, apply when payments are
made for chartering an aircraft for carriage of passengers or goods. The
clarification shall apply mutatis mutandis to the tickets for travel of
individual by any other mode of transport also. [Circular No. 713, dated
2-8-1995]
7. The Board has clarified that this section shall apply to
all types of contracts for carrying out any work including transport contracts,
advertisement contracts, broadcasting contracts, telecasting contracts, labour contracts, materials contracts and works contracts.
Service contracts will be covered by the provisions of this section since
service means doing any work. In a very broad sense, a work done by one person
is service rendered to another and indeed one of the dictionary meanings of the
word 'service' is 'work'. The provisions are wide enough to cover not only
written contracts but also oral contracts. The percentage deduction prescribed
in law is with reference to the amount of payment and not 'income comprised in
the payment'. The deduction is also to be made from advance payments if they
exceed the limit. The term 'service contracts' would include services rendered
by such persons as lawyers, physicians, surgeons, engineers, accountants,
architects, consultants, etc. The term 'transport contracts' would, in addition
to contracts for transportation and loading/unloading of goods, also cover
contracts for plying of buses, ferries, etc. along with staff (e.g., driver,
conductor, cleaner, etc). The term 'materials contracts' would mean contracts
for supply of materials where the principal contract is for work and labour and not a contract for sale of materials. [Circular
No. 681, dated 8th March, 1994 withdrawing Circular Nos. 86, dated 29th May,
1972; 93, dated 26th September, 1972 and Para 11 of Circular No. 108, dated
20th March, 1973]
An assessee is not liable
to deduct tax at source under section 194C from payments made during the period
1 April, 1994 to 30 June, 1995 (period prior to insertion of Explanation III)
to transport operators for carrying goods to different destinations. [Birla Cement Works v CBDT (2001) 248
ITR 216 (SC)]
8. Any person responsible for paying any sum to any resident
contractor for carrying out any work (including supply of labour
for carrying out any work) in pursuance of a contract between the contractor
and the bodies, specified therein shall, at the time of credit of such sum to
the account of the contractor, or, payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier,
deduct an amount equal to 2% of such sum as income-tax on income comprised
therein. It is clarified that carrying out any work includes service contracts
and transport contracts. The bodies are:
(a)
The Central Government or any State
Government, or
(b)
Any local authority; or
(c)
Any corporation established by or
under a Central, State or Provincial Act; or
(d)
Any Company; or
(e)
Any co-operative society; or
(f)
Any authority, constituted in India by or
under any law, engaged either for the purpose of dealing with and satisfying
the need for housing accommodation or for the purpose of planning, development or
improvement of cities, towns and villages, or both; or
(g) Any society registered under the Societies
Registration Act, 1860 or under any law corresponding to that Act in force in
any part of India; or
(h)
Any trust; or
(i) Any
university or institution declared to be a university.
Similarly, when a
contractor makes payment of a sum to a resident sub-contractor in pursuance of
a contract for carrying out whole or any part of the work undertaken by him, he
is required to deduct an amount equal to 1 per cent of such sum as income-tax.
The amount of income-tax is to be further increased by surcharge at prescribed
rates. No deduction of tax need be made from any sum credited or paid if the
consideration for the contract does not exceed Rs.
10,000. There is also a provision for deduction of no tax or at lower rates by
filing Form 13C. Failure to deduct tax is punishable under section 276BB. As in
other cases of tax deduction the person deducting the tax has to pay the tax to
the credit of the Central Government within a period of one week from the date
of deduction; furnish a certificate of tax deduction; obtain tax deduction
account number and file a return in Form 26C by 30th June. [Circular No.
666, dated 8th October, 1993]
9. The applicability of the provisions of section 194C will
have to be examined with reference to the terms of each contract. In cases of
service contracts for carrying out any work, the provisions of the section
would be applicable and tax will have to be deducted at source from payment
made to the private bus owners. Contract between private bus owners and the
State Road Transport Corporations for plying of buses would be covered by the
provisions of this section. [Circular No. 558, dated 28th March, 1990]
10. According to the provisions of the Finance Act, 1989 in
cases in which tax has to be deducted under section 194C the deduction shall be
made at the rates specified and shall be increased by a surcharge for purposes
of the Union calculated at the rate of eight per cent of such deduction. [Circular
No. 539, dated 13th July, 1989]
11. The programmer under the NREP and RLEGP are executed with
the participation of the people and the Panchayati Raj institutions under the active supervision of the State
Government in conformity with the guidelines framed by the Central Government.
There is no contract between the village committee or voluntary agencies and
the State Governments which is sine qua non for attracting the
provisions of section 194C. Moreover these schemes specifically ban the
employment of contractors/middlemen for the execution of the work undertaken
under the schemes. Therefore provisions of section 194C would not be attracted
in such cases. [Circular No. 502, dated 27th January, 1988]
12. In respect of persons employed in the beedi
manufacture through the medium of agency such as munshis
where the workers bring bidi to the factory for
quality check and get their payments, provisions of section 194C would not be
attracted in view of the decision of the Supreme Court in P.M. Patel &
Sons v Union of India [Circular No. 487, dated 8th June, 1987]
13. Section 194C, which provides for deduction of tax at source
from payments to contractors and sub-contractors, prior to the insertion of Explanation
III therein with effect from 1 July, 1995 was not applicable to transport
contracts, i.e. contracts for carriage of goods. There are no compelling
reasons for holding that Explanation III is clarificatory
in nature or retrospective in operation. Circular No. 681, dated 8 March, 1994,
which was made applicable with effect from 1 April, 1994, to the extent it
related to transport contracts is invalid. An assessee is not liable to deduct
tax at source under section 194C from payments made during the period 1 April,
1994 to 30 June, 1995 to transport operators for the transport of the cement
manufactured by it to different destinations. [Birla
Cement Works v CBDT (2001) 248 ITR 216 (SC)]
1[R117] [194D.
Insurance commission2[R118] :-
3[R119] Any person responsible for paying to a resident any income
by way of remuneration or reward, whether by way of commission or otherwise,
for soliciting or procuring insurance business (including business relating to
the continuance, renewal or revival of policies of insurance) shall, at the
time of credit of such income to the account of the payee or at the time of
payment thereof in cash or by issue of a cheque or
draft or by any other mode, whichever is earlier, deduct income-tax thereon at
the rates in force:
Provided that no deduction
shall be made under this section from any such income credited or paid before
the 1st day of June, 1973:]
4[R120] [Provided further that no deduction shall be made
under this section in a case where the amount of such income or, as the case
may be, the aggregate of the amounts of such income credited or paid or likely
to be credited or paid during the financial year to the account of, or to the
payee, does not exceed five thousand rupees.]
DEPARTMENTAL
VIEW
1. Tax at the rate of 10 per cent in the case of non-corporate
resident persons and 21.5 per cent in the case of domestic companies, needs to
be deducted at source from payments by way of insurance commission for the
financial year 1993-94. No such deduction is to be made where the amount of
such income or the aggregate thereof during the financial year does not exceed Rs. 5,000. By making an application in Form 13 it is
possible to get a certificate from the Assessing Officer for deduction of no
tax or at lower rates as the case may be. The tax deducted has to be paid to
the credit of the Central Government on the day of deduction itself. The person
deducting the tax has to furnish a certificate of tax deduction in Form 16A and
also obtain the tax deduction account number. An annual return of tax deduction
at source in Form 26D should be filed by 30th June following the financial
year. [Circular No. 656, dated 26th August, 1993]
2. Tax is deductible under this section from amounts credited
or paid after 31st May, 1973 even if the relevant amounts accrued before that
date. [Circular No. 112, dated 31st May, 1973]
3. Adjustment for intervening debits is not permissible. The
person responsible for paying insurance commission to a resident is required to
deduct tax at the time of credit of such insurance commissions to the account
of the payee or at the time of payment thereof, whichever is earlier. The
deduction of income-tax is to be made from the amount credited or paid. If the
credit to the account is made subsequent to the making of the debits the
deductions will have to be made from the full amount credited. [Circular No.
120, dated 8th October, 1973]
1[R121] [194E.
Payments to non-resident sportsmen or sports associations2[R122] :-
Where any income referred
to in section 115BBA is payable to a non-resident sportsman (including an
athlete) who is not a citizen of India or a non-resident sports association or
institution, the person responsible for making the payment shall, at the time
credit of such income to the account of the payee or at the time of payment
thereof in cash or by issue of a cheque or draft or
by any other mode, whichever is earlier, deduct income-tax thereon at the rate
of ten per cent.]
1[R123] [194EE.
Payments in respect of deposits under National Savings Scheme, etc.2[R124] :-
3[R125] The person responsible for paying to any person any amount
referred to in clause (a) of sub-section (2) of section 80CCA shall, at
the time of payment thereof, deduct income-tax thereon at the rate of twenty
per cent:
Provided that no deduction shall be made under this section where
the amount of such payment or, as the case may be, the aggregate amount of such
payments to the payee during the financial year is less than two thousand five
hundred rupees:
Provided further that nothing contained in this section shall apply
to the payment of the said amount to the heirs of the assessee.]
1[R126] [194F.
Payments on account of repurchase of units by Mutual Fund or Unit Trust of
India2[R127] :-
The person responsible for
paying to any person any amount referred to in sub-section (2) of section 80CCB
shall, at the time of payment thereof, deduct income-tax thereon at the rate of
twenty per cent.]
1[R128] [194G.
Commission, etc., on sale of lottery tickets2[R129] :-
3[R130] [(1)] Any person
who is responsible for paying, on or after the 1st day of October, 1991 to any
person, who is or has been stocking, distributing, purchasing or selling
lottery tickets, any income by way of commission, remuneration or prize (by
whatever name called) on such tickets in an amount exceeding one thousand
rupees shall, at the time of credit of such income to the account of the payee
or at the time of payment of such income in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier,
deduct income-tax thereon at the rate of ten per cent.
4[R131] [(2) & (3) Omitted by the Finance Act,
2003, w.e.f. 1-6-2003.]
Explanation.—For the purposes of
this section, where any income is credited to any account, whether called
"Suspense Account" or by any other name, in the books of account of
the person liable to pay such income, such crediting shall be deemed to be
credit of such income to the account of the payee and the provisions of this
section shall apply accordingly.]
DEPARTMENTAL
VIEW
1. Any person who is responsible for paying, on or after the
1st day of October, 1992, to any person who is or has been stocking,
distributing, purchasing or selling lottery tickets, any income by way of
commission, remuneration or prize (by whatever name called), on such tickets in
an amount exceeding Rs. 1,000 shall, at the time of
credit of such income to the account of the payee or at the time of payment of
such income in cash or by issue of a cheque or a
draft or by any other mode, whichever is earlier, deduct income-tax thereon at
the rate of 10% (plus surcharge, referred in Para
3). It is clarified in this
regard that where any such income e.g. commission, remuneration, etc., is
credited to any account, whether called "Suspense Account" or by any
other name, in the books of account of the person liable to pay such income,
such crediting shall be deemed to be credit of such income to the account of
the payee and the tax will have to be deducted at source.
The tax deducted at source
should normally be paid to the credit of the Central Government within one week
from the date of deduction. The person deducting the tax should furnish a tax
deduction certificate in Form 16A and should also obtain the tax deduction
account number. An annual return in Form 26H should be filed by 30th June. [Circular
No. 661, dated 16-9-1993]
1[R132] [194H.
Commission or brokerage2[R133] :-
Any person, not being an
individual or a Hindu undivided family, who is responsible for paying, on or
after the 1st day of June, 2001, to a resident, any income by way of commission
(not being insurance commission referred to in section 194D) or brokerage, shall,
at the time of credit of such income to the account of the payee or at the time
of payment of such income in cash or by the issue of a cheque
or draft or by any other mode, whichever is earlier, deduct income-tax thereon
at the rate of 3[R134] [ten] per cent:
Provided that no deduction shall be made under this section in a
case where the amount of such income or, as the case may be, the aggregate of
the amounts of such income credited or paid or likely to be credited or paid
during the financial year to the account of, or to, the payee, does not exceed
two thousand five hundred rupees:
4[R135] [Provided further that an individual or a Hindu
undivided family, whose total sales, gross receipts or turnover from the
business or profession carried on by him exceed the monetary limits specified
under clause (a) or clause (b) of section 44AB during the
financial year immediately preceding the financial year in which such
commission or brokerage is credited or paid, shall be liable to deduct
income-tax under this section:]
5[R136] [Provided also that no deduction shall be made under
this section on any commission or brokerage payable by Bharat
Sanchar Nigam Limited or Mahanagar Telephone Nigam Limited
to their public call office franchisees.]
Explanation.—for the purposes of
this section,—
(i) "commission
or brokerage" includes any payment received or receivable, directly or
indirectly, by a person acting on behalf of another person for services
rendered (not being professional services) or for any services in the course of
buying or selling of goods or in relation to any transaction relating to any
asset, valuable article or thing, not being securities;
(ii) the expression
"professional services" means services rendered by a person in the
course of carrying on a legal, medical, engineering or architectural profession
or the profession of accountancy or technical consultancy or interior
decoration or such other profession as is notified by the Board for the
purposes of section 44AA;
(iii) the expression
"securities" shall have the meaning assigned to it in clause (h)
of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956);
(iv) where any income is
credited to any account, whether called "Suspense account" or by any
other name, in the books of account of the person liable to pay such income,
such crediting shall be deemed to be credit of such income to the account of
the payee and the provisions of this section shall apply accordingly.]
DEPARTMENTAL
VIEW
1. The requirement of TDS under section 194H will not be
applicable in respect of turnover commission payable by the Reserve Bank of
India to the agency banks (banks authorised for
conducting Government business) for performing the general banking business of
the Central and State Governments on behalf of RBI, such as, receipt of tax
payments and issue of refunds. [Circular No. 6/2003, dated 3-9-2003]
2. Persons responsible for paying any income by way of
commission or brokerage to commission agents or dealers in food grain trade
have been exempt from the requirement of tax deduction (up to 30th September,
1992 only) provided the commission agent or dealer furnishes his permanent
account number and also a list of commission agents/dealers in whose cases tax
has not been deducted. [Notification No. SO
174E, dated 3rd March, 1992]
3. Airline companies responsible for paying any income by way
of commission or brokerage to the International Air Transport Association
approved air travel agents and air cargo agents, have been exempt from the
requirement of tax deduction at source under this section vide Notification
valid till 30th September, 1992. The air travel agents and cargo agents should
furnish their PAN to the airline companies and the airline companies should
furnish a list of such agents to whom payments have been so made without tax
deduction. [Notification No. SO 175E, dated
3rd March, 1992]
1[R137] [194-I. Rent2[R138] :-
Any person, not being an
individual or a Hindu undivided family, who is responsible for paying 3[R139] [to a resident] any income by way of rent, shall, at the
time of credit of such income to the account of the payee or at the time of
payment thereof in cash or by the issue of a cheque
or draft or by any other mode, whichever is earlier, 4[R140] [deduct income-tax thereon at the rate of
5[R141] [(a) ten per cent for the use of any machinery or
plant or equipment;
(b) fifteen per cent for
the use of any land or building (including factory building) or land
appurtenant to a building (including factory building) or furniture or fittings
where the payee is an individual or a Hindu undivided family; and
(c) twenty per cent for
the use of any land or building (including factory building) or land
appurtenant to a building (including factory building) or furniture or fittings
where the payee is a person other than an individual or a Hindu undivided
family:]
Provided that no deduction shall be made under this section where
the amount of such income or, as the case may be, the aggregate of the amounts
of such income credited or paid or likely to be credited or paid during the
financial year by the aforesaid person to the account of, or to, the payee,
does not exceed one hundred and twenty thousand rupees:
6[R142] [Provided further that an individual or a Hindu
undivided family, whose total sales, gross receipts or turnover from the
business or profession carried on by him exceed the monetary limits specified
under clause (a) or clause (b) of section 44AB during the
financial year immediately preceding the financial year in which such income by
way of rent is credited or paid, shall be liable to deduct income-tax under
this section.]
Explanation.—for the purposes of
this section,—
7[R143] [(i) "rent" means any payment, by
whatever name called, under any lease, sub-lease, tenancy or any other
agreement or arrangement for the use of (either separately or together) any,—
(a) Land; or
(b) Building (including
factory building); or
(c) Land appurtenant to
a building (including factory building); or
(d) Machinery; or
(e) Plant; or
(f) Equipment; or
(g) Furniture; or
(h) Fittings,
Whether or not any or all
of the above are owned by the payee;]
(ii) where any income is
credited to any account, whether called "Suspense account" or by any
other name, in the books of account of the person liable to pay such income,
such crediting shall be deemed to be credit of such income to the account of
the payee and the provisions of this section shall apply accordingly.]
DEPARTMENTAL
VIEWS
1. The provisions of this section are not applicable to the
cooling charges paid by the various customers to the owners of cold storages. [Circular
No. 1/2008, dated 10-1-2008]
2. Where an employee or an individual representing a company
(like a consultant, auditor, etc.) makes a payment for hotel accommodation
directly to the hotel as and when he stays there, the question of tax deduction
at source would not normally arise (except where he is covered under section
44AB) since it is the employee or such individual who makes the payment and the
company merely reimburses the expenditure. [Circular No. 5/2002, dated
30-7-2002]
3. 'Rent' in section 194-I is wide in its ambit and scope.
Payment made to hotels for hotel accommodation, whether in the nature of lease
or licence agreements are covered, so long as such
accommodation has been taken on 'regular basis'. Where earmarked rooms are let
out for a specified rate and specified period or the hotel has a legal
obligation to provide certain types of rooms during the currency of the
agreement, they will be construed to be accommodation made available on a
regular basis'. However, where an agreement is merely in the nature of a rate
contract, it cannot be said to be accommodation "taken on regular
basis" as there is no obligation on the part of the hotel to provide a
room or specified set of rooms. [Circular No. 5/2002, dated 30-7-2002]
4. The Sri Sathya Sai Central Trust, Sri Sathya Sai Medical Trust and Sri Sathya Sai Institute of Higher Learning, Bangalore, whose incomes
are exempt under section 10, be paid rent without tax deduction at source for
assessment years 2003-2004 and 2004-2005. [Circular No. 12/2002, dated
22-11-2002]
5. The provisions of section 194-I are not
attracted to the sharing of the proceeds of film exhibition between a film
distributor and a film exhibitor owning a cinema theatre. [Circular No. 736,
dated 13-2-1996]
6. Since the income of Regimental Fund or Non-public Fund
established by the Armed Forces of the Union are exempt under section 10(23AA),
it has been decided that no tax may be deducted at source under sections 193
and 194-I from the income of such funds. [Circular No. 735, dated 30-1-1996]
7. See Circular Nos. 715, dated 8-8-1995 and 718, dated 22-8-1995
answering a number of questions in respect of the scope and ambit of TDS to be
made.
8. There is no requirement to deduct income-tax at source on
income by way of 'rent' if the payee is the Government. So also, in the case of
local authorities under section 10(20) and statutory authorities under section
10(20A), there will be no requirement to deduct income-tax at source from
income by way of rent if the person responsible for paying it is satisfied
about their tax-exempt status under clause (20) or (20A) of section 10 on the
basis of a certificate to this effect given by the said authorities. [Circular
No. 699, dated 30th January, 1995]
1[R144] [194 J. Fees for
professional or technical services2[R145] :-
3[R146] (1 Any person, not being an individual or a Hindu undivided
family, who is responsible for paying to a resident any sum by way of—
(a)
Fees for professional services, or
(b)
Fees for technical services, 4[R147] [or]
(d)
Any sum referred to in clause (va) of section 28,]
shall, at the time of
credit of such sum to the account of the payee or at the time of payment
thereof in cash or by issue of a cheque or draft or
by any other mode, whichever is earlier, deduct an amount equal to 6[R149] [ten] per cent of such sum as income-tax on income
comprised therein:
Provided that no deduction shall be made under this section—
(A) From any sums as aforesaid
credited or paid before the 1st day of July, 1995; or
(B) where the amount of such sum
or, as the case may be, the aggregate of the amounts of such sums credited or
paid or likely to be credited or paid during the financial year by the
aforesaid person to the account of, or to, the payee, does not exceed—
(i) twenty thousand rupees, in the case of fees for professional
services referred to in clause (a), or
(ii) twenty thousand rupees, in the case of fees for
technical services referred to in clause (b), 7[R150] [or]
8[[R151] (iii) twenty thousand rupees in the case of royalty
referred to in clause (c), or
(iv) twenty
thousand rupees in the case of sum referred to in clause (d):]
9[R152] [Provided further that an individual or a Hindu
undivided family, whose total sales, gross receipts or turnover from the
business or profession carried on by him exceed the monetary limits specified
under clause (a) or clause (b) of section 44AB during the
financial year immediately preceding the financial year in which such sum by
way of fees for professional services or technical services is credited or
paid, shall be liable to deduct income-tax under this section:]
10[R153] [Provided also that no individual or a Hindu
undivided family referred to in the second proviso shall be liable to deduct
income-tax on the sum by way of fees for professional services in case such sum
is credited or paid exclusively for personal purposes of such individual or any
member of Hindu undivided family.]
11[R154] [(2) & (3) Omitted by the Finance Act,
2003, w.e.f. 1-6-2003.]
Explanation.—For the purposes of this section,—
(a) "professional services" means
services rendered by a person in the course of carrying on legal, medical,
engineering or architectural profession or the profession of accountancy or
technical consultancy or interior decoration or advertising or such other
profession as is notified by the Board for the purposes of section 44AA or of
this section;
(b) "fees for
technical services" shall have the same meaning as in Explanation 2
to clause (vii) of sub-section (1) of section 9;
12[R155] [(ba) "royalty"
shall have the same meaning as in Explanation 2 to clause (vi) of sub-section (1) of section 9;]
(c)
where any sum referred to in sub-section (1) is credited to any account,
whether called "Suspense account" or by any other name, in the books
of account of the person liable to pay such sum, such crediting shall be deemed
to be credit of such sum to the account of the payee and the provisions of this
section shall apply accordingly.]
DEPARTMENTAL
VIEW
1. Any fees paid through regular banking channels to any
chartered accountant, lawyer, advocate or solicitor who is resident in India by
the non-residents who do not have any agent or business connection or permanent
establishment in India may not be subjected to the provisions of tax deduction
at source. However, foreign companies or foreign law and accountancy firms are
required to send a quarterly statement, indicating the name and address of the
person to whom payments are made, to the Deputy Secretary, Foreign Tax Division
CBDT, Department of Revenue, Ministry of Finance, New Delhi. [Circular No.
726, dated 18-10-1995] The Board has since reconsidered the matter and
advised that as the details of payments made to the Indian residents can easily
be verified or collected wherever required, it has
been decided to discontinue with immediate effect the requirement of sending
the above quarterly returns. [Circular No. 766, dated 24-4-1998]
2. See Circular Nos. 715, dated 8-8-1995 and 716, dated 9-8-1995
answering questions relating to the scope and ambit of TDS to be made.
3. Tax will be deducted at source under this section from
payments made for professional purposes. Thus, when an advertising agency makes
payments for professional services to a film artist such as an actor, a
cameraman, a director, etc., tax will be deducted at the rate of 5 per cent. [Circular
No. 714, dated 3-8-1995]
1[R156] [194K.
Income in respect of units2[R157] :-
3[R158] Where any income is payable to a resident in respect of
units of a Mutual Fund specified under clause (23D) of section 10 or of the
Unit Trust of India, the person responsible for making the payment shall, at
the time of credit of such income to the account of payee or at the time of
payment thereof in cash or by issue of a cheque or
draft or by any other mode, whichever is earlier, deduct income-tax thereon at
the rate of ten per cent:
Provided that the provisions of this section shall not apply where
the amount of such income or, as the case may be, the aggregate of the amounts
of such income credited or paid or likely to be credited or paid during the
financial year by the person responsible for making the payment to the account
of, or to, the payee does not exceed 4[R159] [two thousand five hundred] rupees:
Provided further that the amount of one thousand rupees shall be
computed with reference to the income credited or paid—
(a)
In respect of a branch office of the Mutual Fund or of the Unit Trust of India,
as the case may be, and
(b)
Under a particular scheme under which the units have been issued:
5[R160] [Provided also that no deduction shall be made under
this section from any such income credited or paid on or after the 1st day of
April, 2003.]
Explanation.—For the purposes of this section,—
(a)
"Unit Trust of India" means the Unit Trust of India established under
the Unit Trust of India Act, 1963 (52 of 1963);
(b)
where any income as aforesaid is credited to any account, whether called
"Suspense account" or by any other name, in the books of account of
the person liable to pay such income, such crediting shall be deemed to be
credit of such income to the account of the payee and the provisions of this
section shall apply accordingly.]
DEPARTMENTAL
VIEW
1. The threshold limit for the purpose of tax deduction at
source from income in respect of units increased from Rs.
1,000 to Rs. 2,500 with immediate effect. [Circular
No. 6/2002, dated 2-8-2002]
2. The income in respect of units of a Mutual Fund specified
under section 10(23D) or of the Unit Trust of India may be paid to the
Ramakrishna Math and Ramakrishna Mission, whose income is exempt under section
10(23C)(iv), without deduction of income-tax at source. The provisions
of this circular shall be applicable from the financial year 2002-2003. [Circular
No. 3/2002, dated 28-6-2002]
Likewise, Sri Sathya Sai Central Trust, Sri Sathya Sai Medical Trust and Sri Sathya Sai Institute of Higher
Learning, Bangalore [Circular No. 12/2002, dated 22-11-2002]; Shri Ram Chandra Mission Chennai [Circular No. 2/2003,
dated 11-3-2003] and World Renewal Spirictual
Trust, Mumbai [Circular No. 3/2003, dated 11-3-2003], whose incomes are
exempt under section 10, be paid income in respect of units of a Mutual Fund
specified under section 10(23D) or of the Unit Trust of India without tax
deduction at source for assessment years 2003-2004 and 2004-2005.
3. See Circular Nos. 715, dated 8-8-1995 and 716, dated 9-8-1995
answering questions relating to the scope and ambit of TDS to be made.
1[R161] [194L.
Payment of compensation on acquisition of capital asset2[R162] :-
Any person responsible for
paying to a resident any sum being in the nature of compensation or the
enhanced compensation or the consideration or the enhanced consideration on
account of compulsory acquisition, under any law for the time being in force, of
any capital asset shall, at the time of payment of such sum in cash or by issue
of a cheque or draft or by any other mode, whichever
is earlier, deduct an amount equal to ten per cent of such sum as income-tax on
income comprised therein:
Provided that no deduction shall be made under this section where
the amount of such payment or, as the case may be, the aggregate amount of such
payments to a resident during the financial year does not exceed one hundred
thousand rupees:]
3[R163] [Provided further that no deduction shall be made
under this section from any payment made on or after the 1st day of June,
2000.]
1[R164] [194LA.
Payment of compensation on acquisition of certain immovable property2[R165] :-
Any person responsible for
paying to a resident any sum, being in the nature of compensation or the enchanced compensation or the consideration or the enhanced
consideration on account of compulsory acquisition, under any law for the time
being in force, of any immovable property (other than agricultural land),
shall, at the time of payment of such sum in cash or by issue of a cheque or draft or by any other mode, whichever is earlier,
deduct an amount equal to ten per cent of such sum as income-tax thereon:
Provided that no deduction shall be made under this section where
the amount of such payment or, as the case may be, the aggregate amount of such
payments to a resident during the financial year does not exceed one hundred
thousand rupees.
Explanation.—
For the purposes of this section,—
(i) "agricultural
land" means agricultural land in India including land situate in any area
referred to in items (a) and (b) of sub-clause (iii) of
clause (14) of section 2;
(ii)
"immovable property" means any land (other
than agricultural land) or any building or part of a building.]
1[R166] 195.
Other sums2[R167] :-
3[R168] [(1) Any person
responsible for paying to a non-resident, not being a company, or to a foreign
company, any interest 4[R169] [* * *] or any other sum chargeable under the provisions of
this Act (not being income chargeable under the head "Salaries" 5[R170] [* * *]) shall, at the time of credit of such income to the
account of the payee or at the time of payment thereof in cash or by the issue
of a cheque or draft or by any other mode, whichever
is earlier, deduct income-tax thereon at the rates in force;
6[R171] [Provided that in the case of interest payable by
the Government or a public sector bank within the meaning of clause (23D) of
section 10 or a public financial institution within the meaning of that clause,
deduction of tax shall be made only at the time of payment thereof in cash or
by the issue of a cheque or draft or by any other
mode:]
7[R172] [Provided further that no such deduction shall be
made in respect of any dividends referred to in section 115-O.]
Explanation.—For the purposes of
this section, where any interest or other sum as aforesaid is credited to any
account, whether called "Interest Payable Account" or "Suspense
Account" or by any other name, in the books of account of the person
liable to pay such income, such crediting shall be deemed to be credit of such
income to the account of the payee and the provisions of this section shall
apply accordingly.]
(2) Where the person responsible for paying
any such sum chargeable under this Act 8[R173] [(other than salary)] to a non-resident considers that the
whole of such sum would not be income chargeable in the case of the recipient,
he may make an application9[R174] to the 10[R175] [Assessing] Officer to determine, 11[R176] [by general or special order], the appropriate proportion
of such sum so chargeable, and upon such determination, tax shall be deducted
under sub-section (1) only on that proportion of the sum which is so
chargeable:
[Omitted
by the Finance (No. 2) Act, 1991, w.e.f.
1-10-1991. It was inserted by
the Finance Act, 1987, w.e.f. 1-6-1987.]
12[R177] [(3) Subject to
rules made under sub-section (5), any person entitled to receive any interest
or other sum on which income-tax has to be deducted under sub-section (1) may
make an application in the prescribed form to the 13[R178] [Assessing] Officer for the grant of a certificate authorising him to receive such interest or other sum
without deduction of tax under that sub-section, and where any such certificate
is granted, every person responsible for paying such interest or other sum to
the person to whom such certificate is granted shall, so long as the
certificate is in force, make payment of such interest or other sum without
deducting tax thereon under sub-section (1).
(4)
A certificate granted under
sub-section (3) shall remain in force till the expiry of the period specified
therein or, if it is cancelled by the 14[R179] [Assessing] Officer
before the expiry of such period, till such cancellation.
(5) The Board may, having regard to the
convenience of assessees and the interests of revenue, by notification in the
Official Gazette, make rules15[R180] specifying the cases in
which, and the circumstances under which, an application may be made for the
grant of a certificate under sub-section (3) and the conditions subject to
which such certificate may be granted and providing for all other matters
connected therewith.]
16[R181] [(6) The person referred to in sub-section (1)
shall furnish the information relating to payment of any sum in such form
and manner as may be prescribed by the Board.]
DEPARTMENTAL
VIEW
1. Tax is required to be deducted at source under section 193
or section 195, as the case may be, only at the time of redemption of bonds,
irrespective of whether the income from the bonds has been declared by the
bond-holder on accrual basis from year to year or is declared only in the year
of redemption. In case of persons having declared income on annual accrual
basis, upon making of an application under section 197 or 197A, as the case may
be, the Assessing Officer shall issue a certificate allowing the tax deduction
at source at such reduced rate as is justified by the total income of the
applicant in the year of redemption. [Circular No. 4/2004, dated 13-5-2004]
2. Deduction of tax at source arises only if the payment is
chargeable to tax in India. Where the non-resident agent of an exporter
operates outside the country and the payment is remitted directly abroad, no
part of his income arises in India. No tax is therefore deductible under
section 195. [Circular No. 786, dated 7th February, 2000]
3. Remittances to NRIs may be
allowed by the RBI without insisting upon a No Objection Certificate from the
Income-tax Department and on the person making the remittance furnishing an
undertaking in duplicate in the specified form along with a certificate from an
accountant other than an employee. The person making the remittance shall
submit the undertaking along with the said certificate of the accountant to the
RBI, who in turn shall forward a copy thereof to the Assessing Officer. (For
specimen undertaking/Certificate see Circular No. 10/2002, dated 9-10-2002, reproduced in Appendix 1, post). [Circular No. 759, dated
18-11-1997]
4. Pursuant to Circular No. 759, RBI issued a circular to all authorised dealers in foreign exchange directing them to
forward a copy of the certificate together with a copy of the Undertaking to
the office of the Assessing Officer of the Income-tax Department as indicated
in the Undertaking. Circular No. 759 will also be applicable to remittances
made through authorised dealers in foreign exchange.
The Undertaking to be submitted at the time of making a remittance to a
non-resident shall be signed by the person authorised
to sign a return of income of the person making the payment or a person so authorised by him in writing. [Circular No. 767,
dated 22-5-1998]
5. Taxability of interest remitted by branches of banks to the
head office abroad.—The
branch of a foreign company/concern in India is a separate entity for the
purposes of taxation. Interest remitted by a branch in India to its head office
or a branch abroad on the lines of credit arranged under the Foreign Currency
Packing Credit Scheme (FCPCS) for Indian exporters would be chargeable to tax
in India and tax would have to be deducted accordingly on the interest
remitted. [Circular No. 740, dated 17-4-1996]
6. Import of software.—Where
a tax payer engaged in the business of export of software for computer
application, imports any systems software, supplied by the manufacturer of the
computer hardware along with the hardware itself, the lump sum payment made to
the foreign supplier for acquisition of any right in relation to or for use of
such systems software will not be liable to tax in India as payment by way of
royalty or otherwise. Such lump sum payments will be allowed to be made without
deduction of tax at source. [Circular No. 588, dated 2nd January, 1991]
7. Remittance to a country with which DTAA exists.—In case of a remittance to a country with which a Double
Taxation Avoidance Agreement is in force, the tax should be deducted at the
rate provided in the Finance Act of the relevant year or at the rate provided
in the Double Taxation Avoidance Agreement, whichever is more beneficial to the
assessee. [Circular No. 728, dated 30-10-1995]
8. Payments to non-residents.—In order to simplify and to bring uniformity in the form of
application to be made by the remitter and the authorisation
to be issued, the Board has issued non-statutory forms for the purpose. [Circular
No. 695, dated 28th November, 1994, reproduced in Appendix 1, post.]
9. Where the amount payable to a non-resident is stipulated to
be paid to him net of taxes the income chargeable to tax in the hands of the
recipient is determined by grossing up the net of tax payment to such an amount
as would after deducting the tax on such gross amount leave the stipulated net
amount of income. Accordingly the sum chargeable to tax in the hands of the
non-resident recipient would be this grossed up amount and it is with reference
to this grossed up amount that tax has to be deducted as required by section
195. [Circular No. 370, dated 3rd October, 1983]
10. Where the person responsible for paying any sum to
non-resident considers that the whole amount thereof would not be chargeable in
the case of the recipient non-resident, he may make an application to the ITO
for the determination of the appropriate portion of such payment which would be
taxable and the respect of which tax is to be deducted at source [Circular
No. 152, dated 27th November, 1974]
1[R182] [195A.
Income payable "net of tax":-
2[[R183] In a case other than that referred to in sub-section (1A)
of section 192,] where, under an agreement or other arrangement, the tax
chargeable on any income referred to in the foregoing provisions of this
Chapter is to be borne by the person by whom the income is payable, then, for
the purposes of deduction of tax under those provisions such income shall be
increased to such amount as would, after deduction of tax thereon at the rates
in force for the financial year in which such income is payable, be equal to
the net amount payable under such agreement or arrangement.]
DEPARTMENTAL
VIEW
1. Where under an agreement/arrangement, the tax chargeable on
any income is borne by the payer of the income; he is still under a legal
obligation to furnish a certificate for the tax deducted at source in the
prescribed form to the payee within the prescribed time. [Circular No. 785,
dated 24th November, 1999]
1[R184] [196.
Interest or dividend or other sums payable to Government, Reserve Bank or
certain corporations:-
Notwithstanding anything
contained in the foregoing provisions of this Chapter, no deduction of tax
shall be made by any person from any sums payable to—
(i) The
Government, or
(ii) The Reserve Bank of
India, or
(iii) A corporation established
by or under a Central Act which is, under any law for the time being in force,
exempt from income-tax on its income, or
(iv) A Mutual Fund specified under clause (23D) of section 10,
where such sum is payable
to it by way of interest or dividend in respect of any securities or shares
owned by it or in which it has full beneficial interest, or any other income
accruing or arising to it.]
1[R185] [196A.
Income in respect of units of non-residents2[R186] :-
(1) Any person responsible for paying to a
non-resident, not being a company, or to a foreign company, any income in
respect of units of a Mutual Fund specified under clause (23D) of section 10 or
of the Unit Trust of India shall, at the time of credit of such income to the
account of the payee or at the time of payment thereof in cash or by the issue
of a cheque or draft or by any other mode, whichever
is earlier, deduct income-tax thereon at the rate of twenty per cent:
3[R187] [Provided that no deduction shall be made under this
section from any such income credited or paid on or after the 1st day of April,
2003.]
(2)
Notwithstanding anything contained
in sub-section (1), no deduction of tax shall be made from any income payable
in respect of units of the Unit Trust of India to a non-resident Indian or a non-resident
Hindu undivided family, where the units have been acquired from the Unit Trust
of India out of the funds in a Non-resident (External) Account maintained with
any bank in India or by remittance of funds in foreign currency, in accordance,
in either case, with the provisions of the Foreign Exchange Regulation Act,
1973 (46 of 1973), and the rules made there under.
Explanation.—For the purposes of this section—
(a)
"Foreign currency" shall have
the meaning assigned to it in the Foreign Exchange Regulation Act, 19734[R188] (46 of 1973);
(b)
"Non-resident Indian" shall
have the meaning assigned to it in clause (e) of section 115C;
(c)
"Unit Trust of India" means the Unit Trust of India established under
the Unit Trust of India Act, 1963 (52 of 1963);
(d)
where any income as aforesaid is credited to any account, whether called
"Suspense account" or by any other name, in the books of account of
the person liable to pay such income, such crediting shall be deemed to be
credit of such income to the account of the payee and the provisions of this
section shall apply accordingly.]
1[R189] [196B.
Income from units2[R190] :-
3[R191] [Where any income in respect of units referred to in
section 115AB or by way of long-term capital gains arising from the transfer of
such units is payable to an Offshore Fund], the person responsible for making
the payment shall, at the time of credit of such income to the account of the
payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier,
deduct income-tax thereon at the rate of ten per cent.]
1[R192] [196C.
Income from foreign currency bonds or shares of Indian company2[R193] :-
3[R194] [Where any income by way of interest or dividends in
respect of bonds or 4[R195] [Global Depository Receipts] referred to in section 115AC
or by way of long-term capital gains arising from the transfer of such bonds or
5[R196] [Global Depository Receipts] is payable to a non-resident],
the person responsible for making the payment shall, at the time of credit of
such income to the account of the payee or at the time of payment thereof in
cash or by the issue of a cheque or draft or by any
other mode, whichever is earlier, deduct income-tax thereon at the rate of ten
per cent:]
6[R197] [Provided that no such deduction shall be made in
respect of any dividends referred to in section 115-O.]
1[R198] [196D.
Income of Foreign Institutional Investors from securities2[R199] :-
(1)
Where any income in respect of
securities referred to in clause (a) of sub-section (1) of section 115AD
is payable to a Foreign Institutional Investor, the person responsible for
making the payment shall, at the time of credit of such income to the account
of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier,
deduct income-tax thereon at the rate of twenty per cent:
3[R200] [Provided that no such deduction shall be made in
respect of any dividends referred to in section 115-O.]
(2)
No deduction of tax shall be made
from any income, by way of capital gains arising from the transfer of
securities referred to in section 115AD, payable to a Foreign Institutional
Investor.]
197. Certificate for deduction at lower rate1[R201] :-
(1)
2[R202] [Subject to rules made under sub-section (2A),] 3[R203] [where, in the case of any income of any person 4[R204] [or sum payable to any person], income-tax is required to
be deducted at the time of credit or, as the case may be, at the time of
payment at the rates in force under the provisions of sections 192, 193, 5[R205] [194,] 6[R206] [194A, 194C, 194D, 194G, 194H, 194-I, 194J, 194K] 7[R207] [, 194LA] and 195, the Assessing Officer is satisfied] that
the total income 8[R208] [* * *] of the recipient justifies the deduction of
income-tax 9[R209] [* * *] at any lower rates or no deduction of income-tax 10[R210] [* * *], as the case may be, the 11[R211] [Assessing] Officer shall, on an application12[R212] made by the assessee in
this behalf, give to him such certificate as may be appropriate.13[R213]
(2)
Where any such certificate is
given, the person responsible for paying the income shall, until such
certificate is cancelled by the 14[[R214] Assessing] Officer, deduct income-tax 1[R215] 5[* * *] at the rates
specified in such certificate or deduct no tax, as the case may be.
16[R216] [(2A) The Board
may, having regard to the convenience of assessees and the interests of
revenue, by notification in the Official Gazette, make rules specifying the
cases in which, and the circumstances under which, an application may be made
for the grant of a certificate under sub-section (1) and the conditions subject
to which such certificate may be granted and providing for all other matters
connected therewith.]
[(3) Omitted
by the Finance Act, 1986, w.e.f. 1-4-1987. It was substituted by the Finance (No. 2) Act, 1967, w.e.f.
1-4-1968.]
DEPARTMENTAL
VIEW
1. The certificate issued under section 197(1) will be
applicable only in respect of credit or payments, as the case may be, subject
to tax deduction at source, made on or after the date of such certificate. No
certificate under section 197(1) should be issued after the amounts subject to
tax deduction at source stand credited or paid, whichever is earlier. [Circular
No. 774, dated 17-3-1997]
2. Rule 29(2) did not bar an assessee from making an
application for a fresh certificate for the succeeding period sometime before
the expiry of the earlier certificate. Applications for the issue of fresh
certificates should be dealt with expeditiously. [Letter No. 1(54)-63
TPL, dated 18th May, 1963]
3. Applications made by trusts for the issue of certificate
for deduction of tax at lower rates or without deduction of tax, should be
expeditiously dealt with so that the trusts could collect their interest and
dividend income without delay. The certificates issued by the Income-tax
Officers could be reviewed by them once in three years. [Letter No.
20/23/67, dated 28th July, 1967]
1[R217] [197A. No
deduction to be made in certain cases2[R218] :-
(1)
Notwithstanding anything contained
in 3[R219] [* * *] section 194 4[R220] [* * *] 5[R221] [or section 194EE], no deduction of tax shall be made under
any of the said sections in the case of an individual, who is resident in
India, if such individual furnishes to the person responsible for paying any
income of the nature referred to in 6[R222] [* * *] section 194 7[R223] [8[R224] [* * *] or, as the case may be, section 194EE], a
declaration in writing in duplicate in the prescribed form9[R225] and verified in the
prescribed manner to the effect that 10[R226] [the tax on his estimated total income of the previous year
in which such income is to be included in computing his total income will be n
11[R227] [(1A) Notwithstanding anything contained in 12[R228] [section 193 or] section 194A or section 194K, no deduction
of tax shall be made under 13[R229] [any] of the said sections in the case of a person (not
being a company or a firm), if such person furnishes to the person responsible
for paying any income of the nature referred to in 14[R230] [section 193 or] section 194A or section 194K, as the case
may be, a declaration in writing in duplicate in the prescribed form15[R231] and verified in the
prescribed manner to the effect that the tax on his estimated total income of
the previous year in which such income is to be included in computing his total
income will be nil.]
16[R232] [(1B) The provisions of this section shall not apply where
the amount of any income of the nature referred to in sub-section (1) or
sub-section (1A), as the case may be, or the aggregate of the amounts of such
incomes credited or paid or likely to be credited or paid during the previous
year in which such income is to be included exceeds the maximum amount which is
not chargeable to income-tax.17[R233] ]
18[R234] [(1C) Notwithstanding anything contained in section 193 or
section 194 or section 194A or section 194EE or section 194K or sub-section
(1B) of this section, no deduction of tax shall be made in the case of an
individual resident in India, who is of the age of sixty-five years or more at
any time during the previous year 19[R235] [* * *], if such individual furnishes to the person
responsible for paying any income of the nature referred to in section 193 or
section 194 or section 194A or section 194EE or section 194K, as the case may
be, a declaration in writing in duplicate in the prescribed form20[R236] and verified in the
prescribed manner to the effect that the tax on his estimated total income of
the previous year in which such income is to be included in computing his total
income will be nil.]
21[R237] [(1D) Notwithstanding anything contained in this section,
no deduction of tax shall be made by the Offshore Banking Unit from the
interest paid—
(a)
On deposit made on or after the 1st day of April, 2005, by a non-resident or a
person not ordinarily resident in India; or
(b) On borrowing, on or after the 1st
day of April, 2005, from a non-resident or a person not ordinarily resident in
India.
Explanation.—For the purposes of
this sub-section "Offshore Banking Unit" shall have the same meaning
as assigned to it in clause (u) of section 21 of the Special Economic
Zones Act, 200522[R238] .]
(2)
The person responsible for paying
any income of the nature referred to in sub-section (1) 23[R239] [or sub-section (1A)] 24[R240] [or sub-section (1C)] shall deliver or cause to be
delivered to the 25[R241] [Chief Commissioner or Commissioner] one copy of the
declaration referred to in sub-section (1) 26[R242] [or sub-section (1A)] 27[R243] [or sub-section (1C)] on or before the seventh day of the
month next following the month in which the declaration is furnished to him.]
DEPARTMENTAL
VIEW
1. In case of funds or authorities or boards or bodies, by
whatever name called, whose income is unconditionally exempt under section 10
and who are statutorily not required to file return of income as per section
139, there will be no requirement for tax deduction at source since their
income is any way exempt under the Income-tax Act. [Circular No. 4/2002,
dated 16-7-2002]
2. The facility of claiming payments of interest on
securities, dividends, etc. is available only in respect of individuals who are
resident in India. Accordingly, it is not permissible for HUFs
and other categories of taxpayers to claim payments of interest on securities,
dividends, etc. without deduction of tax at source on furnishing the
declaration in Form 15F, 15G or 15H. [Circular No. 351, dated 26th November,
1982]
198. Tax deducted is income received:-
All sums deducted in
accordance with the provisions of 1[R244] [the foregoing provisions of this Chapter] shall, for the
purpose of computing the income of an assessee, be deemed to be income
received:
2[R245] [Provided that the sum being the tax paid, under
sub-section (1A) of section 192 for the purpose of computing the income of an
assessee, shall not be deemed to be income received.]
1[R246] [199.
Credit for tax deducted:-
(1)
Any deduction made in accordance
with the foregoing provisions of this Chapter and paid to the Central
Government shall be treated as a payment of tax on behalf of the person from
whose income the deduction was made, or of the owner of the security, or of the
depositor or of the owner of property or of the unit-holder, or of the
shareholder, as the case may be.
(2)
Any sum referred to in sub-section
(1A) of section 192 and paid to the Central Government shall be treated as the
tax paid on behalf of the person in respect of whose income such payment of tax
has been made.
(3)
The Board may, for the purposes of
giving credit in respect of tax deducted or tax paid in terms of the provisions
of this Chapter, make such rules as may be necessary, including the rules for
the purposes of giving credit to a person other than those referred to in
sub-section (1) and sub-section (2) and also the assessment year for which such
credit may be given.]
DEPARTMENTAL
VIEW
1. Where advance rent is spread over more than one financial
year and tax is deducted thereon, credit shall be allowed in the same
proportion in which such income is offered for taxation for different
assessment years based on the single certificate furnished for tax so deducted
on the entire advance rent. [Circular No. 5/2001, dated 2nd March, 2001]
2. Where, subsequent to the deduction of tax at source on
advance rent pertaining to one or more financial years, the rent agreement gets
terminated/ cancelled resulting into refund of balance amount of advance rent
to the tenant or rented property is transferred by way of sale, lease, gift,
etc. resulting into refund of balance amount of advance rent to the transferee
or the tenant, credit for the entire balance of tax deducted at source, which
has not been given credit so far, shall be allowed in the assessment year
relevant to the financial year during which the rent agreement gets terminated/cancelled
or rented property is transferred and balance of advance rent is refunded to
the transferee or the tenant, as the case may be. [Circular No. 5/2001, dated
2nd March, 2001.]
3. The gross dividend receivable by the registered shareholder
on behalf of the beneficial shareholder will be assessed in the hands of the
latter as 'income from other sources' in the year in which it is declared,
distributed or paid and not as dividend. He will not be given credit for tax
deducted at source. Credit for the tax deducted at source will be given to the
registered shareholder if he files an application for refund under section
237(1). [Circular No. 3D, dated 30th March, 1967]
200. Duty of person deducting tax:-
1[R247] [(1)] 2[R248] Any
person deducting any sum in accordance with 3[R249] [the foregoing provisions of this Chapter] shall pay within
the prescribed time, the sum so deducted to the credit of the Central
Government or as the Board directs.
4[R250] [(2) Any person
being an employer, referred to in sub-section (1A) of section 192 shall pay,
within the prescribed time, the tax to the credit of the Central Government or
as the Board directs.]
5[R251] [(3) Any person
deducting any sum on or after the 1st day of April, 2005 in accordance with the
foregoing provisions of this Chapter or, as the case may be, any person being
an employer referred to in sub-section (1A) of section 192 shall, after paying
the tax deducted to the credit of the Central Government within the prescribed
time, prepare quarterly statements for the period ending on the 30th June, the
30th September, the 31st December and the 31st March in each financial year and
deliver or cause to be delivered to the prescribed income-tax authority or the
person authorised by such authority such statement in
such form and verified in such manner and setting forth such particulars and
within such time as may be prescribed.6[R252] ]
DEPARTMENTAL
VIEW
1. The use of computerised challan forms for depositing tax deducted at source has
been permitted provided these are the exact replica of the one in use
officially having same format, colour and may be
similar in size. [Circular No. 796, dated 10th October, 2000]
201. Consequences of failure to deduct or pay1[R253] :-
2[R254] [(1) Where any
person, including the principal officer of a company,—
(a) Who is required to deduct
any sum in accordance with the provisions of this Act; or
(b) referred to in sub-section
(1A) of section 192, being an employer, does not deduct, or does not pay, or
after so deducting fails to pay, the whole or any part of the tax, as required
by or under this Act, then, such person, shall, without prejudice to any other
consequences which he may incur, be deemed to be an assessee in default in
respect of such tax:
Provided that no penalty shall be charged under section 221 from
such person, unless the Assessing Officer is satisfied that such person,
without good and sufficient reasons, has failed to deduct and pay such tax.]
3[R255] [(1A) Without prejudice to the provisions of sub-section
(1), if any such person, principal officer or company as is referred to in that
sub-section does not deduct 4[R256] [the whole or any part of the tax] or after deducting fails
to pay the tax as required by or under this Act, he or it shall be liable to
pay simple interest at 5[R257] [one per cent for every month or part of a month] on
the amount of such tax from the date on which such tax was deductible to the
date on which such tax is actually paid 6[R258] [and such interest shall be paid before furnishing the
quarterly statement for each quarter in accordance with the provisions of
sub-section (3) of section 200.]]
(2) Where the tax
has not been paid as aforesaid after it is deducted, 7[R259] [the amount of the tax together with the amount of simple
interest thereon referred to in sub-section (1A)] shall be a charge upon all
the assets of the person, or the company, as the case may be, referred to in
sub-section (1).]
202. Deduction only one mode of recovery:-
The power to 1[R260] [recover] tax by deduction under 2[R261] [the foregoing provisions of this Chapter] shall be without
prejudice to any other mode of recovery.
1[203.
Certificate for tax deducted2:-
3[R262] [(1)] 4[R263] Every person deducting tax in accordance with 5[R264] [the foregoing provisions of this Chapter] 6[R265] [shall, within such period as may be prescribed from the
time of credit or payment of the sum, or, as the case may be, from the time of
issue of a cheque or warrant for payment of any
dividend to a shareholder], furnish to the person to whose account such credit
is given or to whom such payment is made or the cheque
or warrant is issued, a certificate to the effect that tax has been deducted,
and specifying the amount so deducted, the rate at which the tax has been
deducted and such other particulars as may be prescribed.]
7[R266] [(2) Every
person, being an employer, referred to in sub-section (1A) of section 192
shall, within such period, as may be prescribed, furnish to the person in
respect of whose income such payment of tax has been made, a certificate to the
effect that tax has been paid to the Central Government, and specify the amount
so paid, the rate at which the tax has been paid and such other particulars as
may be prescribed.]
8[R267] [(3) Where the
tax has been deducted or paid in accordance with the foregoing provisions of
this Chapter on or after the 1st day of April, 9[R268] [2010], there shall be no requirement to furnish a
certificate referred to in sub-section (1) or, as the case may be, sub-section
(2).]
DEPARTMENTAL
VIEW
1. The detectors, at their option, have been allowed in
respect of the tax to be deducted at source from income chargeable under the
head "Salaries" to use their digital signatures to authenticate the
certificate of deduction of tax at source in Form No. 16. [Circular No.
2/2007, dated 21-5-2007]
2. Where the truck or such other goods carriages is booked by
the consignor but the payment is made by the consignee on delivery of the
goods, the Board has advised the consignee to issue TDS certificate in the
cases of the truck/goods-in-carriage operators within the prescribed time and
in favour of such trucks/goods-carriage operators. [Circular
No. 6/2006, dated 23-6-2006]
3. Even where the payer of income agrees to bear the tax on
such income and make payment only 'net of tax' or where under an
agreement/arrangement, the tax chargeable on any income is borne by the payer
of the income, he is still under an obligation to furnish a certificate for the
tax deducted at source in the prescribed form to the payee within the
prescribed time. [Circular No. 785, dated 24th November, 1999]
4. The TDS certificates issued by Drawing and Disbursing
Officers (DDOs) do not carry details like challan numbers, dates of payment into Government account,
etc. where the taxes so deducted are being paid into Government account by book
adjustment as a result of which such TDS certificates are rejected by the
Assessing Officers. It has been decided that the TDS certificates issued by the
Central Government Departments should be accepted by Assessing Officers if it
indicates that credit has been afforded to the Income-tax Department by book
adjustment and the date of such book adjustment is indicated therein. [Circular
No. 749, dated 27th December, 1996]
5. In the light of the experience gained from the use of Form
No. 16B and with a view to further streamlining the work of issue of
certificates for tax deducted at source, the Central Government have decided to discontinue the use of Form No. 16B and to
substitute it with Form No. 16A, w.e.f. 1-7-1993.
[Circular No. 664, dated 29th September, 1993]
6. With a view to streamlining the work of issue of
certificates for tax deducted at source and avoiding the problems experienced
in the use of unified Form 16, the Central Government introduced a new scheme
for the issue of these certificates. Instead of Form 16 three different Forms
16, 16A and 16B have been introduced. The annual return for tax deduction from
salaries which was required to be filed by 30th April every year needs to be
filed by 31st May. The form of return has also been modified. [Circular No.
597, dated 27th March, 1991]
1[R269] [203A. Tax
deduction and collection account number2[R270] :-
3[R271] (1) Every
person, deducting tax or collecting tax in accordance with the provisions of
this Chapter, who has not been allotted a tax-deduction account number or, as
the case may be, a tax-collection account number, shall within such time as may
be prescribed, apply to the Assessing Officer for the allotment of a
"tax-deduction and collection-account number".
(2)
Where a "tax deduction account
number" or, as the case may be, a "tax-collection account
number" or a "tax deduction and collection account number" has
been allotted to a person, such person shall quote such number—
(a) In all challans for the payment of any sum in accordance with the
provisions of section 200 or sub-section (3) of section 206C;
(b) In all certificates
furnished under section 203 or sub-section (5) of section 206C;
4[R272] [(ba) In all the quarterly statements prepared
and delivered or caused to be delivered in accordance with the provisions of
sub-section (3) of section 200 or sub-section (3) of section 206C;]
(c) In all the returns,
delivered in accordance with the provisions of section 206 or sub-section (5A)
or sub-section (5B) of section 206C to any income-tax authority; and
(d) In all other documents
pertaining to such transactions as may be prescribed in the interests of
revenue.]
DEPARTMENTAL
VIEW
1. With effect from 1-6-1987 it is obligatory for all persons
responsible for deducting tax at source to apply for allotment of tax deduction
account number and after obtaining it quote the same in the challans,
TDS certificates, periodical returns, etc. [Circular No. 497, dated 9th
October, 1989]
1[R273] [203AA.
Furnishing of Statement of tax deducted, etc.:-
The prescribed income-tax
authority or the person authorised by such authority
referred to in sub-section (3) of section 200, shall, within the prescribed
time after the end of each financial year beginning on or after the 1st day of
April, 2[R274] [2008] prepare and deliver to every person from whose
income the tax has been deducted or in respect of whose income the tax has been
paid a statement in the prescribed form3[R275] specifying the amount of
tax deducted or paid and such other particulars as may be prescribed.]
204. Meaning of "person responsible for paying":-
For the purposes of 1[R276] [the foregoing provisions of this Chapter] and 2[R277] section 285, the expression "person responsible for
paying" means—
(i) in
the case of payments of income chargeable under the head "Salaries",
other than payments by the Central Government or the Government of a State, the
employer himself or, if the employer is a company, the company itself,
including the principal officer thereof;
(ii) in the case of
payments of income chargeable under the head "Interest on securities",
other than payments made by or on behalf of the Central Government or the
Government of a State, the local authority, corporation or company, including
the principal officer thereof;
3[R278] [(iia) in the case of any sum payable to a
non-resident Indian, being any sum representing consideration for the transfer
by him of any foreign exchange asset, which is not a short-term capital asset,
the authorised dealer responsible for remitting such
sum to the non-resident Indian or for crediting such sum to his Non-resident
(External) Account maintained in accordance with the Foreign Exchange
Regulation Act, 1973 (46 of 1973) and any rules made there under;]
(iii) 4[R279] [in the case of credit or, as the case may be, payment] or
any other sum chargeable under the provisions of this Act, the payer himself,
or, if the payer is a company, the company itself including the principal
officer thereof.
5[R280] [Explanation.—For
the purposes of this section,—
(a) "non-resident Indian" and "foreign exchange
asset" shall have the meanings assigned to them in Chapter XIIA;
(b) "authorised dealer" shall have the meaning assigned to
it in clause (b) of section 2 of the Foreign Exchange Regulation Act,
19736[R281] (46 of 1973).]
205. Bar against direct demand on assessee:-
Where tax is deductible at
the source under 1[R282] [the foregoing provisions of this Chapter], the assessee
shall not be called upon to pay the tax himself to the extent to which tax has
been deducted from that income.
1[R283] [206.
Persons deducting tax to furnish prescribed returns:-
2[R284] [(1)] 3[R285] The prescribed person in the case of every office of
Government, the principal officer in the case of every company, the prescribed
person in the case of every local authority or other public body or
association, every private employer and every other person responsible for
deducting tax 4[R286] [before the 1st day of April, 2005] under the foregoing
provisions of this Chapter 5[R287] [shall, within the prescribed time after the end of each
financial year, prepare and deliver or cause to be delivered] to the prescribed
income-tax authority 6[R288] [or such other authority or agency as may be prescribed],
such returns in such form and verified in such manner and setting forth such
particulars as may be prescribed:]
7[R289] [Provided that the Board may, if it considers
necessary or expedient so to do, frame a scheme8[R290] for the purposes of filing
such returns with such other authority or agency referred to in this
sub-section.]
9[R291] [(2) Without
prejudice to the provisions of sub-section (1), the person responsible for
deducting tax under the foregoing provisions of this Chapter 10[R292] [other than the prescribed person in the case of every
office of the Government and the principal officer in the case of every
company] may, at his option, deliver or cause to be delivered such return11[R293] to the prescribed
income-tax authority in accordance with such scheme12[R294] as may be specified by the
Board in this behalf, by notification in the Official Gazette, and subject to
such conditions as may be specified therein, on or before the prescribed time
after the end of each financial year, on a floppy diskette, magnetic cartridge
tape, CD-ROM or any other computer readable media (hereinafter referred to as
the computer media) and in the manner as may be specified in that scheme:
13[R295] [Provided that the prescribed person in the case of
every office of Government and the principal officer in the case of every
company responsible for deducting tax under the foregoing provisions of this
Chapter shall, deliver or cause to be delivered, within the prescribed time
after the end of each financial year, such returns on computer media under the
said scheme.]
(3)
Notwithstanding anything contained
in any other law for the time being in force, a return filed on computer media
shall be deemed to be a return for the purposes of this section and the rules
made there under and shall be admissible in any proceedings there under,
without further proof of production of the original, as evidence of any
contents of the original or of any fact stated therein.
(4)
Where the Assessing Officer
considers that the return delivered or caused to be delivered under sub-section
(2) is defective, he may intimate the defect to the person responsible for
deducting tax or the principal officer in the case of a company, as the case
may be, and give him an opportunity of rectifying the defect within a period of
fifteen days from the date of such intimation or within such further period
which on an application made in this behalf, the Assessing Officer may, in his
discretion, allow; and if the defect is not rectified within the said period of
fifteen days or, as the case may be, the further period so allowed, then,
notwithstanding anything contained in any other provision of this Act, such
return shall be treated as an invalid return and the provisions of this Act
shall apply as if such person had failed to deliver the return.]
DEPARTMENTAL
VIEW
1. With a view to ensure that the TDS returns filed on
computer media conform to the required specifications, the person responsible for
deduction or collection of tax at source and filing of TDS/TCS return on
computer media shall ensure the following:
(i) Form
No. 27A (in the cases of tax deduction at source) or Form No. 27B (in the case
of tax collection at source) is duly filled in, verified and enclosed in paper
format with the return on computer media.
(ii) Tax deduction and
collection account number (TAN) of the person responsible for
deducting/collecting tax at source is clearly mentioned in Form No. 27A or Form
No. 27B, as the case may be, as also in the TDS/TCS return, as required by
sub-section (2) of section 203A of the Income-tax Act.
(iii) The particulars
relating to deposit of tax at source in bank are correctly and properly filled
in the table at item no. 6 of Form No. 24 or item no. 4 of Form No. 26 or item
no. 4 of Form No. 27 or item no. 4 of Form No. 27E, as the case may be.
(iv) The data structure
of the return for tax deduction at source in Form No. 24 or Form No. 26 or Form
No. 27 and of tax collection at source in Form No. 27E prepared on computer
readable media conforms to the data structure prescribed by the e-filing
Administrator authorized under the scheme for electronic filing of TDS/TCS
returns notified by the Board.
(v) The Control Totals
of the amount paid and the tax deducted at source as mentioned at item No. 4 of
Form No. 27A tally with the corresponding totals in the return for tax
deduction at source in Form No. 24 or Form No. 26 or Form No. 27, as the case
may be.
(vi) The Control Totals of the amount paid and the tax collected at
source as mentioned at item No. 4 of Form No. 27B tally with the corresponding
totals in the return for tax collection at source in Form No. 27E.
In case the return on the
computer readable media is found to be corrupted or does not fulfill any of the
above guidelines, the computer readable media shall be returned to the deductor for appropriate correction and re-submission. [Circular No. 4/2005, dated 27-6-2005. Earlier, Circular No. 8/2003, dated 19-9-2003 was
issued on the subject].
2. The due date for filing of annual return of TDS for F.Y.
2004-2005 by Government offices under section 206(2), proviso was extended to
31st August, 2005. [Order F. No. 385/35/2005-IT(B), dated 28-6-2005]
3. The due date for filing of annual return of TDS for F.Y.
2004-2005 in respect of persons responsible for deducting tax who are situated
in Gujarat or are assessed/assessable in the TDS
jurisdiction of Gujarat extended to 31st August, 2005. Likewise, the due date
for filing of quarterly statements of TDS for the first quarter of F.Y. 2005-06
also extended to 31st August, 2005. [Order F. No. 385/35/2005-ITA-II, dated
8-7-2005]
4. Under sub-sections (2) and (3) of section 206, read with
rule 37B, a person responsible for deduction of tax at source may file his TDS
return on computer media in lieu of a paper return, subject to the conditions,
limitations, rules and guidelines prescribed for the preparation, execution,
filing and corrections thereof in this circular. [Circular No. 797, dated
10th October, 2000]
5. Where the head office or the branch office is already
filing the return under section 206, no other Assessing Officer shall require
the assessee to file such return with him. Where, however, the return is not
being filed, the Assessing Officer having jurisdiction in terms of rule 36A of
the Income-tax Rules may proceed so as to enforce compliance to the provisions
relating to deduction of tax at source from salary. [Circular
No. 719, dated 22-8-1995]. This procedure has been extended to all
other TDS returns filed under rule 37, as required under this section. [Circular
No. 744, dated 6-5-1996]
1[R296] [206A.
Furnishing of quarterly return in respect of payment of interest to residents
without deduction of tax:-
(1)
Any banking company or co-operative
society or public company referred to in the proviso to clause (i) of sub-section (3) of section 194A responsible
for paying to a resident any income 2[R297] [not exceeding ten thousand rupees, where the payer is a
banking company or a co-operative society, and five thousand rupees in any
other case] by way of interest (other than interest on securities), shall
prepare quarterly returns for the period ending on the 30th June, the 30th
September, the 31st December and the 31st March in each financial year and
deliver or cause to be delivered to the prescribed income-tax authority or the
person authorised by such authority the quarterly
returns as aforesaid, in the prescribed form3[298] , verified in such manner and within such time as may be prescribed,
on a floppy, diskette, magnetic cartridge tape, CD-ROM or any other computer
readable media.
(2)
The Central Government may, by
notification in the Official Gazette, require any person other than a person
mentioned in sub-section (1) responsible for paying to a resident any income
liable for deduction of tax at source under Chapter XVII, to prepare and
deliver or cause to be delivered quarterly returns in the prescribed form and
verified in such manner and within such time as may be prescribed, to the
prescribed income-tax authority or the person authorised
by such authority on a floppy, diskette, magnetic cartridge tape, CD-ROM or any
other computer readable media.]
DEPARTMENTAL
VIEW
1. The due date for filing of quarterly return under section 260A(1) for the quarters ending 30-6-2006 and 30-9-2005 was
extended successively to 30-9-2005, 31-12-2005 and 31-1-2006. [Order F. Nos.
385/35/2005-IT(B),
dated 25-8-2005; 19-9-2005 and 29-12-2005]
Omitted
by the Finance (No. 2) Act, 1996, w.e.f. 1-10-1996. It was inserted by the Finance (No. 2) Act, 1977, w.e.f. 1-10-1977 and amended by the Direct Tax Laws
(Amendment) Act, 1987, w.e.f. 1-4-1988.]
1[299] [BB.—Collection at source
206C. Profits and gains from the business of trading in
alcoholic liquor, forest produce, scrap, etc.2[300] :-
3[R301] [(1) Every
person, being a seller shall, at the time of debiting of the amount payable by
the buyer to the account of the buyer or at the time of receipt of such amount
from the said buyer in cash or by the issue of a cheque
or draft or by any other mode, whichever is earlier, collect from the buyer of
any goods of the nature specified in column (2) of the Table below, a sum equal
to the percentage specified in the corresponding entry in column (3) of the
said Table, of such amount as income-tax.
|
Sl. No. |
Nature of goods |
Percentage |
|
(1) |
(2) |
(3) |
|
(i) |
Alcoholic liquor for human consumption |
One per cent |
|
(ii) |
Tendu leaves |
Five per cent |
|
(iii) |
Timber obtained under a forest lease |
Two and one-half per cent |
|
(iv) |
Timber obtained by any mode other than under a forest lease |
Two and one-half per cent |
|
(v) |
Any other forest produce not being timber or tendu leaves |
Two and one half per cent |
|
(vi) |
Scrap |
One per cent:] |
5[R303] [Provided that every person, being a seller shall at
the time, during the period beginning on the 1st day of June, 2003 and ending
on the day immediately preceding the date on which the Taxation Laws
(Amendment) Act, 2003 comes into force,6[R304] of debiting of the amount
payable by the buyer to the account of the buyer or of receipt of such amount
from the said buyer in cash or by the issue of a cheque
or draft or by any other mode, whichever is earlier, collect from the buyer of
any goods of the nature specified in column (2) of the Table as it stood
immediately before the 1st day of June, 2003, a sum equal to the percentage,
specified in the corresponding entry in column (3) of the said Table, of such
amount as income-tax in accordance with the provisions of this section as they
stood immediately before the 1st day of June, 2003.]
7[R305] [(1A) Notwithstanding anything contained in sub-section
(1), no collection of tax shall be made in the case of a buyer, who is resident
in India, if such buyer furnishes to the person responsible for collecting tax,
a declaration in writing in duplicate in the prescribed form8[R306] and verified in the
prescribed manner to the effect that the goods referred to in column (2) of the
aforesaid Table are to be utilized for the purposes of manufacturing,
processing or producing articles or things and not for trading purposes.
(1B) The person responsible for collecting tax
under this section shall deliver or cause to be delivered to the Chief
Commissioner or Commissioner one copy of the declaration referred to in
sub-section (1A) on or before the seventh day of the month next following the
month in which the declaration is furnished to him.]
9[R307] [(1C) Every
person, who grants a lease or a licence or enters
into a contract or otherwise transfers any right or interest either in whole or
in part in any parking lot or toll plaza or mine or quarry, to another person,
other than a public sector company (hereafter in this section referred to as
"licensee or lessee") for the use of such parking lot or toll plaza
or mine or quarry for the purpose of business shall, at the time of debiting of
the amount payable by the licensee or lessee to the account of the licensee or
lessee or at the time of receipt of such amount from the licensee or lessee in
cash or by the issue of a cheque or draft or by any
other mode, whichever is earlier, collect from the licensee or lessee of any
such licence, contract or lease of the nature
specified in column (2) of the Table below, a sum equal to the percentage,
specified in the corresponding entry in column (3) of the said Table, of such
amount as income-tax:
Table
|
Sl. No. |
Nature of contract or license or lease, etc. |
Percentage |
|
(1) |
(2) |
(3) |
|
(i) |
Parking lot |
Two per cent. |
|
(ii) |
Toll plaza |
Two per cent. |
|
(iii) |
Mining and quarrying |
Two per cent. |
10[R308] [Explanation 1.—For the purposes of this
sub-section, "mining and quarrying" shall not include mining and
quarrying of mineral oil.
Explanation 2.—For the purposes of Explanation 1, "mineral
oil" includes petroleum and natural gas.]
(2) The power to recover tax by a collection
under sub-section (1) 11[R309] [or sub-section (1C)] shall be without prejudice to any
other mode of recovery.
(3) Any person collecting any amount under
sub-section (1) 12[R310] [or sub-section (1C)] shall pay within 13[R311] [the prescribed time] the amount so collected to the credit
of the Central Government or as the Board directs:
14[R312] [Provided that the person collecting tax on or after
the 1st day of April, 2005 in accordance with the foregoing provisions of this
section shall, after paying the tax collected to the credit of the Central
Government within the prescribed time, prepare quarterly statements for the
period ending on the 30th June, the 30th September, the 31st December and the
31st March in each financial year and deliver or cause to be delivered to the
prescribed income-tax authority, or the person authorised
by such authority, such statement in such form and verified in such manner and
setting forth such particulars and within such time as may be prescribed15[R313] .]
16[R314] [(4) Any amount
collected in accordance with the provisions of this section and paid to the
credit of the Central Government shall be deemed to be a payment of tax on behalf
of the person from whom the amount has been collected and credit shall be given
to such person for the amount so collected in a particular assessment year in
accordance with the rules as may be prescribed by the Board from time to time.]
(5) Every person collecting tax in
accordance with the provisions of this section shall within 17[R315] [such period as may be prescribed from the time of debit]
or receipt of the amount furnish to the buyer 18[R316] [or licensee or lessee] to whose account such amount is
debited or from whom such payment is received, a certificate to the effect that
tax has been collected, and specifying the sum so collected, the rate at which
the tax has been collected and such other particulars as may be prescribed:19 [R317]
20[R318] [Provided that no certificate may be furnished in a
case where tax has been collected in accordance with the foregoing provisions
of this section on or after the 1st day of April, 21[R319] [2010]:
Provided further that the
prescribed income-tax authority or the person authorised
by such authority referred to in sub-section (3) shall, within the prescribed
time after the end of each financial year 22[R320] [beginning on or after the 1st day of April, 2008], prepare
and deliver to the buyer referred to in sub-section (1) or, as the case may be,
to the licensee or lessee referred to in sub-section (1C), a statement in the
prescribed form23[R321] specifying the amount of
tax collected and such other particulars as may be prescribed.]
24[R322] [(5A) Every person collecting tax 25[R323] [before the 1st day of April, 2005] in accordance with the
provisions of this section shall 26[R324] [prepare within the prescribed time after the end of each
financial year], and deliver or cause to be delivered to the prescribed
income-tax authority27[R325] 28[R326] [or such other authority or agency as may be prescribed]
such returns in such form and verified in such manner and setting forth such
particulars and within such time as may be prescribed:29[R327] ]
30[R328] [Provided that the Board may, if it considers
necessary or expedient so to do, frame a scheme31[R329] for the purposes of filing
such returns with such other authority or agency referred to in this sub-se
32[R330] [(5B) Without prejudice to the provisions of sub-section
(5A), any person collecting tax other than in a case where the seller is a
company, the Central Government or a State Government, may at his option,
deliver or cause to be delivered such return to the prescribed income-tax
authority in accordance with such scheme as may be specified by the Board33[R331] in this behalf, by
notification in the Official Gazette, and subject to such conditions as may be
specified therein, on or before the prescribed time after the end of each
financial year, on a floppy, diskette, magnetic cartridge tape, CD-ROM or any
other computer readable media (hereinafter referred to as the computer media)
and in the manner as may be specified in that scheme:
Provided that where that person collecting tax is a company or the
Central Government or a State Government, such person shall, in accordance with
the provisions of this section, deliver or cause to be delivered, within the
prescribed time after the end of each financial year, such returns on computer
media under the said scheme.
(5C)
Notwithstanding anything contained in
any other law for the time being in force, a return filed on computer media
shall be deemed to be return for the purposes of sub-section (5A) and the rules
made there under and shall be admissible in any proceedings made there under,
without further proof of production of the original, as evidence of any
contents of the original or of any facts stated therein.
(5D)
Where the Assessing Officer considers
that the return delivered or caused to be delivered under sub-section (5B) is
defective, he may intimate the defect to the person collecting tax give him an
opportunity of rectifying the defect within a period of fifteen days from the
date of such intimation or within such further period which, on an application
made in this behalf, the Assessing Officer may, in his discretion, allow; and
if the defect is not rectified within the said period of fifteen days or, as
the case may be, the further period so allowed, then notwithstanding anything
contained in any other provision of this Act, such return shall be treated as
an invalid return and the provisions of this Act shall apply as if such person
had failed to deliver the return.]
(6)
Any person responsible for
collecting the tax who fails to collect the tax in accordance with the
provisions of this section, shall, notwithstanding such failure, be liable to
pay the tax to the credit of the Central Government in accordance with the
provisions of sub-section (3).
34[R332] [(6A) If any person responsible for collecting tax in
accordance with the provisions of this section does not collect the whole or
any part of the tax or after collecting, fails to pay the tax as required by or
under this Act, he shall, without prejudice to any other consequences which he
may incur, be deemed to be an assessee in default in respect o
Provided that no penalty shall be charged under section 221 from
such person unless the Assessing Officer is satisfied that the person has
without good and sufficient reasons failed to collect and pay the tax.]
(7) Without prejudice to the provisions of
sub-section (6), if the 35[R333] [person responsible for collecting tax] does not collect
the tax or after collecting the tax fails to pay it as required under this
section, he shall be liable to pay simple interest at the rate of 36[R334] [one per cent] per month or part thereof on the amount of
such tax from the date on which such tax was collectible to the date on which
the tax was actually paid 37[R335] [and such interest shall be paid before furnishing the
quarterly statement for each quarter in accordance with the provisions of
sub-section (3)].
(8) Where the tax has not been paid as
aforesaid, after it is collected, the amount of the tax together with the
amount of simple interest thereon referred to in sub-section (7) shall be a
charge upon all the assets of the 38[R336] [person responsible for collecting tax].]
39[R337] [(9) Where the Assessing Officer is satisfied that the
total income of the buyer 40[R338] [or licensee or lessee] justifies the collection of the tax
at any lower rate than the relevant rate specified in sub-section (1) 41[R339] [or sub-section (1C)], the Assessing Officer shall, on an
application42[R340] made by the buyer 43[R341] [or licensee or lessee] in this behalf, give to him a
certificate44[R342] for collection of tax at
such lower rate than the relevant rate specified in sub-section (1) 45[R343] [or sub-section (1C)].
(10) Where a certificate under sub-section (9)
is given, the person responsible for collecting the tax shall, until such
certificate is cancelled by the Assessing Officer, collect the tax at the rates
specified in such certificate.
(11) The Board may, having regard to the
convenience of assessees and the interests of revenue, by notification in the
Official Gazette, make rules specifying the cases in which, and the
circumstances under which, an application may be made for the grant of a
certificate under sub-section (9) and the conditions subject to which such
certificate may be granted and providing for all other matters connected
therewith.]
46[R344] [Explanation. — For the purposes of
this section,—
(a) "buyer"
means a person who obtains in any sale, by way of auction, tender or any other
mode, goods of the nature specified in the Table in sub-section (1) or the
right to receive any such goods but does not include,—
47[R345] [(i) A public sector
company, the Central Government, a State Government, and an embassy, a high
commission, legation, commission, consulate and the trade representation, of a
foreign State and a club; or
(ii) A buyer in the
retail sale of such goods purchased by him for personal consumption;]
48[R346] [(b) "scrap" means waste and scrap from
the manufacture or mechanical working of materials which is definitely not
usable as such because of breakage, cutting up, wear and other reasons;
(c) "seller"
means the Central Government, a State Government or any local authority or
corporation or authority established by or under a Central, State or Provincial
Act, or any company or firm or co-operative society and also includes an
individual or a Hindu undivided family whose total sales, gross receipts or
turnover from the business or profession carried on by him exceed the monetary
limits specified under clause (a) or clause (b) of section 44AB
during the financial year immediately preceding the financial year in which the
goods of the nature specified in the Table in sub-section (1) are sold.]
DEPARTMENTAL
VIEW
1. With a view to ensure that the TCS returns filed on
computer media conform to the required specifications, the person responsible
for collection of tax at source and filing of TCS return on computer media
shall ensure the conditions laid down in Circular No. 4/2005, dated 27-6-2005,
extracted under section 206, ante.
2. The due date for filing of annual return of TCS for F.Y.
2004-05, in respect of persons responsible for collecting tax who are situated
in the State of Gujarat or are assessed/assessable in the
TCS jurisdiction of Gujarat extended to 31st August, 2005. Likewise, the due
date for filing of quarterly statements of TCS for the first quarter of F.Y.
2005-06 also extended to 31st August, 2005. [Order F. No.
385/35/2005-ITA-II, dated 8-7-2005]
3. The term 'buyer' in section 206C does not include
(i) A public
sector company;
(ii)
A buyer in the further sale of such goods
obtained in pursuance of such sale, or
(iii)
A buyer where the goods are not obtained by him by way of auction and where the
sale price of such goods to be sold by the buyer is fixed by or under any State
Act. The term 'seller' means the Central Government, a State Government or any
local authority or corporation or authority established by or under a Central,
State or Provincial Act or any company or firm or co-operative society. [Circular
No. 660, dated 15th September, 1993] The terms 'buyer' and 'seller' have
also been defined in the Explanation to the section.
4. Income-tax will have to be collected at source under this
section by all persons referred to in section 44AC at the specified rates with
reference to the purchase price including excise duty. [Circular No. 585,
dated 27th November, 1990]
5. A new rule 37E prescribing the half-yearly returns
regarding tax collected at source under section 206C(5A) and another rule 37F
prescribing the income-tax authorities to whom these half-yearly returns are to
be furnished have been inserted vide Notification, dated 19th February,
1990. These half-yearly returns are to be filed within one month from the end
of the period to which the returns relate. [Circular No. 565, dated
11th July, 1990]
1[R347] [206CA. Tax-collection
account number:-
(1) Every person collecting tax in
accordance with the provisions of section 206C, shall, within such time as may
be prescribed,2[R348] apply to the Assessing
Officer for the allotment of a tax-collection account number.
(2) Where a tax collection account number
has been allotted to a person, such person shall quote such number—
(a) In all challans for the payment of any sum in accordance with the
provisions of sub-section (3) of section 206C;
(b) In all certificates
furnished under sub-section (5) of section 206C;
(c) In all the returns
delivered in accordance with the provisions of sub-section (5A) or sub-section
(5B) of section 206C to any income-tax authority; and
(d) in
all other documents pertaining to such transactions as may be prescribed in the
interest of revenue:]
3[R349] [Provided that the provisions of this section shall
not apply on or after the 1st day of October, 2004.]
C.—Advance payment of tax
1[R350] [207.
Liability for payment of advance tax:-
Tax shall be payable in
advance during any financial year, in accordance with the provisions of
sections 208 to 219 (both inclusive), in respect of the total income of the
assessee which would be chargeable to tax for the assessment year immediately
following that financial year, such income being hereafter in this Chapter
referred to as "current income".]
1[R351] [208.
Conditions of liability to pay advance tax:-
Advance tax shall be
payable during a financial year in every case where the amount of such tax
payable by the assessee during that year, as computed in accordance with the
provisions of this Chapter, is 2[R352] [five thousand] rupees or more.]
209. Computation of advance tax:-
1[R353] [(1) The amount
of advance tax payable by an assessee in the financial year shall, subject to
the provisions of sub-sections (2) and (3), be computed as follows, namely:—
(a)
where the calculation is made by the assessee for the purposes of payment of
advance tax under sub-section (1) or sub-section (2) or sub-section (5) or
sub-section (6) of section 210, he shall first estimate his current income and
income-tax thereon shall be calculated at the rates in force in the financial
year;
(b)
where the calculation is made by the Assessing Officer for the purpose of
making an order under sub-section (3) of section 210, the total income of the
latest previous year in respect of which the assessee has been assessed by way
of regular assessment or the total income returned by the assessee in any
return of income furnished by him for any subsequent previous year, whichever
is higher, shall be taken and income-tax thereon shall be calculated at the
rates in force in the financial year;
(c)
where the calculation is made by the Assessing Officer for the purpose of
making an amended order under sub-section (4) of section 210, the total income
declared in the return furnished by the assessee for the later previous year,
or, as the case may be, the total income in respect of which the regular
assessment, referred to in that sub-section has been made, shall be taken and
income-tax thereon shall be calculated at the rates in force in the financial
year;
(d)
the income-tax calculated under clause (a) or clause (b) or
clause (c) shall, in each case, be reduced by the amount of income-tax
which would be deductible 2[R354] [or collectible] at source during the said financial year
under any provision of this Act from any income (as computed before allowing
any deductions admissible under this Act) which has been taken into account in
computing the current income or, as the case may be, the total income
aforesaid; and the amount of income-tax as so reduced shall be the advance tax
payable.]
3[R355] [(2) Where the
Finance Act of the relevant year provides that, in the case of any class of
assessees, net agricultural income (as defined in that Act) shall be taken into
account for the purposes of computing advance tax, then, the net agricultural
income to be taken into account in the case of any assessee falling in that
class, shall be—
(a) In cases 4[R356] [where the Assessing Officer makes an order under
sub-section (3) or sub-section (4) of section 210],—
(i) if the
total income of the latest previous year in respect of which the assessee has
been assessed by way of regular assessment forms the basis of computation of
advance tax payable by him, the net agricultural income which has been taken
into account for the purposes of charging income-tax for the assessment year
relevant to that previous year; or
5[R357] [(ii) if the total income declared by the assessee
for the later previous year referred to in sub-section (4) of section 210 forms
the basis of computation of advance tax, the net agricultural income as
returned by the assessee in the return of income for the assessment year
relevant to such later previous year;]
6[R358] [(b) in cases where the advance tax is paid by the
assessee on the basis of his estimate of his current income under sub-section
(1) or sub-section (2) or sub-section (5) or sub-section (6) of section 210,
the net agricultural income, as estimated by him, of the period which would be
the previous year for the immediately following assessment year.]
(3) Where the Finance Act of the relevant
year specifies any separate rate or rates for the purposes of computing advance
tax in the case of every Hindu undivided family which has at least one member
whose total income of the previous year exceeds the maximum amount not
chargeable to income-tax in his case, then, the 7[R359] [Assessing] Officer shall, for making an order under 8[R360] [sub-section (3) or sub-section (4) of] section 210 in the
case of any such Hindu undivided family, compute (subject to the provisions of
section 164) the advance tax at such rate or rates—
(a)
in a case where the total income of the latest previous year in respect of
which the Hindu undivided family has been assessed by way of regular assessment
forms the basis of computation of advance tax, if the total income of any
member of the family for the assessment year relevant to such latest previous
year exceeds the maximum amount not chargeable to income-tax in his case;
(b)
in a case where the total income of the previous year 9[R361] [in respect of which a return of income is furnished by the
Hindu undivided family under section 139 or in response to a notice under
sub-section (1) of section 142] forms the basis of computation of advance tax,
if the total income of any member of the family for the assessment year
relevant to such previous year exceeds the maximum amount not chargeable to
income-tax in his case.]
209A. Computation and payment of advance tax by assessee:-
Omitted
by the Direct Tax Laws (Amendment) Act, 1987, w.e.f.
1-4-1988. It was inserted by the
Finance Act, 1978, w.e.f. 1-6-1978 and amended by the
Finance Act, 1979, w.e.f. 1-4-1979 and the Finance
(No. 2) Act, 1980, w.e.f. 1-9-1980.]
1[R362] [210.
Payment of advance tax by the assessee of his own accord or in pursuance of
order of Assessing Officer:-
(1)
Every person who is liable to pay
advance tax under section 208 (whether or not he has been previously assessed
by way of regular assessment) shall, of his own accord, pay, on or before each
of the due dates specified in section 211, the appropriate percentage,
specified in that section, of the advance tax on his current income, calculated
in the manner laid down in section 209.
(2) A person
who pays any installment or installments of advance tax under sub-section (1), may increase or reduce the amount of advance tax payable
in the remaining instalment or instalments
to accord with his estimate of his current income and the advance tax payable
thereon, and make payment of the said amount in the remaining instalment or instalments
accordingly.
(3)
In the case of a person who has
been already assessed by way of regular assessment in respect of the total
income of any previous year 2[R363] [* * *], the Assessing Officer, if he is of opinion that
such person is liable to pay advance tax, may, at any time during the financial
year but not later than the last day of February, by order in writing, require
such person to pay advance tax calculated in the manner laid down in section
209, and issue to such person a notice of demand under section 156 specifying
the instalment or instalments
in which such tax is to be paid.
(4)
If, after the making of an order by
the Assessing Officer under sub-section (3) and at any time before the 1st day
of March, a return of income is furnished by the assessee under section 139 or
in response to a notice under sub-section (1) of section 142, or a regular
assessment of the assessee is made in respect of a previous year later than
that referred to in sub-section (3), the Assessing Officer may make an amended
order and issue to such assessee a notice of demand under section 156 requiring
the assessee to pay, on or before the due date or each of the due dates
specified in section 211 falling after the date of the amended order, the
appropriate percentage, specified in section 211, of the advance tax computed
on the basis of the total income declared in such return or in respect of which
the regular assessment aforesaid has been made.
(5)
A person who is served with an
order of the Assessing Officer under sub-section (3) or an amended order under
sub-section (4) may, if in his estimation the advance tax payable on his
current income would be less than the amount of the advance tax specified in
such order or amended order, send an intimation in the prescribed form3[R364] to the Assessing Officer to
that effect and pay such advance tax as accords with his estimate, calculated
in the manner laid down in section 209, at the appropriate percentage thereof
specified in section 211, on or before the due date or each of the due dates
specified in section 211 falling after the date of such intimation.
(6)
A person who is served with an
order of the Assessing Officer under sub-section (3) or amended order under
sub-section (4) shall, if in his estimation the advance tax payable on his
current income would exceed the amount of advance tax specified in such order
or amended order or intimated by him under sub-section (5), pay on or before
the due date of the last instalment specified in
section 211, the appropriate part or, as the case may be, the whole of such
higher amount of advance tax as accords with his estimate, calculated in the
manner laid down in section 209.]
1[R365] [211. Instalments of advance tax and due dates:-
2[R366] [(1) Advance
tax on the current income calculated in the manner laid down in section 209
shall be payable by—
(a) all the companies, who are liable to pay the
same, in four instalments during each financial year
and the due date of each instalment and the amount of
such instalment shall be as specified in Table I
below:
Table
I
---------------------------------------------------------------------------------------------------------------
Due date of instalment Amount payable
-----------------------------------------------------------------------
On or before the 15th June Not
less than fifteen per cent of such advance tax.
On
or before the 15th September Not less than forty-five per cent of such advance tax, as
reduced by the amount, if any, paid in the earlier instalment.
On
or before the 15th December Not
less than seventy-five per cent of such advance tax, as reduced by the amount
or amounts, if any, paid in the earlier instalment or
instalments.
On
or before the 15th March The whole amount of such advance tax as reduced by the
amount or amounts, if any, paid in the earlier instalment
or instalments.
----------------------------------------------------------------------------------------------------------------
(b)
all the assesses (other than companies), who are liable to pay the same, in
three instalments during each financial year and the
due date of each instalment and the amount of such instalment shall be as specified in Table II below:
Table
II
---------------------------------------------------------------------------------------------------------------
Due date of instalment Amount payable-----------------------------------------------------------------------
On or before the 15th
September not less
than thirty per cent of such advance tax.
On
or before the 15th December not
less than sixty per cent of such advance tax, as reduced by the amount, if any,
paid in the earlier instalment.
On
or before the 15th March the
whole amount of such advance tax as reduced by the amount or amounts, if any,
paid in the earlier
Instalment or instalments:
------------------------------------------------------------------------------------------------------------
Provided that any amount paid by way of advance tax on or before
the 31st day of March shall also be treated as advance tax paid during the
financial year ending on that day for all the purposes of this Act.]
(2) If the notice of demand issued under
section 156 in pursuance of an order of the Assessing Officer under sub-section
(3) or sub-section (4) of section 210 is served after any of the due dates
specified in sub-section (1), the appropriate part or, as the case may be, the
whole of the amount of the advance tax specified in such notice shall be
payable on or before each of such of those dates as fall after the date of
service of the notice of demand.]
DEPARTMENTAL
VIEW
1. If the last day for payment of any instalments
of advance tax is a day on which receiving bank is closed, the assessee can
make the payment on the next immediately following working day, and in such
cases, the mandatory interest livable under sections 234B and 234C would not be
charged. [Circular No. 676, dated 14th January, 1994]
Omitted
by the Direct Tax Laws (Amendment) Act, 1987, w.e.f.
1-4-1988. It was amended by the Finance
Act, 1969, w.e.f. 1-4-1969; Finance Act, 1970, w.e.f. 1-4-1970; Finance Act, 1972, w.e.f.
1-4-1972; Finance Act, 1978, w.e.f. 1-6-1978; Finance
Act, 1979, w.e.f. 1-4-1979 and Finance (No. 2) Act,
1980, w.e.f. 1-9-1980.]
Omitted
by the Direct Tax Laws (Amendment) Act, 1987, w.e.f.
1-4-1988. It was amended by the Finance
Act, 1965, w.e.f. 1-4-1965; Taxation Laws (Amendment)
Act, 1967, w.e.f. 1-10-1967; Finance Act, 1969, w.e.f. 1-4-1969; Finance Act, 1972, w.e.f.
1-4-1972 and the Taxation Laws (Amendment) Act, 1984, w.e.f.
1-10-1984.]
1[R367] 214. Interest
payable by Government2[R368] :-
3[R369] (1) The
Central Government shall pay simple interest at 4[R370] [fifteen] per cent per annum on the amount by which the
aggregate sum of any instalments of advance tax paid
during any financial year in which they are payable under sections 207 to 213
exceeds the amount of the 5[R371] [assessed tax] from the 1st day of April, next following
the said financial year to the date of the regular assessment for the
assessment year immediately following the said financial year, and where any such
instalment is paid after the expiry of the financial
year during which it is payable by reason of the provisions of section 213,
interest as aforesaid shall also be payable on that instalment
from the date of its payment to the date of regular assessment:
6[R372] [Provided that in respect of any amount refunded on
a provisional assessment under section 141A, no interest shall be paid for any
period after the date of such provisional assessment.]
7[R373] [(1A) Where as a
result of an order under section 147 or section 154 or section 155 or section
250 or section 254 or section 260 or section 262 or section 263 or section 264 8[R374] [or an order of the Settlement Commission under sub-section
(4) of section 245D], the amount on which interest was payable under sub-section
(1) has been increased or reduced, as the case may be, the interest shall be
increased or reduced accordingly, and in a case where the interest is reduced,
the 9[R375] [Assessing] Officer shall serve on the assessee, a notice
of demand in the prescribed form specifying the amount of the excess interest
payable and requiring him to pay such amount; and such notice of demand shall
be deemed to be a notice under section 156 and the provisions of this Act shall
apply accordingly.]
(2)
On any portion of such amount which
is refunded under this Chapter, interest shall be payable only up to the date
on which the refund was made.
10[R376] [(3) This section
and sections 215, 216 and 217 shall not apply in respect of any assessment for
the assessment year commencing on the 1st day of April, 1989, or any subsequent
assessment year and, in the application of the said sections to the assessment
for any earlier assess-ment year, references therein
[except in sub-section (1A) and sub-section (3) of section 215] to the other
provisions of this Act shall be construed as references to those provisions as
for the time being in force and applicable to the relevant assessment year.]
11[R377] [Explanation 1.—In
this section, "assessed tax" shall have the same meaning as in
sub-section (5) of section 215.
Explanation 2.—Where, in relation
to an assessment year, an assess-ment is made for the
first time under section 147, the assessment so made shall be regarded as a
regular assessment for the purposes of this section.]
DEPARTMENTAL
VIEW
1. Where an assessee after filing a nil estimate pays the
advance tax as demanded by the Department and if it is found on regular
assessment that the amounts so paid exceed the tax demanded on regular
assessment no interest will be allowable on such excess amount as what had been
paid was not advance tax. [Letter No. 400/59/75, dated 10th October, 1975]
2. Interest is to be calculated only on the difference between
the advance tax and the tax actually determined and payable by the assessee on
assessment under section 143 or section 144. Advance tax is itself calculated
after giving credit to the tax deducted at source. [Law Ministry's opinion vide
para 2.368 of PAC's 51st Report]
1[R378] 215.
Interest payable by assessee2[R379] :-
3[R380] [(1) 4[R381] Where, in any financial year, an assessee has paid 5[R382] [advance tax under section 209A or section 212 on the basis
of his own estimate (including revised estimate)], and the advance tax so paid
is less than seventy-five per cent of the assessed tax, simple interest at the
rate of 6[R383] [fifteen] per cent per annum from the 1st day of April next
following the said financial year up to the date of the regular assessment
shall be payable by the assessee upon the amount by which the advance tax so
paid falls short of the assessed tax:]
7[R384] [Provided that in the case of an assessee, being a
company, the provisions of this sub-section shall have effect as if for the
words "seventy-five per cent", the words "eighty-three and
one-third per cent" had been substituted.]
8[R385] [(2) Where
before the date of completion of a regular assessment, tax is paid by the
assessee under section 140A or otherwise,—
(i) Interest shall be calculated in accordance with
the foregoing provision up to the date on which the tax is so paid; and
(ii)
Thereafter, interest shall be calculated at the rate aforesaid on the amount by
which the tax as so paid (in so far as it relates to income subject to advance
tax) falls short of the assessed tax.]
9[R386] [(3) Where as a
result of an order under section 147 or section 154 or section 155 or section
250 or section 254 or section 260 or section 262 or section 263 or section 264 10[R387] [or an order of the Settlement Commission under sub-section
(4) of section 245D], the amount on which interest was payable under
sub-section (1) has been increased or reduced, as the case may be, the interest
shall be increased or reduced accordingly, and—
(i) In a case where the interest is increased, the 11[R388] [Assessing] Officer shall serve on the assessee, a notice
of demand in the prescribed form specifying the sum payable, and such notice of
demand shall be deemed to be a notice under section 156 and the provisions of
this Act shall apply accordingly;
(ii)
In a case where the interest is reduced, the excess interest paid, if any,
shall be refunded.]
12[R389] (4) In such cases and under such circumstances as may be
prescribed, the 13[R390] [Assessing] Officer may reduce or waive the interest
payable by the assessee under this section.
14[R391] [(5) In this section and sections 217 and 273,
"assessed tax", means the tax determined on the basis of the regular
assessment (reduced by the amount of tax deductible in accordance with the
provisions of sections 192 to 194, section 194A 15[R392] [, section 194C] 16[R393] [, section 194D] 17[R394] [, section 195 and section 196A)] so far as such tax
relates to income subject to advance tax and so far as it is not due to
variations in the rates of tax made by the Finance Act enacted for the year for
which the regular assessment is made.]
18[R395] [(6) Where, in
relation to an assessment year, an assessment is made for the first time under
section 147, the assessment so made shall be regarded as a regular assessment
for the purposes of this section and sections 216, 217 and 273.]
DEPARTMENTAL
VIEW
1. Under rule 40(1) of the Income-tax Rules, first a decision
has to be arrived at as to what extent the delay in the completion of the
assessment beyond the first year is attributable to the assessee. After
deciding this waiver should be given from the end of the first year to the
period if any from where the delay is attributable to the assessee. Waiver
should extend up to the date of completion of the assessment. [Circular No.
492, dated 21st July, 1987]
1[R396] 216.
Interest payable by assessee in case of under-estimate, etc.2[R397] :-
Where, on making the
regular assessment, the 3[R398] [Assessing] Officer
finds that any assessee has—
4[R399] [(a) Under 5[R400] [section 209A or section 212] under-estimated the advance
tax payable by him and thereby reduced the amount payable in either of the
first two instalments; or]
(b) Under section 213
wrongly deferred the payment of advance tax on a part of his income;
He may direct that the assessee shall pay simple interest at 6[R401] [fifteen] per cent per annum—
(i) In
the case referred to in clause (a), for the period during which the
payment was deficient, on the difference between the amount paid in each such instalment and the amount which should have been paid,
having regard to the aggregate advance tax actually paid during the year; and
(ii) In the case
referred to in clause (b), for the period during which the payment of
advance tax was so deferred.
Explanation.—For the purposes of
this section, any instalment due before the expiry of
six months from the commencement of the previous year in respect of which it is
to be paid shall be deemed to have become due fifteen days after the expiry of
the said six months.
DEPARTMENTAL
VIEW
1. The order under section 216 being appealable,
it should be a speaking order. The Assessing Officer should go into the mens rea of the
assessee. Reasons supporting his conclusions should be recorded. [Letter No.
400/58, dated 29th February, 1980]
1[R402] 217.
Interest payable by assessee when no estimate made2[R403] :-
3[R404] [(1) Where, on
making the regular assessment, 4[R405] [the 5[R406] [Assessing] Officer finds—
(a) that any such person
as is referred to in clause (a) of sub-section (1) of section 209A has
not sent the statement referred to in that clause or the estimate in lieu of
such statement referred to in sub-section (2) of that section; or
(b) that
any such person as is referred to in clause (b) of sub-section (1) of
section 209A has not sent the estimate referred to in that clause,]
simple interest at the rate
of 6[R407] [fifteen] per cent per annum from the 1st day of April next
following the financial year in which the advance tax was payable in accordance
with the said 7[R408] [sub-section (1) or sub-section (2)] up to the date of the
regular assessment shall be payable by the assessee upon the amount equal to
the assessed tax as defined in sub-section (5) of section 215.]
8[R409] [(1A) Where, on making the regular assessment, the 9[R410] [Assessing] Officer finds that 10[R411] [any person who is required to send an estimate under
sub-section (4) of section 209A or] any such person as is referred to in
sub-section (3A) of section 212 has not sent the estimate referred to therein,
simple interest at the rate of 11[R412] [fifteen] per cent per annum from the 1st day of April next
following the financial year in which the advance tax was payable in accordance
with the said 12[[R413] sub-section (4) or, as the case may be, sub-section (3A)]
up to the date of the regular assessment shall be payable by the assessee upon
the amount by which the advance tax paid by him falls short of the assessed tax
as defined in sub-section (5) of section 215.]
(2)
The provisions of sub-sections (2),
(3) and (4) of section 215 shall apply to interest payable under this section
as they apply to interest payable under that section.
1[R414] [218. When
assessee deemed to be in default:-
If any assessee does not
pay on the date specified in sub-section (1) of section 211, any instalment of advance tax that he is required to pay by an
order of the Assessing Officer under sub-section (3) or sub-section (4) of
section 210 and does not, on or before the date on which any such instalment as is not paid becomes due, send to the
Assessing Officer an intimation under sub-section (5) of section 210 or does
not pay on the basis of his estimate of his current income the advance tax
payable by him under sub-section (6) of section 210, he shall be deemed to be
an assessee in default in respect of such instalment
or instalments.]
Any sum, other than a
penalty or interest, paid by or recovered from an assessee as advance tax in
pursuance of this Chapter shall be treated as a payment of tax in respect of
the income of the period which would be the previous year for an assessment for
the assessment year next following the financial year in which it was payable,
and credit there for shall be given to the assessee in the regular assessment.
[Omitted
by the Direct Tax Laws (Amendment) Act, 1987, w.e.f.
1-4-1989. It was inserted by the
Finance Act, 1968, w.e.f. 1-4-1968.]
D.—Collection and recovery
220. When tax payable and when assessee deemed in default1[R415] :-
(1) Any amount, otherwise than by way of
advance tax, specified as payable in a notice of demand under section 156 shall
be paid within 2[R416] [thirty] days of the service of the notice at the place and
to the person mentioned in the notice:
Provided that, where the 3[R417] [Assessing] Officer has any reason to believe that it will
be detrimental to revenue if the full period of 4[R418] [thirty] days aforesaid is allowed, he may, with the
previous approval of the 5[[R419] Joint] Commissioner, direct that the sum specified in the
notice of demand shall be paid within such period being a period less than the
period of 6[R420] [thirty] days aforesaid, as may be specified by him in the
notice of demand.
7[R421] (2) If the
amount specified in any notice of demand under section 156 is not paid within
the period limited under sub-section (1), the assessee shall be liable to pay
simple interest at 8[R422] [9[R423] [one per cent] for every month or part of a month comprised
in the period commencing from the day immediately following the end of the
period mentioned in sub-section (1) and ending with the day on which the amount
is paid:]
10[R424] [Provided that, where as a result of an order under
section 154, or section 155, or section 250, or section 254, or section 260, or
section 262, or section 264 11[R425] [or an order of the Settlement Commission under sub-section
(4) of section 245D], the amount on which interest was payable under this
section had been reduced, the interest shall be reduced accordingly and the
excess interest paid, if any, shall be refunded:]
12[R426] [Provided further that in respect of any period
commencing on or before the 31st day of March, 1989, and ending after that
date, such interest shall, in respect of so much of such period as falls after
that date, be calculated at the rate of one and one-half per cent for every month
or part of a month.]
13[R427] [(2A) notwithstanding anything contained in sub-section
(2), 14[R428] [the 15[R429] [Chief Commissioner or Commissioner] may] reduce or waive
the amount of interest 16[R430] [paid or] payable by an assessee under the said sub-section
if 17[R431] [he is satisfied] that—
(i) Payment of such
amount 18[R432] [has caused or] would cause genuine hardship to the
assessee;
(ii)
Default in the payment of the amount on
which interest 19[R433] [has been paid or] was payable under the said sub-section
was due to circumstances beyond the control of the assessee; and
(iii)
The assessee has co-operated in any inquiry relating to the assessment or any
proceeding for the recovery of any amount due from him.]
(3) Without prejudice to the provisions
contained in sub-section (2), on an application made by the assessee before the
expiry of the due date under sub-section (1), the 20[R434] [Assessing] Officer may extend the time for payment or
allow payment by instalments, subject to such
conditions as he may think fit to impose in the circumstances of the case.
(4)
If the amount is not paid within
the time limited under sub-section (1) or extended under sub-section (3), as
the case may be, at the place and to the person mentioned in the said notice
the assessee shall be deemed to be in default.
(5)
If, in a case where payment by instalments is allowed under sub-section (3), the assessee
commits default in paying any one of the instalments
within the time fixed under that sub-section, the assessee shall be deemed to
be in default as to the whole of the amount then outstanding, and the other instalment or instalments shall
be deemed to have been due on the same date as the instalment
actually in default.
(6)
Where an assessee has presented an
appeal under section 246 21[R435] [or section 246A], the 22[R436] [Assessing] Officer may, in his discretion and subject to
such conditions as he may think fit to impose in the circumstances of the case,
treat the assessee as not being in default in respect of the amount in dispute
in the appeal, even though the time for payment has expired, as long as such
appeal remains undisputed of.
(7)
Where an assessee has been assessed
in respect of income arising outside India in a country the laws of which
prohibit or restrict the remittance of money to India, the 23[R437] [Assessing] Officer shall not treat the assessee as in
default in respect of that part of the tax which is due in respect of that
amount of his income which, by reason of such prohibition or restriction,
cannot be brought into India, and shall continue to treat the assessee as not
in default in respect of such part of the tax until the prohibition or
restriction is removed.
Explanation.—For the purposes of this section, income shall be deemed to
have been brought into India if it has been utilized or could have been
utilized for the purposes of any expenditure actually incurred by the assessee
outside India or if the income, whether capitalized or not, has been brought
into India in any form.
DEPARTMENTAL
VIEW
1. An assessee shall not be treated to be in default in the
following situations:
(i) The demand in
dispute has arisen because the Assessing Officer had adopted an interpretation
of law in respect of which there exist conflicting decisions of one or more
High Courts or the High Court of jurisdiction has adopted a contrary
interpretation but the Department has not accepted that judgment; or
(ii)
The demand in dispute relates to issues that have been decided in favour of the assessee in an earlier order by an appellate
authority of court in assessee's own case.
In the latter situation the
assessee will be treated as not in default only in respect of the amount
attributable to such disputed points. [Circular No. 530, dated 6th March,
1989.]
2. Where an assessment order is cancelled under section 146 or
cancelled/set aside by an appellate/revisional
authority and the cancellation/setting aside becomes final on interest under
section 220(2) can be charged pursuant to the original demand notice.
Where the assessment made
originally by the Assessing Officer is either varied or even set aside by one
appellate authority but on further appeal the original order of the Assessing
Officer is restored either in part or wholly the interest payable under section
220(2) will be computed with reference to the due date reckoned from the
original demand notice and with reference to the tax finally determined.
[Circular No. 334, dated 3rd April, 1982]
221. Penalty payable when tax in default1[R438] :-
2[R439] [(1) When an
assessee is in default or is deemed to be in default in making a payment of
tax, he shall, in addition to the amount of the arrears and the amount of
interest payable under sub-section (2) of section 220, be liable, by way of
penalty, to pay such amount as the 3[R440] [Assessing] Officer may direct, and in the case of a
continuing default, such further amount or amounts as the 4[R441] [Assessing] Officer may, from time to time, direct, so,
however, that the total amount of penalty does not exceed the amount of tax in
arrears:
Provided that before levying any such penalty, the assessee shall
be given a reasonable opportunity of being heard:
5[R442] [Provided further that where the assessee proves to
the satisfaction of the 6[R443] [Assessing] Officer
that the default was for good and sufficient reasons, no penalty shall be
levied under this section.]
7[R444] [Explanation.—For
the removal of doubt, it is hereby declared that an assessee shall not cease to
be liable to any penalty under this sub-section merely by reason of the fact
that before the levy of such penalty he has paid the tax.]
(2)
Where as a result of any final
order the amount of tax, with respect to the default in the payment of which
the penalty was levied, has been wholly reduced, the penalty levied shall be
cancelled and the amount of penalty paid shall be refunded.
DEPARTMENTAL
VIEW
1. No penalty under section 221 can be legally imposed for
default in payment of penalty imposed under the provisions of Chapter XXI of
the Income-tax Act. [Letter No. 16/87/67, dated 10th July, 1967]
222. Certificate to Tax Recovery Officer1[R445] :-
2[R446] [(1) When an
assessee is in default or is deemed to be in default in making a payment of
tax, the Tax Recovery Officer may draw up under his signature a statement in
the prescribed form3 [R447] specifying the amount of arrears due from the assessee
(such statement being hereafter in this Chapter and in the Second Schedule
referred to as "certificate") and shall proceed to recover from such
assessee the amount specified in the certificate by one or more of the modes
mentioned below, in accordance with the rules laid down in the Second
Schedule—]
(a)
Attachment and sale of the assessee's movable property;
(b)
Attachment and sale of the assessee's immovable property;
(c)
Arrest of the assessee and his detention
in prison;
(d) Appointing a receiver for the management of
the assessee's movable and immovable properties.
4[R448] [Explanation.—For the purposes of this
sub-section, the assessee's movable or immovable
property shall include any property which has been transferred, directly or
indirectly on or after the 1st day of June, 1973, by the assessee to his spouse
or minor child or son's wife or son's minor child, otherwise than for adequate
consideration, and which is held by, or stands in the name of, any of the
persons aforesaid; and so far as the movable or immovable property so
transferred to his minor child or his son's minor child is concerned, it shall,
even after the date of attainment of majority by such minor child or son's
minor child, as the case may be, continue to be included in the assessee's movable or immovable property for recovering any
arrears due from the assessee in respect of any period prior to such date.]
5[R449] [(2) The Tax
Recovery Officer may take action under sub-section (1), notwithstanding that
proceedings for recovery of the arrears by any other mode have been taken.]
1[R450] [223. Tax
Recovery Officer by whom recovery is to be affected:-
(1) The Tax Recovery Officer competent to
take action under section 222 shall be—
(a)
The Tax Recovery Officer within whose jurisdiction the assessee carries on his
business or profession or within whose jurisdiction the principal place of his
business or profession is situate, or
(b)
The Tax Recovery Officer within whose jurisdiction the assessee resides or any
movable or immovable property of the assessee is situate, the jurisdiction for
this purpose being the jurisdiction assigned to the Tax Recovery Officer under
the orders or directions issued by the Board, or by the Chief Commissioner or
Commissioner who is authorised in this behalf by the
Board in pursuance of section 120.
(2) Where an assessee has property within
the jurisdiction of more than one Tax Recovery Officer and the Tax Recovery
Officer by whom the certificate is drawn up—
(a) is not able to recover the entire amount by sale
of the property, movable or immovable within his jurisdiction, or
(b)
is of the opinion that, for the purpose of expediting or securing the recovery
of the whole or any part of the amount under this Chapter, it is necessary so
to do, he may send the certificate or, where only a part of the amount is to be
recovered, a copy of the certificate certified in the prescribed manner2[R451] and specifying the amount
to be recovered to a Tax Recovery Officer within whose jurisdiction the
assessee resides or has property and, thereupon, that Tax Recovery Officer
shall also proceed to recover the amount under this Chapter as if the
certificate or copy thereof had been drawn up by him.]
1[R452] [224.
Validity of certificate and cancellation or amendment thereof:-
It shall not be open to the
assessee to dispute the correctness of any certificate drawn up by the Tax
Recovery Officer on any ground whatsoever, but it shall be lawful for the Tax
Recovery Officer to cancel the certificate if, for any reason, he thinks it
necessary so to do, or to correct any clerical or arithmetical mistake
therein.]
1[R453] [225. Stay of proceedings in pursuance of
certificate and amendment or cancellation thereof:-
(1) It shall be lawful for the Tax Recovery
Officer to grant time for the payment of any tax and when he does so, he shall
stay the proceedings for the recovery of such tax until the expiry of the time
so granted.
(2) Where the order giving rise to a demand
of tax for which a certificate has been drawn up is modified in appeal or other
proceeding under this Act, and, as a consequence thereof, the demand is reduced
but the order is the subject-matter of further proceeding under this Act, the
Tax Recovery Officer shall stay the recovery of such part of the amount
specified in the certificate as pertains to the said reduction for the period
for which the appeal or other proceeding remains pending.
(3) Where a certificate has been drawn up
and subsequently the amount of the outstanding demand is reduced as a result of
an appeal or other proceeding under this Act, the Tax Recovery Officer shall,
when the order which was the subject-matter of such appeal or other proceeding
has become final and conclusive, amend the certificate, or cancel it, as the
case may be.]
SUPREME
COURT RULING
1. The combined effect of section 225(3) and rules 56 and 63
of the Second Schedule is that before an order confirming the sale is actually
passed by the Tax Recovery Officer, the demand of tax consequent upon an order
made in appeal or other proceedings under the Act has been reduced to nil, the
Tax Recovery Officer is obliged to cancel the certificate and as soon as the
certificate is cancelled, he shall have no power to make an order confirming
the sale. The sale itself being subject to confirmation by the Tax Recovery
Officer, it would fall to the ground for want of confirmation. The term
'reduced' in section 225(3) would include a case where the demand consequent
upon an appeal or any proceedings under the Income-tax Act has been reduced to
nil also. [Sri Mohan Wahi v CIT (2001)
248 ITR 799 (SC)]
226. Other modes of recovery:-
1[R454] [(1) Where no
certificate has been drawn up under section 222, the Assessing Officer may
recover the tax by any one or more of the modes provided in this section.
(1A) where a certificate has been drawn up under
section 222, the Tax Recovery Officer may, without prejudice to the modes of
recovery specified in that section, recover the tax by any one or more of the
modes provided in this section.]
(2)
If any assessee is in receipt of
any income chargeable under the head "Salaries", the 2[R455] [Assessing] Officer 3[R456] [or Tax Recovery Officer] may require any person paying the
same to deduct from any payment subsequent to the date of such requisition any
arrears of tax due from such assessee, and such person shall comply with any
such requisition and shall pay the sum so deducted to the credit of the Central
Government or as the Board directs:
Provided that any part of the salary exempt from attachment in
execution of a decree of a civil court under section 60 of the Code of Civil
Procedure, 1908 (5 of 1908), shall be exempt from any requisition made under
this sub-section.
(3)
(i) The
4[R457] [Assessing] Officer 5[R458] [or Tax Recovery Officer] may, at any time or from time to
time, by notice in writing require any person from whom money is due or may
become due to the assessee or any person who holds or may subsequently hold
money for or on account of the assessee to pay to the 6[R459] [Assessing] Officer 7[R460] [or Tax Recovery Officer] either forthwith upon the money
becoming due or being held or at or within the time specified in the notice
(not being before the money becomes due or is held) so much of the money as is
sufficient to pay the amount due by the assessee in respect of arrears or the
whole of the money when it is equal to or less than that amount.
(ii)
A notice under this sub-section may be issued to any person who holds or may
subsequently hold any money for or on account of the assessee jointly with any
other person and for the purposes of this sub-section, the shares of the joint
holders in such account shall be presumed, until the contrary is proved, to be
equal.
(iii)
A copy of the notice shall be forwarded to the assessee at his last address
known to the 8[R461] [Assessing] Officer 9[R462] [or Tax Recovery Officer], and in the case of a joint
account to all the joint holders at their last addresses known to the 10[R463] [Assessing] Officer 11[R464] [or Tax Recovery Officer].
(iv)
Save as otherwise provided in this sub-section, every person to whom a notice
is issued under this sub-section, shall be bound to comply with such notice,
and, in particular, where any such notice is issued to a post office, banking
company or an insurer, it shall not be necessary for any pass book, deposit
receipt, policy or any other document to be produced for the purpose of any
entry, endorsement or the like being made before payment is made,
notwithstanding any rule, practice or requirement to the contrary.
(v)
Any claim respecting any property in relation to which a notice under this
sub-section has been issued arising after the date of the notice shall be void
as against any demand contained in the notice.
(vi)
Where a person to whom a notice under this sub-section is sent objects to it by
a statement on oath that the sum demanded or any part thereof is not due to the
assessee or that he does not hold any money for or on account of the assessee,
then, nothing contained in this sub-section shall be deemed to require such
person to pay any such sum or part thereof, as the case may be, but if it is
discovered that such statement was false in any material particular, such
person shall be personally liable to the 12[R465] [Assessing] Officer 13[R466] [or Tax Recovery Officer] to the extent of his own
liability to the assessee on the date of the notice, or to the extent of the assessee's liability for any sum due under this Act,
whichever is less.
(vii)
The 14[R467] [Assessing] Officer 15[R468] [or Tax Recovery Officer] may, at any time or from time to
time, amend or revoke any notice issued under this sub-section or extend the
time for making any payment in pursuance of such notice.
(viii)
The 16[R469] [Assessing] Officer 17[R470] [or Tax Recovery Officer] shall grant a receipt for any
amount paid in compliance with a notice issued under this sub-section, and the
person so paying shall be fully discharged from his liability to the assessee
to the extent of the amount so paid.
(ix)
Any person discharging any liability to the assessee after receipt of a notice
under this sub-section shall be personally liable to the 18[R471] [Assessing] Officer 19[R472] [or Tax Recovery Officer] to the extent of his own
liability to the assessee so discharged or to the extent of the assessee's liability for any sum due under this Act,
whichever is less.
(x)
If the person to whom a notice under this sub-section is sent fails to make
payment in pursuance thereof to the 20[R473] [Assessing] Officer 21[R474] [or Tax Recovery Officer], he shall be deemed to be an
assessee in default in respect of the amount specified in the notice and
further proceedings may be taken against him for the realization of the amount
as if it were an arrear of tax due from him, in the manner provided in sections
222 to 225 and the notice shall have the same effect as an attachment of a debt
by the Tax Recovery Officer in exercise of his powers under section 222.
(4) The 22[R475] [Assessing] Officer 23[R476] [or Tax Recovery Officer] may apply to the court in whose
custody there is money belonging to the assessee for payment to him of the
entire amount of such money, or, if it is more than the tax due, an amount
sufficient to discharge the tax.
24[R477] [(5) The 25[R478] [Assessing] Officer 26[R479] [or Tax Recovery Officer] may, if so authorised
by the 27[R480] [Chief Commissioner or Commissioner] by general or special
order, recover any arrears of tax due from an assessee by distrait and sale of
his movable property in the manner laid down in the Third Schedule.]
SUPREME
COURT RULING
1. The right of membership of the stock exchange is not a
private asset. It is merely a personal privilege granted to a member. It is
non-transferable and incapable of alienation by the member or his legal
representatives except to the limited extent provided in the rules and subject
to fulfillment of conditions. The right of nomination vests absolutely with the
stock exchange. The membership right or membership card is not the property of
the member and therefore, it cannot be attached. Since no amount on account of
the member was due from or held by the stock exchange, section 226(3) could not
be invoked. [Stock Exchange, Ahmedabad v ACIT
(2001) 248 ITR 209 (SC)]
2. Section 226(3) is applicable only when money is due to the
assessee-in-default from any person. Clause (vi)
of section 226(3) in categorical terms creates a legal fiction to the effect
that when an amount is not payable, such person is not required to pay any such
amount or part thereof. [Administrator, UTI v Malani
B.M. (2008) 296 ITR 31 (SC)]
227. Recovery through State Government:-
If the recovery of tax in any area has been entrusted to a State Government under clause (1) of article 258 of the Constitution1[R481] , the State Government may direct, with respect to that area or any part thereof, that tax shall be recovered therein with, and as an addition to, any municipal tax or local rate, by the same person and in the same manner as the municipal tax or local rate is recovered.
228. Recovery of Indian tax in Pakistan
and Pakistani tax in India:-
Omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.
Prior to its omission, section 228 was amended by the Direct Tax Laws
(Amendment) Act, 1989, w.r.e.f. 1-4-1988.]
1[R482] [228
A. Recovery of tax in pursuance of agreements with foreign countries:-
(1) Where an agreement is entered into by the Central Government with the Government of any country outside India for recovery of income-tax under this Act and the corresponding law in force in that country and the Government of that country or any authority under that Government which is specified in this behalf in such agreement sends to the Board a certificate for the recovery of any tax due under such corresponding law from a person having any property in India, the Board may forward such certificate to any Tax Recovery Officer within whose jurisdiction such property is situated and thereupon such Tax Recovery Officer shall—
(a) Proceed to recover the amount specified in the
certificate in the manner in which he would proceed to recover the amount 2[R483] [specified in a certificate drawn up by him under section
222]; and
(b) Remit any sum so recovered by him to the Board
after deducting his expenses in connection with the recovery proceedings.
3[R484] [(2) Where an
assessee is in default or is deemed to be in default in making a payment of
tax, the Tax Recovery Officer may, if the assessee has property in a country
outside India (being a country with which the Central Government has entered
into an agreement for the recovery of income-tax under this Act and the
corresponding law in force in that country), forward to the Board a certificate
drawn up by him under section 222 and the Board may take such action thereon as
it may deem appropriate having regard to the terms of the agreement with such
country.]
229. Recovery of penalties, fine, interest and other sums1[R485] :-
Any sum imposed by way of
interest, fine, penalty, or any other sum payable under the provisions of this
Act, shall be recoverable in the manner provided in this Chapter for the
recovery of arrears of tax.
230. Tax clearance certificate1[R486] :-
2[R487] [(1) Subject to
such exceptions as the Central Government may by notification3[R488] in the Official Gazette, specify
in this behalf, no person,—
(a)
Who is not domiciled in India;
(b)
Who has come to India in connection with
business, profession or employment, and
(c)
Who has income derived from any source in
India, shall leave the territory of India by land, sea or air unless he
furnishes to such authority as may be prescribed4[R489] —
(i) An
undertaking in the prescribed form from his employer; or
(ii) through whom such person is in receipt of the
income, to the effect that tax payable by such person who is not domiciled in
India, shall be paid by the employer referred to in clause (i)
or the person referred to in clause (ii), and the prescribed authority
shall, on receipt of the undertaking5[R490] , immediately give to such person a no objection
certificate6[R491] , for leaving India:
Provided that nothing contained in sub-section (1) shall apply to a
person who is not domiciled in India but visits India as a foreign tourist or
for any other purpose not connected with business, profession or employment.
(1A) Subject to such exceptions as the Central
Government may, by notification in the Official Gazette, specify in this
behalf, every person, who is domiciled in India at the time of his departure
from India, shall furnish in the prescribed form7[R492] to the income-tax authority
or such other authority as may be prescribed8[R493] —
(a) The permanent account number allotted to him
under section 139A:
Provided that in case no such permanent account number has been
allotted to him, or his total income is not chargeable to income-tax or he is
not required to obtain a permanent account number under this Act, such person
shall furnish a certificate in the prescribed form;
(b) The purpose of his visit outside India;
(c) The estimated period of his stay outside
India:
Provided that no person—
(i) Who is
domiciled in India at the time of his departure; and
(ii)
In respect of whom circumstances exist which, in the opinion of an income-tax
authority render it necessary for such person to obtain a certificate under
this section, shall leave the territory of India by land, sea or air unless he
obtains a certificate9[R494] from the income-tax
authority stating that he has no liabilities under this Act, or the Wealth-tax
Act, 1957 (27 of 1957), or the Gift-tax Act, 1958 (18 of 1958), or the Expenditure-tax
Act, 1987 (35 of 1987), or that satisfactory arrangements have been made for
the payment of all or any of such taxes which are or may become payable by that
person:
Provided that no income-tax authority shall make it necessary for
any person who is domiciled in India to obtain a certificate under this section
unless he records the reasons therefore and obtains the prior approval of the
Chief Commissioner of Income-tax.]
(2) If the owner or charterer
of any ship or aircraft carrying persons from any place in the territory of
India to any place outside India allows any person to whom sub-section (1) 10[R495] [or the first proviso to sub-section (1A)] applies to
travel by such ship or aircraft without first satisfying himself that such
person is in possession of a certificate as required by that sub-section, he
shall be personally liable to pay the whole or any part of the amount of tax,
if any, payable by such person as the 11[R496] [Assessing] Officer may, having regard to the circumstances
of the case, determine.
(3) In respect of any sum payable by the
owner or charterer of any ship or aircraft under
sub-section (2), the owner or charterer, as the case
may be, shall be deemed to be an assessee in default for such sum, and such sum
shall be recoverable from him in the manner provided in this Chapter as if it
were an arrear of tax.
12[R497] (4) The Board
may make rules for regulating any matter necessary for, or incidental to, the
purpose of carrying out the provisions of this section.
Explanation. — For the purposes of this section, the expressions
"owner" and "charterer" include
any representative, agent or employee empowered by the owner or charterer to allow persons to travel by the ship or
aircraft.
DEPARTMENTAL
VIEW
1. There shall be no requirement of furnishing Income-tax
Clearance Certificate by persons leaving India w.e.f.
1-1-2003. [F. No. 153/191/2002, dated 13-2-2003]
2. Contractors are not required to obtain Income Tax Clearance
Certificates from the Department and there is no need to furnish such certificate
while submitting tenders or obtaining commercial contracts. [F. No.
153/191/2002, dated 13-2-2003 reiterated in Circular No. 2/2004, dated
10-2-2004] ITCC shall also not be required for any other purposes such as
registration or renewal of registration of contractors, renewal of
import/export licences, renewal of post licences and renewal of shipping licenses. All such persons
shall quote their Permanent Account Number in the documents. [Circular No.
2/2004, dated 10-2-2004]
2. A one time tax clearance certificate facility is available
for foreign employees not domiciled in India who have a fixed tenure of service
in India up to five years to travel abroad any number of times during the
period of the contract of his service. The employer of the foreign employee
should be an Indian concern or a foreign concern assessed in India and has a
fixed place of business in India. [Circular No. 546, dated 4th October, 1989]
3. In appropriate cases where the employee/director of the
company has to proceed out of India on business at short notice, the Assessing
Officer may accept the guarantee furnished under section 230 without the seal
of the company provided it has been executed by a person duly authorised in this behalf by the articles of association or
power of attorney or any other suitable document. [Letter No. 485/3/72 FTD,
dated 15th May, 1973]
1[R498] [230A.
Restrictions on registration of transfers of immovable property in certain
cases:-
Omitted
by the Finance Act, 2001, w.e.f. 1-6-2001. It was inserted by the Direct Taxes (Amendment) Act, 1964,
w.e.f. 6-10-1964.]
DEPARTMENTAL
VIEW
1. The word "value" should be construed as the value
adopted by the Registering Authority for the purpose of stamp duty and not the
value declared by the assessee in the document presented for registration. So
also, when an undivided share in a property is sought to be transferred, what
is relevant is the valuation "of" the property and not merely the
interest to be transferred "in" the property. [Letter F. No.
358/3/91-IT(B), dated 10th December, 1992]
2. It is not correct on the part of registering authorities to
insist on production of clearance certificate from trustees in respect of their
personal tax liabilities even when the document tendered for registration is in
respect of trust properties only. [Letter No. 328/72/71, dated 26th February,
1973]
231. Period for commencing recovery proceedings:-
Omitted
by the Direct Tax Laws (Amendment) Act, 1987, w.e.f.
1-4-1989. Prior to the omission,
section 231 was amended by the Taxation Laws (Amendment) Act, 1984, w.e.f. 1-10-1984.]
232. Recovery by suit or under other law not affected:-
The several modes of
recovery specified in this Chapter shall not affect in any way—
(a)
Any other law for the time being in force
relating to the recovery of debts due to Government; or
(b) The right of the Government to institute a
suit for the recovery of the arrears due from the assessee; and it shall be
lawful for the 1[R499] [Assessing] Officer or the Government, as the case may be,
to have recourse to any such law or suit, notwithstanding that the tax due is
being recovered from the assessee by any mode specified in this Chapter.
E.—Tax payable under provisional assessment
233. Recovery of tax payable under provisional assessment:-
Omitted
by the Taxation Laws (Amendment) Act, 1970, w.e.f.
1-4-1971.]
234. Tax paid by deduction or advance payment:-
Omitted
by the Direct Tax Laws (Amendment) Act, 1987, w.e.f.
1-4-1989. Prior to the omission,
section 234 was amended by the Taxation Laws (Amendment) Act, 1970, w.r.e.f. 1-4-1968/w.e.f. 1-4-1971.]
1[R500] [F.—Interest chargeable in certain cases]
2[R501] [234 A. Interest for
defaults in furnishing return of income3[R502] :-
(1) Where the return of income for any
assessment year under sub-section (1) or sub-section (4) of section 139, or in
response to a notice under sub-section (1) of section 142, is furnished after
the due date, or is not furnished, the assessee shall be liable to pay simple
interest at the rate of 4[R503] [one per cent] for every month or part of a month comprised
in the period commencing on the date immediately following the due date, and,—
(a)
Where the return is furnished after the
due date, ending on the date of furnishing of the return; or
(b)
Where no return has been furnished,
ending on the date of completion of the assessment under section 144,
5[R504] [on the amount of the tax on the total income as determined
under sub-section (1) of section 143, and where a regular assessment is made,
on the amount of the tax on the total income determined under regular
assessment, as reduced by the amount of,—
(i) Advance
tax, if any, paid;
(ii)
Any tax deducted or collected at source;
(iii) Any relief of tax allowed under section 90 on
account of tax paid in a country outside India;
(iv) Any relief of tax allowed under section 90A on account of tax
paid in a specified territory outside India referred to in that section;
(v) Any deduction, from the Indian income-tax
payable, allowed under section 91, on account of tax paid in a country outside
India; and
(vi) Any tax credit allowed to be set off in accordance with the
provisions of section 115JAA.]
Explanation 1.—In this section, "due date" means the date
specified in sub-section (1) of section 139 as applicable in the case of the
assessee.
6[R505] [Explanation 2.—In this sub-section,
"tax on the total income as determined under sub-section (1) of section
143" shall not include the additional income-tax, if any, payable under
section 143.]
Explanation 3.—Where, in relation
to an assessment year, an assess-ment is made for the
first time under section 147 7[R506] [or section 153A], the assessment so made shall be regarded
as a regular assessment for the purposes of this section.
[Explanation 4.—Omitted by the Finance Act, 2001, w.r.e.f. 1-4-1989. It was inserted by the Direct Tax Laws (Amendment)
Act, 1989, w.e.f. 1-4-1989.]
(2) The interest payable under sub-section
(1) shall be reduced by the interest, if any, paid under section 140A towards
the interest chargeable under this section.
(3) Where the return of income for any
assessment year, required by a notice under section 148 8[R507] [or section 153A] issued 9[R508] [after the determination of income under sub-section (1) of
section 143 or] after the completion of an assessment under sub-section (3) of
section 143 or section 144 or section 147, is furnished after the expiry of the
time allowed under such notice, or is not furnished, the assessee shall be
liable to pay simple interest at the rate of 10[R509] [one per cent], for every month or part of a month comprised
in the period commencing on the day immediately following the expiry of the
time allowed as aforesaid, and,—
(a)
Where the return is furnished after the expiry of the time aforesaid, ending on
the date of furnishing the return; or
(b)
Where no return has been furnished, ending on the date of completion of the
re-assessment or re-computation under section 147 11[R510] [or reassessment under section 153A],
On the amount by which the
tax on the total income determined on the basis of such re-assessment or re-computation
exceeds the tax on the total income determined 12[R511] [under sub-section (1) of section 143 or] on the basis of
the earlier assessment aforesaid.
[Explanation. — omitted
by the Direct Tax Laws (Amendment)
Act, 1989, w.e.f. 1-4-1989.]
(4) Where as a result of an order under
section 154 or section 155 or section 250 or section 254 or section 260 or
section 262 or section 263 or section 264 or an order of the Settlement
Commission under sub-section (4) of section 245D, the amount of tax on which
interest was payable under sub-section (1) or sub-section (3) of this section
has been increased or reduced, as the case may be, the interest shall be
increased or reduced accordingly, and—
(i) In a case
where the interest is increased, the Assessing Officer shall serve on the
assessed a notice of demand in the prescribed form specifying the sum payable,
and such notice of demand shall be deemed to be a notice under section 156 and
the provisions of this Act shall apply accordingly;
(ii) In a case where the interest is reduced, the
excess interest paid, if any, shall be refunded.
(5) The provisions of this section shall
apply in respect of assessment for the assessment year commencing on the 1st
day of April, 1989 and subsequent assessment years.]
DEPARTMENTAL
VIEW/SUPREME COURT RULING
1. All requests for waiver of interest are to be considered by
the Chief Commissioner of Income-tax and the Director General of Income-tax
within the parameters laid down by Boards order, dated
23-5-1996 read with the Order, dated 30-1-1997. Any claim of waiver of interest
based on the Press Note, dated 21-5-1996 is not sustainable. [Circular No.
783, dated 18th November, 1999]
2. Where a return for assessment year 1997-98 is filed under
the proviso to section 139(1), interest under section 234A shall not be levied
up to 28-2-1998. [Order F. No. 400/234/95-IT(B), dated 31-7-1997]
3. In cases where any income accrues or arises for any
previous year due to the operation of any order of a court, statutory authority
of the Government (other than an order of assessment, appeal, reference or
revision passed under the provisions of the Income-tax Act), interest under
sections 234A, 234B and 234C shall be reduced or waived. [Order F. No.
212/495/92-ITA-II, dated 2-5-1994]
4. The Board has ordered that in the cases of assessees, who
reside in, or have their principal place of business in, the Kashmir Valley and
are assessed or assessable in the Kashmir Valley and have filed their returns
of income for the assessment years 1990-91 to 1993-94, interest chargeable
under section 234A (for belated filing of the returns) and under section 234B
(for default in payment of advance tax) shall be waived for these assessment
years for the period up to the date of filing of the return of income or one
year from the end of the assessment year whichever expires earlier. [F. No.
243/6/90-ITA-II, dated 1st September, 1992] This order has been extended
every year up to A.Y. 2005-06 for the period up to the date of filing of the
return of income or up to 31-3-2007. [F. No. 275/17/2005-ITB, dated 16th
May, 2005]
5. The due date for submission of income-tax returns by
working partners of firms whose accounts are required to be compulsorily
audited under section 44AB was extended up to 31-10-1993 for assessment year
1993-94. Consequently, no interest under this section shall be chargeable in
the aforesaid cases for the period up to 31-10-1993. [Press Note, dated 27th
August, 1993]
6. The expression "shall" used in sections 234A,
234B and 234C cannot be construed as "may".
The intention of the Legislature was to make the collection of statutory
interest mandatory. [CIT v Anjum M H
Ghaswala (2001) 252 ITR 1 (SC)]
1[R512] [234B.
Interest for defaults in payment of advance tax2[R513] :-
(1) Subject to the other provisions of this
section, where, in any financial year, an assessee who is liable to pay advance
tax under section 208 has failed to pay such tax or, where the advance tax paid
by such assessee under the provisions of section 210 is less than ninety per
cent of the assessed tax, the assessee shall be liable to pay simple interest
at the rate of 3[R514] [one per cent] for every month or part of a month comprised
in the period from the 1st day of April next following such financial year 4[R515] [to the date of determination of total income under
sub-section (1) of section 143 5[R516] [and where a regular assessment is made, to the date of
such regular assessment, on an amount]] equal to the assessed tax or, as the
case may be, on the amount by which the advance tax paid as aforesaid falls
short of the assessed tax.
6[R517] [Explanation 1.—In this section,
"assessed tax" means the tax on the total income determined under
sub-section (1) of section 143 and where a regular assessment is made, the tax
on the total income determined under such regular assessment as reduced by the
amount of,—
(i) any tax
deducted or collected at source in accordance with the provisions of Chapter
XVII on any income which is subject to such deduction or collection and which
is taken into account in computing such total income;
(ii) Any relief of tax allowed under section 90 on
account of tax paid in a country outside India;
(iii) Any relief of tax allowed under section 90A on
account of tax paid in a specified territory outside India referred to in that
section;
(iv) Any deduction, from the Indian income-tax payable, allowed
under section 91, on account of tax paid in a country outside India; and
(v) Any tax credit allowed to be set off in
accordance with the provisions of section 115JAA.]
Explanation 2.—Where in relation to
an assessment year, an assess-ment is made for the
first time under section 147 7[R518] [or section 153A], the assessment so made shall be regarded
as a regular assessment for the purposes of this section.
8[R519] [Explanation 3.—In
Explanation 1 and in sub-section (3), "tax on the total income
determined under sub-section (1) of section 143" shall not include the
additional income-tax, if any, payable under section 143.]
(2) Where, before the date of 9[R520] [determination of total income under sub-section (1) of
section 143 or] completion of a regular assessment, tax is paid by the assessee
under section 140A or otherwise—
(i) Interest
shall be calculated in accordance with the foregoing provisions of this section
up to the date on which the tax is so paid, and reduced by the interest, if
any, paid under section 140A towards the interest chargeable under this
section;
(ii) Thereafter, interest shall be calculated at
the rate aforesaid on the amount by which the tax so paid together with the
advance tax paid falls short of the assessed tax.
(3) Where, as a result of an order of
re-assessment or re-computation under section 147 10[R521] [or section 153A], the amount on which interest was payable
under sub-section (1) is increased, the assessee shall be liable to pay simple
interest at the rate of 11[R522] [one per cent] for every month or part of a month comprised
in the period commencing on the day following 12[R523] [the date of determination of total income under
sub-section (1) of section 143 13[R524] [and where a regular assessment is made as is referred to
in sub-section (1) following the date of such regular assessment]] and ending
on the date of the re-assessment or re-computation under section 147 14[R525] [or section 153A], on the amount by which the tax on the
total income determined on the basis of the re-assessment or re-computation
exceeds the tax on the total income determined 15[R526] [under sub-section (1) of section 143 or] on the basis of
the regular assessment aforesaid.
[Explanation.—Omitted by the Direct Tax Laws (Amendment)
Act, 1989, w.e.f. 1-4-1989. It was inserted
by the Direct Tax Laws (Amendment) Act, 1987, with effect from
the same date.]
(4) Where, as a result of an order under
section 154 or section 155 or section 250 or section 254 or section 260 or
section 262 or section 263 or section 264 or an order of the Settlement
Commission under sub-section (4) of section 245D, the amount on which interest
was payable under sub-section (1) or sub-section (3) has been increased or
reduced, as the case may be, the interest shall be increased or reduced
accordingly, and—
(i) In a case
where the interest is increased, the Assessing Officer shall serve on the
assessee a notice of demand in the prescribed form specifying the sum payable
and such notice of demand shall be deemed to be a notice under section 156 and
the provisions of this Act shall apply accordingly;
(ii) In a case where the interest is reduced, the
excess interest paid, if any, shall be refunded.
(5) The provisions of this section shall
apply in respect of assessments for the assessment year commencing on the 1st
day of April, 1989 and subsequent assessment years.]
DEPARTMENTAL
VIEW/SUPREME COURT RULING
1. In case of a regular assessment under section 172(7), the
non-resident assessee is liable to pay interest under sections 234B and 234C
and also entitled to receive interest under section 244A of the Income-tax Act,
as the case may be. [Circular No. 9/2001, dated 9-7-2001, withdrawing
Circular No. 730, dated 14-12-1995]
2. All requests for waiver of interest are to be considered by
the Chief Commissioner of Income-tax and the Director General of Income-tax
within the parameters laid down by Boards order, dated
23-5-1996 read with the Order, dated 30-1-1997. Any claim of waiver of interest
based on the Press Note, dated 21-5-1996 is not sustainable. [Circular No.
783, dated 18th November, 1999]
3. Where a return for assessment year 1997-98 is filed under
the proviso to section 139(1), no interest under section 234B shall be levied.
[Order F. No. 400/234/95-IT(B), dated
31-7-1997]
4. If the last day for payment of any instalments
of advance-tax is a day on which the receiving bank is closed, the assessee can
make the payment on the next immediately following working day, and in such
cases, the mandatory interest leviable under sections
234B and 234C will not be charged. [Circular No. 676, dated 14th January,
1994]
5. See CBDT's Order F. No. 212/495/92-ITA-II, dated 2-5-1994, extracted
under section 234A, ante.
6. The Board has ordered that in the cases of assessees, who
reside in, or have their principal place of business in, the Kashmir Valley and
are assessed or assessable in the Kashmir Valley and have filed their returns
of income for the assessment years 1990-91 to 1993-94, interest chargeable
under section 234A (for belated filing of the returns) and under section 234B
(for default in payment of advance tax) shall be waived for these assessment
years for the period up to the date of filing of the return of income or one
year from the end of the assessment year whichever expires earlier. [F. No.
243/6/90-ITA-II, dated 1st September, 1992] This
order has been extended every year upto A.Y. 2005-06
for the period upto the date of filing of the return
of income or up to 31-3-2007. [F. No. 275/17/2005-ITB, dated 16th May, 2005]
7. The expression "shall" used in sections 234A,
234B and 234C cannot be construed as "may".
The intention of the Legislature was to make the collection of statutory
interest mandatory. [CIT v Anjum M H
Ghaswala (2001) 252 ITR 1 (SC)]
1[R527] [234C.
Interest for deferment of advance tax2[R528] :-
3[R529] [(1) Where in
any financial year,—
(a) The company which is liable to pay advance tax
under section 208 has failed to pay such tax or—
(i) the
advance tax paid by the company on its current income on or before the 15th day
of June is less than fifteen per cent of the tax due on the returned income or
the amount of such advance tax paid on or before the 15th day of September is
less than forty-five per cent of the tax due on the returned income or the amount
of such advance tax paid on or before the 15th day of December is less than
seventy-five per cent of the tax due on the returned income, then, the company
shall be liable to pay simple interest at the rate of 4[R530] [one per cent] per month for a period of three months on
the amount of the shortfall from fifteen per cent or forty-five per cent or
seventy-five per cent, as the case may be, of the tax due on the returned
income;
(ii)
the advance tax paid by the company on its current income on or before the 15th
day of March is less than the tax due on the returned income, then, the company
shall be liable to pay simple interest at the rate of 5[R531] [one per cent] on the amount of the shortfall from the tax
due on the returned income:
Provided that if the advance tax paid by the company on its current
income on or before the 15th day of June or the 15th day of September, is not
less than twelve per cent or, as the case may be, thirty-six per cent of the
tax due on the returned income, then, it shall not be liable to pay any
interest on the amount of the shortfall on those dates;
(b)
The assessee, other than a company, who is liable to pay advance tax under
section 208 has failed to pay such tax or,—
(i) the
advance tax paid by the assessee on his current income on or before the 15th
day of September is less than thirty per cent of the tax due on the returned
income or the amount of such advance tax paid on or before the 15th day of
December is less than sixty per cent of the tax due on the returned income,
then, the assessee shall be liable to pay simple interest at the rate of 6[R532] [one per cent] per month for a period of three months on
the amount of the shortfall from thirty per cent or, as the case may be, sixty
per cent of the tax due on the returned income;
(ii)
the advance tax paid by the assessee on his current income on or before the
15th day of March is less than the tax due on the returned income, then, the
assessee shall be liable to pay simple interest at the rate of 7[R533] [one per cent] on the amount of the shortfall from the tax
due on the returned income:]
8[R534] [Provided that nothing contained in this sub-section
shall apply to any shortfall in the payment of the tax due on the returned
income where such shortfall is on account of under-estimate or failure to estimate—
(a) The amount of capital gains; or
(b) Income of the nature referred in sub-clause (ix)
of clause (24) of section 2, and the assessee has paid the whole of the amount
of tax payable in respect of income referred to in clause (a) or clause
(b), as the case may be, had such income been a part of the total
income, as part of the 9[R535] [remaining instalments of advance
tax which are due or where no such instalments are
due], by the 31st day of March of the financial year:
[Proviso omitted by the
Finance (No. 2) Act, 1996, w.e.f.
1-4-1997. It was inserted by the Taxation Laws (Amendment) Act,
1991, w.e.f. 15-1-1991.]
10[R536] [Provided further that nothing contained in this
sub-section shall apply to any shortfall in the payment of the tax due on the
returned income where such shortfall is on account of increase in the rate of
surcharge under section 2 of the Finance Act, 2000 (10 of 2000), as amended by
the Taxation Laws (Amendment) Act, 2000 (1 of 2001), and the assessee has paid
the amount of shortfall, on or before the 15th day of March, 2001 in respect of
the instalment of advance tax due on the 15th day of
June, 2000, the 15th day of September, 2000 and the 15th day of December,
2000:]
11[R537] [Provided also that nothing contained in this
sub-section shall apply to any shortfall in the payment of the tax due on the
returned income where such shortfall is on account of increase in the rate of
surcharge under section 2 of the Finance Act, 2000 (10 of 2000) as amended by
the Taxation Laws (Amendment) Act, 2001 (4 of 2001) and the assessee has paid
the amount of shortfall on or before the 15th day of March, 2001 in respect of
the instalment of advance tax due on the 15th day of
June, 2000, the 15th day of September, 2000 and 15th day of December, 2000.]
6[Explanation.—In
this section, "tax due on the returned income" means the tax
chargeable on the total income declared in the return of income12[R538] furnished by the assessee
for the assessment year commencing on the 1st day of April immediately
following the financial year in which the advance tax is paid or payable, as
reduced by the amount of,—
(i) Any tax
deductible or collectible at source in accordance with the provisions of
Chapter XVII on any income which is subject to such deduction or collection and
which is taken into account in computing such total income;
(ii) Any relief of tax allowed under section 90 on
account of tax paid in a country outside India;
(iii) Any relief of tax allowed under section 90A on
account of tax paid in a specified territory outside India referred to in that
section;
(iv) Any deduction, from the Indian income-tax payable, allowed
under section 91, on account of tax paid in a country outside India; and
(v) Any tax credit allowed to be set off in
accordance with the provisions of section 115JAA.]
(2) The provisions of this section shall
apply in respect of assessments for the assessment year commencing on the 1st
day of April, 1989 and subsequent assessment years.
DEPARTMENTAL
VIEW/SUPREME COURT RULING
1. In case of a regular assessment under section 172(7), the
non-resident assessee is liable to pay interest under sections 234B and 234C
and also entitled to receive interest under section 244A of the Income-tax Act,
as the case may be. [Circular No. 9/2001, dated 9-7-2001, withdrawing
Circular No. 730, dated 14-12-1995]
2. All requests for waiver of interest are to be considered by
the Chief Commissioner of Income-tax and the Director General of Income-tax
within the parameters laid down by Boards order, dated
23-5-1996 read with the Order, dated 30-1-1997. Any claim of waiver of interest
based on the Press Note, dated 21-5-1996 is not sustainable. [Circular No.
783, dated 18th November, 1999]
3. If the last day for payment of any instalments
of advance-tax is a day on which the receiving bank is closed, the assessee can
make the payment on the next immediately following working day, and in such
cases, the mandatory interest leviable under sections
234B and 234C will not be charged. [Circular No. 676, dated 14th January,
1994]
4. Where a return for assessment year 1997-98 is filed under
the proviso to section 139(1), no interest under section 234C shall be levied.
[Order F. No. 400/234/95-IT(B),
dated 31-7-1997]
5. See CBDT's Order F. No. 212/495/92-ITA-II, dated 2-5-1994, extracted
under section 234A, ante.
6. On account of disturbances, curfew, etc., no interest under
this section shall be charged from those assessees who could not pay the second
instalment of advance tax by the due date, i.e. 15-12-1992,
provided they have paid the advance tax on or before 31-12-1992. [Order No.
nil, dated 11th February, 1993]
7. The expression "shall" used in sections 234A,
234B and 234C cannot be construed as "may".
The intention of the Legislature was to make the collection of statutory
interest mandatory. [CIT v Anjum M H
Ghaswala (2001) 252 ITR 1 (SC)]
1[R539] [234D.
Interest on excess refund:-
(1) Subject to the other provisions of this
Act, where any refund is granted to the assessee under sub-section (1) of
section 143, and—
(a)
No refund is due on regular assessment;
or
(b) The amount refunded under sub-section (1) of
section 143 exceeds the amount refundable on regular assessment, the assessee
shall be liable to pay simple interest at the rate of 2[R540] [one-half per cent] on the whole or the excess amount so
refunded, for every month or part of a month comprised in the period from the
date of grant of refund to the date of such regular assessment.
(2) Where, as a result of an order under
section 154 or section 155 or section 250 or section 254 or section 260 or
section 262 or section 263 or section 264 or an order of the Settlement
Commission under sub-section (4) of section 245D, the amount of refund granted
under sub-section (1) of section 143 is held to be correctly allowed, either in
whole or in part, as the case may be, then, the interest chargeable, if any,
under sub-section (1) shall be reduced accordingly.
Explanation.—Where, in relation
to an assessment year, an assessment is made for the first time under section
147 or section 153A, the assessment so made shall be regarded as a regular
assessment for the purposes of this section.]
[1]See Circular No. 292, dated 5-2-1981 and Instruction No. 1234, dated 30-1-1979.
[2]Inserted by the Direct Tax Laws (Amendment) Act, 1989, w.r.e.f. 1-6-1988.
[3]Inserted by the Finance Act, 2002, w.e.f. 1-6-2002.
[4]See Circular No. 3, dated 11-2-1969; 141, dated 23-7-1974; 232, dated 26-11-1977; 261, dated 8-8-1979; 265, dated 11-4-1980; 306, dated 19-6-1981; Letters F. No. 12/69/65-IT(B), dated 2-3-1966; 385/12/77-171(B), dated 31-3-1977 and 385/37/81-IT(B), dated 3-10-1981.
[5]The figure "(1)" omitted by the Finance Act, 1965, w.e.f. 1-4-1965.
[6]Substituted by the Finance Act, 2008, w.r.e.f. 1-6-2003. Prior to the
substitution, the proviso, as inserted by the Finance Act, 2003, w.e.f. 1-6-2003 read as under:
"Explanation.—For the removal of doubts it is hereby declared that if any person referred to in section 200 and in the cases referred to in section 194, the principal officer and the company of which he is the principal officer does not deduct the whole or any part of the tax and such tax has not been paid by the assessee direct, then, such person, the principal officer and the company shall, without prejudice to any other consequences which he or it may incur, be deemed to be an assessee in default as referred to in sub-section (1) of section 201 in respect of such tax."
[7]Sub-section (2) omitted by the Finance Act, 1965, w.e.f. 1-4-1965.
[8]See Letters F. No. 28/8/61-IT, dated 25-2-1963; 12/71/65-IT(B), dated 5-3-1966; 35/2/68-IT(AI), dated 15-11-1972; 212/98/72-IT(AII), dated 18-11-1972; 237/4/75-A&PAC, dated 23-11-1976; Circular Nos. 14P(LVIII-36), dated 23-12-1968; 10, dated 26-3-1969; 43, dated 20-6-1970; 90, dated 26-6-1972; 147, dated 28-10-1974; 196, dated 31-3-1976; 272, dated 27-5-1980; 285, dated 21-10-1980; 517, dated 16-6-1988; 537, dated 12-7-1989; 568, dated 27-7-1990; 612, dated 13-11-1991; 629, dated 31-7-1992; 654, dated 22-7-1993; 678, dated 10-2-1994; 685, dated 20-6-1994; 690, dated 1-9-1994; 696, dated 16-12-1994; 719, dated 22-8-1995; 724, dated 29-9-1995; 747, dated 2-12-1996; 752, dated 26-3-1997; 756, dated 10-10-1997; 757, dated 20-10-1997; 758, dated 7-11-1997; 761, dated 13-1-1998; 771, dated 3-11-1998; 775, dated 26-3-1999; 781, dated 5-11-1999; 798, dated 30-10-2000; 4/2001, dated 12-2-2001; 15/2001, dated 12-12-2001 partly superseded by C. No. 1/2002, dated 4-2-2002; 13/2002, dated 23-12-2002; 9/2003, dated 18-11-2003; 6/2004, dated 6-12-2004; 9/2005, dated 30-11-2005; 11/2006, dated 16-11-2006 and 8/2007, dated 5-12-2007.
[9]See rules 26B, 30, 31, 31A, 36A and 37B and Form Nos. 16, 16AA, 24Q and 27A.
[10]The words "and super-tax" omitted by the Finance Act, 1965, w.e.f. 1-4-1965.
[11]The words "and average rate of super-tax respectively" omitted, ibid.
[12]Substituted for "rates of tax in force" by the Finance Act, 1968, w.e.f. 1-4-1968.
[13]Inserted by the Finance Act, 2002, w.e.f. 1-6-2002.
[14]See rules 26A (2), 30, 31, 31A and Form nos. 12BA, 16, 24Q and 27A.
[15]Inserted by the Finance Act, 1987, w.e.f. 1-6-1987. Earlier, sub-section (2) was omitted by the Finance Act, 1965, w.e.f. 1-4-1965.
[16]See rule 26A (1) and Form No. 12B.
[17]Inserted by the Finance Act, 1987, w.e.f. 1-6-1987. See rule 21AA and Form No. 10E.
[18]Substituted for "public sector undertaking" by the Finance Act, 1989, w.e.f. 1-6-1989.
[19]Inserted, ibid.
[21]Substituted by the Finance (No. 2) Act, 1998, w.e.f. 1-8-1998. Sub-section (2B) was inserted by the Finance Act, 1987, w.e.f. 1-6-1987.
[22]See rule 26B.
[23]Inserted by the Finance Act, 2001, w.e.f. 1-6-2001.
[24]See rule 26A and Form Nos. 12BA and 16.
[25]Inserted by the Finance Act, 2002, w.e.f. 1-6-2002.
[26]Inserted by the Finance Act, 1987, w.e.f. 1-6-1987. Earlier, the words "or sub-section (2)" were omitted by the Finance Act, 1965, w.e.f. 1-4-1965.
[27]See rule 33.
[28]Substituted for "income-tax and super-tax" by the Finance Act, 1965, w.e.f. 1-4-1965.
[29]See rule 26.
[30]Explanation omitted by the Finance Act, 1965, w.e.f. 1-4-1965.
[31]See Circular Nos. 2P(XXXIV-4), dated 16-5-1966; 2, dated 6-2-1969; 13, dated 14-4-1969; 519, dated 10-8-1988; 543, dated 31-8-1989; 579, dated 14-9-1990; 615, dated 22-11-1991; 630, dated 11-8-1992; 643, dated 22-1-1993; 655, dated 26-8-1993; 692, dated 15-11-1994; 735, dated 30-1-1996; 741, dated 18-4-1996; 745, dated 19-7-1996; 2/2002, dated 15-2-2002; 4/2004, dated 13-5-2004.
[32]See rules 29C, 30, 31, 31A, 36A, 37A and 37B and Form Nos. 15G, 16A, 26Q, 27A and 27Q.
[33]Inserted by the Finance Act, 2003, w.e.f. 1-6-2003.
[34]Substituted for "chargeable under the head 'Interest on securities'" by the Finance Act, 1988, w.e.f. 1-4-1989.
[35]Substituted by the Finance Act, 1989, w.e.f. 1-6-1989.
[36]The words "and super-tax" omitted by the Finance Act, 1965, w.e.f. 1-4-1965.
[37]Substituted by the Finance (No. 2) Act, 1965, w.e.f. 11-9-1965. Earlier, it was inserted by the Taxation Laws (Amendment) Act, 1962, w.e.f. 13-12-1962.
[38]The word "further" omitted by the Finance Act, 1992, w.e.f. 1-6-1992. It was inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991.
[39]Inserted by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1965, w.e.f. 4-12-1965.
[40]Inserted by the Finance Act, 1978, w.e.f. 1-4-1978.
[41]Inserted by the Finance Act, 1970, w.e.f. 1-4-1970.
[42]Substituted by the Finance Act, 1986, w.e.f. 1-6-1986. Clause (iib) was inserted by the Finance Act, 1970, w.e.f. 1-4-1970.
[43]Explanation omitted by the Finance Act, 1987, w.e.f. 1-4-1987. Earlier, the Explanation was substituted by the Finance Act, 1986, w.e.f. 1-6-1986.
[44]Substituted by the Finance Act, 1997, w.e.f. 1-6-1997. Clause (iv) was inserted by the Finance Act, 1966, w.e.f. 1-4-1966.
[45]Inserted by the Finance Act, 2007, w.e.f. 1-6-2007.
[46]Inserted by the Finance Act, 1984, w.e.f. 1-6-1984.
[47]Substituted for "one thousand rupees" by the Finance Act, 1989, w.e.f. 1-6-1989.
[48]Inserted by the Finance Act, 2002, w.e.f. 1-6-2002.
[49]Inserted by the Finance Act, 2008, w.e.f. 1-6-2008.
[50]Inserted by the Finance Act, 1989, w.e.f. 1-6-1989. Earlier, the Explanation, as inserted by the Finance Act, 1965, w.e.f. 1-4-1965, was omitted by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1967.
[51]The figure "1" omitted by the Finance Act, 1992, w.e.f. 1-6-1992. It was inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991.
[52]See Circular Nos. 14 (XXXVI-31), dated 4-7-1959; 23(LXXVI-33), dated 8-10-1959; P(XXI-16), dated 8-1-1965; 3P(XXI-19), dated 16-5-1966; 3D(XXI-20), dated 30-3-1967; 61, dated 19-6-1971 and 643, dated 22-1-1993 and Letter F. No. 1(54)-63/TPL, dated 18-5-1963.
[53]See rules 27, 29C, 30(1), 31, 31A, 36A, 37A and 37B and Form Nos. 15G, 16A, 26Q, 27A and 27Q.
[54]Inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991.
[55]The words "and super-tax" omitted by the Finance Act, 1965, w.e.f. 1-4-1965.
[56]Substituted by the Finance Act, 2002, w.e.f. 1-6-2002. Prior to the substitution, the first and
second provisos, as amended from time to time, read as under:
"Provided
that no such deduction shall be made in the case of a shareholder, being an
individual, of a company in which the public are substantially interested, if—
(a) the dividend is paid by such company by an account payee cheque; and
(b)
the amount of such dividend or, as the case may be, the aggregate of the
amounts of such dividend distributed or paid or likely to be distributed or
paid during the financial year by the company to the shareholder, does not
exceed two thousand five hundred rupees:
Provided
further that no such deduction shall be made in respect of any dividends
referred to in section 115-O."
Earlier, the first proviso was inserted by the Finance (No. 2) Act, 1977, w.e.f. 1-10-1977; substituted by the Finance Act, 1984, w.e.f. 1-6-1984 and amended by the Finance Act, 1987, w.e.f. 1-6-1987 and the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991. The second proviso, as originally enacted, was amended by the Finance Act, 1965, w.e.f. 1-4-1965; Finance (No. 2) Act, 1977, w.e.f. 1-10-1977 and the Direct Tax laws (Amendment) Act, 1987, w.e.f. 1-4-1988 and omitted by the Finance Act, 1993, w.e.f. 1-6-1993. It was again inserted by the Finance Act, 1997, w.e.f. 1-6-1997.
[57]Substituted for "one thousand" by the Finance Act, 2003, w.r.e.f. 1-8-2002.
[58]Inserted by the Finance Act, 2003, w.e.f. 1-4-2003.
[59]Inserted by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1967.
[60]See Circular Nos. 42, dated 20-6-1970; 43, dated 20-6-1970; 48, dated 7-11-1970; 65, dated 2-9-1971; 134, dated 16-5-1974; 256, dated 29-5-1979; 288, dated 22-12-1980; 526, dated 5-12-1988; 617, dated 22-11-91; 626, dated 12-2-1992; 643, dated 22-1-1993; 647, dated 22-3-1993; 715, dated 8-8-1995 and 716, dated 9-8-1995 and 780, dated 4-10-1999. Letter F. Nos. 22/68-ITB dated 28-3-1968 and 12/23-68-IT(B), dated 13-5-1968 as corrected by F. No. 12/23/68-IT(B), dated 7-11-1968; 12/12/68-IT(AII), dated 23-9-1968; 12/113/68-IT(AII), dated 28-10-1968.
[61]See rules 29C, 30, 31, 31A, 36A and 37B and Form Nos. 15G, 16A, 26Q and 27A.
[62]Substituted for 'chargeable under the head "Interest on securities"' by the Finance Act, 1988, w.e.f. 1-4-1989.
[63]Inserted by the Finance Act, 2002, w.e.f. 1-6-2002.
[64]Inserted by the Finance Act, 1987, w.e.f. 1-6-1987.
[65]Substituted by the Finance Act, 1975, w.e.f. 1-4-1975. Section 20(2) of the Amendment Act made a
special provision in regard to the amendment as under:
"(2) Notwithstanding the substitution of clause (i) of sub-section (3) of section 194A of the Income-tax Act by sub-section (1) of this section nothing in section 201 or section 276B of that Act shall apply to, or in relation to, any failure to deduct income-tax under sub-section (1) of the said section 194A on any income by way of interest other than income chargeable under the head "Interest on securities" credited or paid on or after the 1st day of April, 1975, but before the 1st day of June, 1975, where the income so credited or paid at any one time does not exceed four hundred rupees."
[66]Substituted for "does not exceed five thousand rupees" by the Finance Act, 2007, w.e.f. 1-6-2007. Earlier, the italicised words were substituted for "two thousand five hundred rupees" by the Finance Act, 2000, w.e.f. 1-6-2000, which was substituted for "one thousand rupees" by the Finance Act, 1987, w.e.f. 1-6-1987.
[67]Substituted for the proviso by the Finance (No. 2) Act, 1996, w.e.f. 1-10-1996. The proviso was inserted by the Finance Act, 1995, w.e.f. 1-7-1995.
[68]Inserted by the Finance Act, 2000, w.e.f. 1-4-2000.
[69]The words "and which is for the time being approved by the Central Government for the purpose of clause (viii) of sub-section (1) of section 36" omitted by the Finance Act, 1999, w.e.f. 1-4-2000.
[70]The words "the provisions of this clause shall have effect as if for the words "two thousand five hundred rupees", the words "ten thousand rupees" had been substituted and" omitted by the Finance Act, 2001, w.e.f. 1-6-2001.
[71]Inserted by the Finance Act, 1968, w.e.f. 1-4-1968.
[72]Inserted by the Finance Act, 1968, w.e.f. 1-4-1968. It was omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988 but was reintroduced by the Direct Tax Laws (Amendment) Act, 1989, with effect from the same date.
[74]Inserted by the Finance (No. 2) Act, 1971, w.e.f. 1-4-1971.
[75]Inserted by the Finance Act, 1970, w.e.f. 1-4-1970.
[77]Substituted by the Finance Act, 1995, w.e.f. 1-7-1995. Clause (vii) was substituted for clauses (vii) and (viia) by the Finance Act, 1992, w.e.f. 1-6-1992. Earlier, clause (vii) was inserted by the Finance Act, 1970, w.e.f. 1-4-1970 and was substituted by clauses (vii) and (viia) by the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991.
[78]Inserted by the Finance Act, 1975, w.e.f. 1-4-1975.
[79]Inserted by the Finance Act, 2003, w.e.f. 1-6-2003.
[80]Inserted by the Finance Act, 2005, w.e.f. 1-6-2005.
[81]Substituted by the Finance Act, 2005, w.e.f. 1-6-2005. Prior to the substitution, the Explanation,
as inserted by the Finance Act, 1995, w.e.f.
1-7-1995, read as under:
"Explanation.—For the purposes of clauses (i), (vii) and (viia), "time deposits" means deposits (excluding recurring deposits) repayable on the expiry of fixed periods."
[82]Prior to the omission, Explanation 2
read as under:
"Explanation 2.—For the purposes of clause (x), "infrastructure capital company" and "infrastructure capital fund" shall have the meanings respectively assigned to them in clauses (a) and (b) of Explanation 1 to clause (23G) of section 10."
[83]Inserted by the Finance Act, 1975, w.e.f. 1-4-1975.
[84]Inserted by the Finance Act, 1972, w.e.f. 1-4-1972.
[85]See rules 30, 31 and 36A and Form No. 16A.
[86]See Circular Nos. 94, dated 15-11-1972; 264, dated 11-2-1980; 515, dated 31-5-1988; 536, dated 6-7-1989; 569, dated 27-7-1990; 616, dated 22-11-1991 and 631, dated 20-8-1992.
[87]Inserted by the Finance Act, 2001, w.e.f. 1-6-2001.
[88]Substituted for "one thousand rupees" by the Finance Act, 1986, w.e.f. 1-6-1986.
[89]Inserted by the Finance Act, 1997, w.e.f. 1-6-1997.
[90]The word "further" omitted by the Finance Act, 1999, w.e.f. 1-4-2000.
[91]Inserted by the Finance Act, 1978, w.e.f. 1-4-1978.
[92]See rules 30, 31, 31A and 37B and Form Nos. 16A, 26Q and 27A.
[93]See Circular Nos. 241, dated 1-6-1978 and annual circulars referred to under section 194B.
[94]Substituted for "five thousand rupees" by the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991. Earlier, these words were substituted for "two thousand and five hundred rupees" by the Finance Act, 1986, w.e.f. 1-6-1986.
[95]Inserted by the Finance Act, 1972, w.e.f. 1-4-1972.
[96]See Circular Nos. 95, dated 15-11-1972; 114, dated 21-6-1973; 295, dated 6-3-1981; 433, dated 25-9-1985; 446, dated 31-12-1985; 487, dated 8-6-1987; 502, dated 27-1-1988; 505, dated 19-2-1988; 539, dated 13-7-1989; 558, dated 28-3-1990; 613, dated 14-11-1991; 632, dated 20-8-1992; 681, dated 8-3-1994; 713, dated 2-8-1995; 714, dated 3-8-1995; Circular No. 715, dated 8-8-1995; 716, dated 9-8-1995; 720, dated 30-8-1995; 723, dated 19-9-1995 and 13/2006, dated 13-12-2006.
[97]See rules 30, 31, 31A, 36A and 37B and Form Nos. 16A, 26Q and 27A.
[98]Substituted by the Finance Act, 2007, w.e.f. 1-6-2007. Prior to the substitution, sub-section
(1), as originally enacted and subsequently amended, read as under:
"(1)
Any person responsible for paying any sum to any resident (hereafter in this
section referred to as the contractor) for carrying out any work (including
supply of labour for carrying out any work) in
pursuance of a contract between the contractor and—
(a) the Central Government or any State Government; or
(b) any local authority; or
(c) any corporation established by or under a Central, State or
Provincial Act; or
(d) any company; 1[or]
2[(e)
any co-operative society;] 3[or
(f)
any authority, constituted in India by or under any law, engaged either for the
purpose of dealing with and satisfying the need for housing accommodation or
for the purpose of planning, develop-ment or
improvement of cities, towns and villages, or for both; or
(g) any society registered under the Societies Registration Act,
1860 (21 of 1860) or under any law corresponding to that Act in force in any
part of India; or
(h) any trust; or
(i) any University established or incorporated by or
under a Central, State or Provincial Act and an institution declared to be a
University under section 3 of the University Grants Commission Act, 1956 (3 of
1956) 4[; or]]
5[(j)
any firm,]
shall, at
the time of credit of such sum to the account of the contractor or at the time
of payment thereof in cash or by issue of a cheque or
draft or by any other mode, whichever is earlier, 6[deduct an amount equal to—
(i) one per cent in case of advertising,
(ii)
in any other case two per cent,
of such
sum as income-tax on income comprised therein."
1 Inserted
by the Finance Act, 1973, w.e.f. 1-4-1973.
2 Ibid.
3 Inserted
by the Finance Act, 1992, w.e.f. 1-6-1992.
4
Substituted for "," by the Finance Act, 1995, w.e.f.
1-7-1995.
5 Inserted,
ibid.
6 Substituted for "deduct an amount equal to two per cent of such sum as income-tax on income comprised therein" by the Finance Act, 1995, w.e.f. 1-7-1995.
[99]See Circular No. 681, dated 8-3-1994 withdrawing Circular Nos. 86, dated 29-5-1972; 93, dated 26-9-1972 and Para 11 of Circular No. 108, dated 20-3-1973.
[101]Inserted by the Finance Act, 2008, w.e.f. 1-6-2008.
[R102]Inserted by the Finance Act, 2002, w.e.f. 1-6-2002.
[R103]Inserted by the Finance Act, 1994, w.e.f. 1-6-1994.
[R104]Inserted by the Finance Act, 1988, w.e.f. 1-6-1988.
[R105]Inserted by the Finance Act, 1994, w.e.f. 1-6-1994.
[R106]Inserted by the Finance Act, 1995, w.e.f. 1-7-1995.
[R107]Substituted by the Finance (No. 2) Act, 2004
[R108]The word "or" omitted by the Finance Act, 2005, w.e.f. 1-6-2005.
[R109]Inserted by the Finance Act, 2005, w.e.f. 1-6-2005.
[R110]See rule 29D(1) and Form No. 15-I.
[R111]See rule 29D(3) and Form No. 15J.
[R112]Inserted by the Finance Act, 1973, w.e.f. 1-4-1973.
[R113]Ibid.
[R114]Inserted by the Finance Act, 2005, w.e.f. 1-6-2005.
[R115]Prior to the omission, sub-section (4) read as under:
[R116]Prior to the omission, sub-section (5) read as under:
[R117]Inserted by the Finance Act, 1973, w.e.f. 1-4-1973.
[R118]See rules 30, 31, 31A, 36A and 37B and Form Nos. 16A, 26Q and 27A.
[R119]See Circular Nos. 112, dated 31-5-1973; 120, dated 8-10-1973; 514, dated 31-5-1988; 540, dated 24-7-1989; 570, dated 27-7-1990; 614, dated 14-11-1991 and 633, dated 20-8-1992.
[R120]Inserted by the Finance Act, 1987, w.e.f. 1-6-1987.
[R121]Inserted by the Direct Tax Laws (Second Amendment) Act, 1989, w.e.f. 1-11-1989. Earlier, section 194E, as inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988, was omitted by the Direct Tax Laws (Amendment) Act, 1989, with effect from the same date.
[R122]See rules 30, 31, 31A, 36A, 37, 37A and 37B and Form Nos. 16A, 27A and 27Q.
[R123]Inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991.
[R124]See rules 29C, 30, 31, 31A, 36A and 37B and Form Nos. 15G, 16A, 26Q and 27A.
[R125]See Circular Nos. 618, dated 22-11-1991 and 631, dated 20-8-1992.
[R126]Inserted by the Finance Act, 1990, w.e.f. 1-4-1991.
[R127]See rules 30, 31, 31A, 36A and 37B and Form Nos. 16A, 26Q and 27A.
[R128]Inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991.
[R129]See rules 30, 31, 31A, 36A and 37B and Form Nos. 16A, 26Q and 27A. See also Circular No. 616, dated 21-11-1991.
[R130]Inserted by the Finance Act, 1992, w.e.f. 1-6-1992.
[R131]Prior to the omission, sub-sections (2) and
(3), as inserted by the Finance Act, 1992, w.e.f.
1-6-1992, read as under:
"(2)
Where the Assessing Officer is satisfied that the total income of any person
who is or has been stocking, distributing, purchasing or selling lottery
tickets justifies the deduction of income-tax at any lower rate or no deduction
of income-tax, as the case may be, the Assessing Officer shall, on an
application1 made by such person in this behalf, give to him such certificate
as may be appropriate.
(3) Where
any such certificate is given, the person responsible for paying the income referred
to in sub-section (1) shall, until such certificate is cancelled by the
Assessing Officer, deduct income-tax at the rates specified in such certificate
or deduct no tax, as the case may be."
1 See rule 28(4) and Form No. 13D.
[R132]Inserted by the Finance Act, 2001, w.e.f. 1-6-2001. Earlier section 194H, dealing with the same matter, was inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991 but discontinued by the Finance Act, 1992, w.e.f. 1-6-1992, though the provision was removed from the statute book only by the Finance Act, 1999, w.e.f. 1-4-2000.
[R133]See rules 28, 28AA, 30, 31, 31A and 36A and Form Nos. 13, 16A, 26A, 26Q and 27A.
[R134]Substituted for "five" by the Finance Act, 2007, w.e.f. 1-6-2007, which was substituted for "ten" by the Finance Act, 2002, w.e.f. 1-6-2002.
[R135]Inserted by the Finance Act, 2002, w.e.f. 1-6-2002.
[R136]Inserted by the Finance Act, 2007, w.e.f. 1-6-2007.
[R137]Inserted by the Finance Act, 1994, w.e.f. 1-6-1994.
[R138]See rules 28, 28AA, 30, 31, 31A, 36A, 37B and Form Nos. 16A, 26Q and 27A. See also Circular No. 699, dated 30-1-1995; 715, dated 8-8-1995; 718, dated 22-8-1995; 735, dated 30-1-1996; 736, dated 13-2-1996; 5/2001, dated 2-3-2001; 5/2002, dated 30-7-2002 and 1/2008, dated 10-1-2008.
[R139]Substituted for "to any person" by the Finance Act, 2003, w.e.f. 1-6-2003.
[R140]Substituted for "deduct income-tax thereon at the rate of twenty per cent" by the Finance Act, 1995, w.e.f. 1-7-1995.
[R141]Substituted by the Finance Act, 2007, w.e.f. 1-6-2007. Prior to the substitution, clauses (a)
and (b) read as under:
"(a)
fifteen per cent if the payee is an individual or a Hindu undivided family; and
(b) twenty per cent in other cases:"
[R142]Inserted by the Finance Act, 2002, w.e.f. 1-6-2002.
[R143]Substituted by the Taxation Laws
(Amendment) Act, 2006, w.e.f. 13-7-2006. Prior to
substitution, clause (i), as originally
enacted, read as under:
"(i) "rent" means any payment, by whatever name called, under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of any land or any building (including factory building), together with furniture, fittings and the land appurtenant thereto, whether or not such building is owned by the payee;"
[R144]Inserted by the Finance Act, 1995, w.e.f. 1-7-1995.
[R145]See Circular Nos. 714, dated 3-8-1995; 715, dated 8-8-1995; 716, dated 9-8-1995; 720, dated 30-8-1995 and 726, dated 18-10-1995.
[R146]See rules 30, 31, 31A, 36A and 37B and Form Nos. 16A, 26Q and 27A.
[R147]Inserted by the Taxation Laws (Amendment) Act, 2006, w.e.f. 13-7-2006.
[R148]Inserted by the Taxation Laws (Amendment) Act, 2006, w.e.f. 13-7-2006.
[R149]Substituted for "five" by the Finance Act, 2007, w.e.f. 1-6-2007.
[R150]Substituted for "five" by the Finance Act, 2007, w.e.f. 1-6-2007.
[R151]Inserted by the Taxation Laws (Amendment) Act, 2006, w.e.f. 13-7-2006.
[R152]Inserted by the Finance Act, 2002, w.e.f. 1-6-2002.
[R153]Inserted by the Finance Act, 2003, w.e.f. 1-6-2003.
[R154]Prior to the omission, sub-sections (2) and
(3), as originally enacted, read as under:
"(2)
Where the Assessing Officer is satisfied that the total income of any person in
receipt of the sum referred to in sub-section (1) justifies the deduction of
income-tax at any lower rate or no deduction of income-tax, as the case may be,
the Assessing Officer shall, on an application1 made by that person in this
behalf, give to him such certificate as may be appropriate.
(3) Where
any such certificate is given, the person responsible for paying the sum
referred to in sub-section (1) shall, until such certificate is cancelled by the Assessing Officer,
deduct income-tax at the rates specified in such certificate or deduct no tax,
as the case may be.
1 See rule 28(5) and Form No. 13E.
[R155]Inserted by the Taxation Laws (Amendment) Act, 2006, w.e.f. 13-7-2006.
[R156]Substituted by the Finance Act, 2002, w.e.f. 1-6-2002. Prior to the substitution, section 194K,
as inserted by the Finance Act, 1995, w.e.f.
1-7-1995, read as under:
"194K.
Income in respect of units.—(1) Where any income is payable to a resident
in respect of units of a Mutual Fund specified under clause (23D) of section 10
or of the Unit Trust of India the person responsible for making the payment
shall, at the time of credit of such income to the account of the payee or at
the time of payment thereof in cash or by issue of a cheque
or draft or by any other mode, whichever is earlier, deduct income-tax thereon
at the rate of,—
(a)
twenty per cent, if the payee is a company, and
(b)
fifteen per cent in the case of other payees:
1[Provided
that no deduction shall be made under this sub-section from any such income
credited or paid on or after the 1st day of June, 1999.]
(2) The
provisions of sub-section (1) shall not apply—
(i) where the amount of such income or, as the case
may be, the aggregate of the amounts of such income credited or paid or likely
to be credited or paid during the financial year by the person responsible for
making the payment to the account of, or to, the payee does not exceed ten
thousand rupees:
Provided
that the amount of ten thousand rupees shall be computed with reference to the
income credited or paid,—
(a) in respect of a branch office of the Mutual Fund or of the
Unit Trust of India, as the case may be, and
(b) under a particular scheme under which the units have been
issued;
(ii)
to such income credited or paid before the 1st day of
July, 1995;
(iii)
to such income credited or paid in respect of units issued under such scheme
already in operation of the Mutual Fund or of the Unit Trust of India, as the
Central Government may, by notification2 in the Official Gazette, specify in
this behalf having regard to the plan of payment of income there under to the
unit-holders; and
(iv)
to such income credited or paid in respect of units issued under any scheme of
the Unit Trust of India to any institution or fund where such income is not
liable to inclusion in its total income under the provisions of sections 11 and
12 or clause (22) or clause (22A) or clause (23) or clause (23AA) or clause
(23C) of section 10.
Explanation.—For the purposes of this section,—
(a)
"Unit Trust of India" means the Unit Trust of India established under
the Unit Trust of India Act, 1963 (52 of 1963);
(b)
where any income as aforesaid is credited to any account, whether called
"Suspense account" or by any other name, in the books of account of
the person liable to pay such income, such crediting shall be deemed to be
credit of such income to the account of the payee and the provisions of this
section shall apply accordingly."
1 Inserted
by the Finance Act, 1999, w.e.f. 1-6-1999.
2 See Notification Nos. 9846, dated 23-8-1995; 9882, dated 28-9-1995 and 10029, dated 21-3-1996.
[R157]See Circular Nos. 715, dated 8-8-1995 and 716, dated 9-8-1995.
[R158]See rules 28, 29C, 30, 31, 36A and 37B and Form Nos. 13, 15G, 16A and 27A.
[R159]Substituted for "one thousand" by the Finance Act, 2003, w.r.e.f. 1-8-2002.
[R160]Inserted by the Finance Act, 2003, w.e.f. 1-4-2003.
[R161]Inserted by the Finance Act, 1999, w.e.f. 1-6-1999.
[R162]See rule 28, 28AA and Form No. 13.
[R163]Inserted by the Finance Act, 2000, w.e.f. 1-6-2000.
[R164]Inserted by the Finance (No. 2) Act, 2004, w.e.f. 1-10-2004.
[R165]See rules 28, 28AA, 30, 31, 31A, 36A, 37 and Form Nos. 13, 16A, 26, 26Q and 27A.
[R166]See Circular Nos. 20(II-4), dated 3-8-1961; 152, dated 27-11-1974; 155, dated 21-12-1974; 370, dated 3-10-1983; 588, dated 2-1-1991; 695, dated 28-11-1994; 715, dated 8-8-1995; 723, dated 19-9-1995, 740, dated 17-4-1996; 759, dated 18-11-1997; 767, dated 22-5-1998; 769, dated 6-8-1998; 786, dated 7-2-2000; 4/2004, dated 13-5-2004 and Letter F. No. 391/3/78-FTD, dated 9-7-1984. See also Circular No. 790, dated 13-4-2000 and 10/2002, dated 9-10-2002, reproduced at the end in Appendix 1.
[R167]See rules 26, 30, 31, 31A, 36A, 37A and 37B and Form Nos. 16A, 27A and 27Q. See also Circular Nos. 695, dated 28-11-1994; 759, dated 18-11-1997; 769, dated 6-8-1998; 790, dated 20-4-2000, since superseded; 10/2002, dated 9-10-2002 and 7/2007, dated 23-10-2007, reproduced at the end in Appendix 1, post.
[R168]Substituted by the Finance Act, 1987, w.e.f. 1-6-1987. Earlier, sub-section (1) was amended by the Finance Act, 1965, w.e.f. 1-4-1965 and the Finance Act, 1975, w.e.f. 1-4-1975.
[R169]The words "(not being interest on securities)" omitted by the Finance Act, 2003, w.e.f. 1-6-2003.
[R170]The words "or dividends" omitted by the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991.
[R171]Inserted by the Direct Tax Laws (Second Amendment) Act, 1989, w.r.e.f. 1-6-1987.
[R172]Inserted by the Finance Act, 2003, w.e.f. 1-4-2003. Earlier, the second proviso, couched in the same words, was inserted by the Finance Act, 1997, w.e.f. 1-6-1997 and omitted by the Finance Act, 2002, w.e.f. 1-6-2002.
[R173]Substituted for "(other than interest on securities and salary)" by the Finance Act, 2003, w.e.f. 1-6-2003. It was also omitted by the Finance Act, 1976, w.e.f. 1-6-1976 and the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991.
[R174]See Circular No. 695, dated 28-11-1994, streamlining the procedure for obtaining authorisation, reproduced in Appendix 1, post.
[R175]Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R176]Substituted for "in the prescribed manner" by the Finance Act, 1988, w.r.e.f. 1-3-1988. Earlier, these words were substituted for "by general or special order" by the Finance Act, 1987, w.e.f. 1-6-1987.
[R177]Inserted by the Finance Act, 1970, w.e.f. 1-4-1970.
[R178]Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988
[R179]Ibid.
[R180]See rule 29B and Form Nos. 15C and 15D.
[R181]Inserted by the Finance Act, 2008, w.e.f. 1-4-2008.
[R182]Inserted by the Finance Act, 1987, w.e.f. 1-6-1987.
[R183]Inserted by the Finance Act, 1987, w.e.f. 1-6-1987.
[R184]Substituted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. Earlier, it was substituted by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1967.
[R185]Substituted by the Finance Act, 1995, w.e.f. 1-7-1995. Section 196A was inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988; substituted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989 and amended by the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991 and the Finance Act, 1994, w.e.f. 1-6-1994.
[R186]See rules 30, 31, 36A, 37A and 37B and Form Nos. 16A, 27A and 27Q.
[R187]Inserted by the Finance Act, 2003, w.e.f. 1-4-2003. Earlier, the proviso, in similar words, was inserted by the Finance Act, 1999 and omitted by the Finance Act, 2002, w.e.f. 1-6-2002
[R188]Now see section 2(m), Foreign Exchange Management Act, 1999. For the provision.
[R189]Inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991.
[R190]See rules 30, 31, 31A, 36A, 37A and 37B and Form Nos. 16A, 27A and 27Q.
[R191]Substituted for "Where any income is payable in respect of units referred to in section 115AB to an Off-shore Fund" by the Finance Act, 1993, w.e.f. 1-6-1993.
[R192]Inserted by the Finance Act, 1992, w.e.f. 1-6-1992.
[R193]See rules 30, 31, 31A, 36A, 37A and 37B and Form Nos. 16A, 27A and 27Q.
[R194]Substituted for "Where any income by way of interest or dividends is payable in respect of bonds or shares referred to in section 115AC to a non-resident" by the Finance Act, 1993, w.e.f. 1-6-1993.
[R195]Substituted for "shares" by the Finance Act, 2001, w.e.f. 1-4-2002.
[R196]Substituted for "shares" by the Finance Act, 2001, w.e.f. 1-4-2002.
[R197]Inserted by the Finance Act, 2003, w.e.f. 1-4-2003. Earlier, the proviso, couched in the same words, was inserted by the Finance Act, 1997, w.e.f. 1-6-1997 and omitted by the Finance Act, 2002, w.e.f. 1-6-2002.
[R198]Inserted by the Finance Act, 1993, w.e.f. 1-6-1993.
[R199]See rules 30, 31, 31A, 36A, 37A and 37B and Form Nos. 16A, 27A and 27Q.
[R200]Inserted by the Finance Act, 2003, w.e.f. 1-4-2003. Earlier, the proviso, couched in the same words, was inserted by the Finance Act, 1997, w.e.f. 1-6-1997 and omitted by the Finance Act, 2002, w.e.f. 1-6-2002.
[R201]See Letters F. No. 1(54)-63-TPL, dated 18-5-1963 and 20/23/67-IT(A), dated 28-7-1967 and Instruction No. 555, dated 11-6-1973. See also Circular No. 716, dated 9-8-1995 and 774, dated 17-3-1999.
[R202]Inserted by the Finance Act, 1987, w.e.f. 1-6-1987. See also rules 28(1) and Form No. 13.
[R203]Substituted for "where, in the case of
any income of any person other than a company,—
(a)
income-tax is required to be deducted at the time of credit or, as the case may
be, at the time of payment at the rates in force under the provisions of
sections 192, 193, 194A, 194D and 195,
(b) being a non-resident, income-tax is required to be deducted at
the time of payment at the rates in force under the provisions of section 194,
the
Assessing Officer is satisfied" by the Finance Act, 1992, w.e.f. 1-6-1992.
Earlier,
the substituted words were amended by the Finance Act, 1965, w.e.f 1-4-1965; Finance (No. 2) Act, 1967, w.e.f. 1-4-1967; Finance Act, 1972, w.e.f.
1-4-1972; Finance Act, 1973, w.e.f. 1-4-1973; Finance
Act, 1978, w.e.f. 1-4-1978; Finance Act, 1986, w.e.f. 1-4-1987 and the Direct Tax Laws (Amendment) Act,
1987, w.e.f. 1-4-1988.
[R204]Inserted by the Finance Act, 2003, w.e.f. 1-6-2003.
[R205]Inserted by the Finance Act, 1993, w.e.f. 1-6-1993.
[R206]Substituted for "194A, 194D, 194H, 194-I, 194K, 194L" by the Finance Act, 2003, w.e.f. 1-6-2003. Earlier, the reference to section 194H was inserted by the Finance Act, 2001, w.e.f. 1-6-2001; section 194-I by Finance Act, 1994, w.e.f. 1-6-1994; 194K by Finance Act, 1995, w.e.f. 1-7-1995 and 194L by Finance Act, 1999, w.e.f. 1-6-1999.
[R207]Inserted by the Finance (No. 2) Act, 2004, w.e.f. 1-10-2004.
[R208]The words "or the total world income" omitted by the Finance Act, 1965, w.e.f. 1-4-1965.
[R209]The words "or super-tax" omitted by the Finance Act, 1965, w.e.f. 1-4-1965.
[R210]Ibid.
[R211]Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R212]See rule 28 and Form No. 13. See also rule 28AB.
[R213]See rules 28AA and 29.
[R214]Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R215]The words "and super-tax" omitted by the Finance Act, 1965, w.e.f. 1-4-1965.
[R216]Inserted by the Finance Act, 1987, w.e.f. 1-6-1987.
[R217]Inserted by the Finance Act, 1982, w.e.f. 1-6-1982.
[R218]See Circular No. 351, dated 26-11-1982.
[R219]The words "section 193 or" omitted by the Finance Act, 1999, w.e.f. 1-6-1999.
[R220]The words "or section 194A" omitted by the Finance Act, 1992, w.e.f. 1-6-1992.
[R221]Inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991.
[R222]The words "section 193 or" omitted by the Finance Act, 1999, w.e.f. 1-6-1999.
[R223]Substituted for "or, as the case may be, section 194A" by the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991.
[R224]Substituted for "or, as the case may be, section 194A" by the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991.
[R225]The words "or section 194A" omitted by the Finance Act, 1992, w.e.f. 1-6-1992.
[R226]See also rule 29C and Form No. 15G.
[R227]Substituted for "his estimated total income of the previous year in which such income is to be included in computing his total income will be less than the minimum liable to income-tax" by the Finance Act, 1990, w.e.f. 1-4-1990.
[R228]Substituted by the Finance Act, 1995, w.e.f. 1-7-1995. Prior to the substitution, sub-section
(1A), as inserted by the Finance Act, 1992, w.e.f.
1-6-1992, read as under:
"(1A) Notwithstanding anything contained in section 194A, no deduction of tax shall be made under that section in the case of a person (not being a company or a firm), if such person furnishes to the person responsible for paying any income of the nature referred to in that section, a declaration in writing in duplicate in the prescribed form and verified in the prescribed manner to the effect that the tax on his estimated total income of the previous year in which such income is to be included in computing his total income will be nil."
[R229]Substituted for "either" by the Finance Act, 1999, w.e.f. 1-6-1999.
[R230]Inserted by the Finance Act, 1999, w.e.f. 1-6-1999.
[R231]See rule 29C(1) and Form No. 15G.
[R232]Inserted by the Finance Act, 2002, w.e.f. 1-6-2002.
[R233]See Circular No. 4/2002, dated 16-7-2002.
[R234]Inserted by the Finance Act, 2003, w.e.f. 1-6-2003.
[R235]The words "and is entitled to a deduction from the amount of income-tax on his total income referred to in section 88B" omitted by the Finance Act, 2007, w.r.e.f. 1-4-2006.
[R236]See rule 29C(1A) and Form No. 15H.
[R237]Inserted by the Special Economic Zones Act, 2005, w.e.f. 10-2-2006.
[R239]Inserted by the Finance Act, 1992, w.e.f. 1-6-1992.
[R240]Inserted by the Finance Act, 2003, w.e.f. 1-6-2003.
[R241]Substituted for "Commissioner" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R242]Inserted by the Finance Act, 1992, w.e.f. 1-6-1992.
[R243]Inserted by the Finance Act, 2003, w.e.f. 1-6-2003.
[R244]Substituted for "sections 192 to 194, section 194A, section 194B, section 194BB, section 194C, section 194D, section 194E, section 194EE, section 194F, section 194G, section 194H, section 194-I, section 194J, section 194K, section 194L, section 195, section 196A, section 196B, section 196C and section 196D" by the Finance (No. 2) Act, 2004, w.e.f. 1-10-2004. The substituted words were amended by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1967; Finance Act, 1972, w.e.f. 1-4-1972; Finance Act, 1973, w.e.f. 1-4-1973; Finance Act, 1978, w.e.f. 1-4-1978; Direct Tax Laws (Second Amendment) Act, 1989, w.e.f. 1-11-1989; Finance (No. 2) Act, 1991, w.e.f. 1-10-1991; Finance Act, 1992, w.e.f. 1-6-1992; Finance Act, 1993, w.e.f. 1-6-1993; Finance Act, 1994, w.e.f. 1-6-1994; Finance Act, 1995, w.e.f. 1-7-1995; Finance Act, 1999, w.e.f. 1-6-1999.
[R245]Inserted by the Finance Act, 2002, w.e.f. 1-6-2002.
[R246]Substituted by the Finance Act, 2008, w.e.f. 1-4-2008. Prior to the substitution,
section 199, as originally enacted and amended from time to time, read as
under:
"199.
Credit for tax deducted1.—2[(1)] Any deduction made in accordance with 3[the
foregoing provisions of this Chapter] and paid to the Central Government shall
be treated as a payment of 4[tax] on behalf of the person from whose income the
deduction was made, or of the owner of the security 5[, or depositor or owner
of property or of unit-holder] or of the shareholder, as the case may be, and
credit shall be given to him for the amount so deducted on the production of
the certificate furnished under section 203 in the assessment 6[* * *] 7[made
under this Act for the assessment year for which such income is assessable]:
8[Provided
that—
(i) in a case where such person or owner 9[or depositor or
unit-holder] or shareholder is a person, whose income is included under the
provisions of section 60, section 61, section 64, section 93 or section 94 in
the total income of another person, the payment shall be deemed to have been
made on behalf of, and the credit shall be given to, such other person;
(ii) in any other case, where the dividend on any share is
assessable as the income of a person other than the shareholder, the payment
shall be deemed to have been made on behalf of, and the credit shall be given
to, such other person in such circumstances as may be prescribed:
10[Provided
further that where any property, deposit, security, unit or share is owned
jointly by two or more persons not constituting a partnership, the payment
shall be deemed to have been made on behalf of, and credit shall be given to,
each such person in the same proportion in which rent, interest on deposit or
on security or income in respect of unit or dividend on share is assessable as
his income.]]
11[(2) Any
sum referred to in sub-section (1A) of section 192 and paid to the Central
Government shall be treated as the tax paid on behalf of the person in respect
of whose income, such payment of tax has been made and credit shall be given to
him for the amount so paid on production of the certificate furnished under
section 203 in the assessment under this Act for the assessment year for which
such income is assessable.]
12[(3)
Where any deduction is made in accordance with the foregoing provisions of this
Chapter on or after the 1st day of April, 13[2008] and paid to the Central
Government, the amount of tax deducted and specified in the statement referred
to in section 203AA shall be treated as tax paid on behalf of the persons
referred to in sub-section (1) or, as the case may be, sub-section (2) and
credit shall be given to him for the amount so deducted in the assessment made
under this Act for the assessment year for which such income is assessable
without the production of certificate."
1 See Circular
No. 3D(XXI-20), dated 30-3-1967.
2
Re-numbered by the Finance Act, 2002, w.e.f.
1-6-2002.
3
Substituted for "the provisions of sections 192 to 194, section 194A,
section 194B, section 194BB, section 194C, section 194D, section 194E, section
194EE, section 194F, section 194G, section 194H, section 194-I, section 194J,
section 194K, section 194L, section 195, section 196A, section 196B, section
196C and section 196D" by the Finance (No. 2) Act, 2004, w.e.f. 1-10-2004. The substituted words were amended by the
Finance (No. 2) Act, 1967, w.e.f. 1-4-1967; Finance
Act, 1972, w.e.f. 1-4-1972; Finance Act, 1973, w.e.f. 1-4-1973; Finance Act, 1978, w.e.f.
1-4-1978; Direct Tax Laws (Second Amendment) Act, 1989, w.e.f.
1-11-1989; Finance (No. 2) Act, 1991, w.e.f.
1-10-1991; Finance Act, 1992, w.e.f. 1-6-1992;
Finance Act, 1993, w.e.f. 1-6-1993; Finance Act,
1994, w.e.f. 1-6-1994; Finance Act, 1995, w.e.f. 1-7-1995; Finance Act, 1999, w.e.f.
1-6-1999
4
Substituted for "income-tax or super-tax, as the case may be," by the
Finance Act, 1965, w.e.f. 1-4-1965.
5 Inserted
by the Finance (No. 2) Act, 1996, w.e.f. 1-4-1997.
6 The words
"(including a provisional assessment under section 141A), if any"
omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f.
1-4-1989. Earlier, the italicised words were inserted
by the Finance Act, 1968, w.e.f. 1-4-1968.
7
Substituted for "made for the immediately following assessment year under
this Act" by the Finance Act, 1987, w.e.f.
1-6-1987.
8 Substituted
by the Finance Act, 1968, w.r.e.f. 1-4-1962.
9 Inserted
by the Finance (No. 2) Act, 1996, w.e.f. 1-4-1997.
10
Substituted by the Finance (No. 2) Act, 1996, w.e.f.
1-4-1997.
11 Inserted
by the Finance Act, 2002, w.e.f. 1-6-2002.
12 Inserted
by the Finance (No. 2) Act, 2004, w.e.f. 1-4-2005.
13 Substituted for "2006" by the Finance Act, 2006, w.e.f. 1-4-2006, which was substituted for "2005" by the Finance Act, 2005, w.e.f. 1-4-2005.
[R247]Re-numbered by the Finance Act, 2002, w.e.f. 1-6-2002.
[R248]See rule 30.
[R249]Substituted for "the provisions of sections 192 to 194, section 194A, section 194B, section 194BB, section 194C, section 194D, section 194E, section 194EE, section 194F, section 194G, section 194H, section 194-I, section 194J, section 194K, section 194L, section 195, section 196A, section 196B, section 196C and section 196D" by the Finance (No. 2) Act, 2004, w.e.f. 1-10-2004. The substituted words were amended by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1967; Finance Act, 1972, w.e.f. 1-4-1972; Finance Act, 1973, w.e.f. 1-4-1973; Finance Act, 1978, w.e.f. 1-4-1978; Direct Tax Laws (Second Amendment) Act, 1989, w.e.f. 1-11-1989; Finance (No. 2) Act, 1991, w.e.f. 1-10-1991; Finance Act, 1992, w.e.f. 1-6-1992; Finance Act, 1993, w.e.f. 1-6-1993; Finance Act, 1994, w.e.f. 1-6-1994; Finance Act, 1995, w.e.f. 1-7-1995; Finance Act, 1999, w.e.f. 1-6-1999.
[R250]Inserted by the Finance Act, 2002, w.e.f. 1-6-2002.
[R251]Inserted by the Finance (No. 2) Act, 2004, w.e.f. 1-4-2005.
[R252]See rule 31A and Form Nos. 24Q and 26Q.
[R253]See Board's Letter F. No. 237/4/75-A&PAC, dated 23-11-1976; Circular Nos. 685, dated 20-6-1994; 686, dated 12-8-1994; and 696, dated 16-12-1994.
[R254]Substituted by the Finance Act, 2008, w.r.e.f. 1-6-2002. Prior to the
substitution, sub-section (1) read as under:
"(1)
If any such person 1[referred to in section 200] and in the cases referred to
in section 194, the principal officer and the company of which he is the
principal officer does not deduct 2[the whole or any part of the tax] or after
deducting fails to pay the tax as required by or under this Act, he or it
shall, without prejudice to any other consequences which he or it may incur, be
deemed to be an assessee in default in respect of the tax:
Provided
that no penalty shall be charged under section 221 from such person, principal
officer or company unless the 3[Assessing] Officer is satisfied that such
person or principal officer or company, as the case may be, has 4[without good
and sufficient reasons] failed to deduct and pay the tax."
1 Inserted
by the Finance Act, 2002, w.e.f. 1-6-2002.
2 Inserted
by the Finance Act, 2001, w.r.e.f. 1-4-1962.
3
Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act,
1987, w.e.f. 1-4-1988.
4 Substituted for "wilfully" by the Finance Act, 1966, w.e.f. 1-4-1966.
[R255]Inserted by the Finance Act, 1966, w.e.f. 1-4-1966. See also rule 119A.
[R256]Inserted by the Finance Act, 2001, w.r.e.f. 1-4-1962.
[R257]Substituted for "twelve per cent per annum" by the Finance Act, 2007, w.e.f. 1-4-2008. Earlier, "twelve" was substituted for "fifteen" by the Taxation Laws (Amendment) Act, 2003, w.e.f. 8-9-2003; "fifteen" was substituted for "eighteen" by the Finance Act, 2001, w.e.f. 1-6-2001; "eighteen" was substituted for "fifteen" by the Finance Act, 1999, w.e.f. 1-6-1999; "fifteen" was substituted for "twelve" by the Taxation Laws (Amendment) Act, 1984, w.e.f. 1-10-1984. Section 84 of the 1984 Amendment Act had clarified that the increase in the rate of interest will apply in respect of any period falling after 30-9-1984, also in those cases where the interest became chargeable or payable from an earlier date. Earlier, "twelve" was substituted for "nine" by the Finance Act, 1972, w.e.f. 1-4-1972 which was substituted for "six" by the Taxation Laws (Amendment) Act, 1967, w.e.f. 1-10-1967.
[R258]Inserted by the Finance Act, 2006, w.e.f. 1-6-2006.
[R259]Substituted for "it" by the Finance Act, 1966, w.e.f. 1-4-1966.
[R260]Substituted for "levy" by the Finance Act, 1987, w.e.f. 1-6-1987.
[R261]Substituted for "sections 192 to 194, section 194A, section 194B, section 194BB, section 194C, section 194D, section 194E, section 194EE, section 194F, section 194G, section 194H, section 194-I, section 194J, section 194K, section 194L, section 195, section 196A, section 196B, section 196C and section 196D" by the Finance (No. 2) Act, 2004, w.e.f. 1-10-2004. The substituted words were amended by Finance (No. 2) Act, 1967, w.e.f. 1-4-1967; Finance Act, 1972, w.e.f. 1-4-1972; Finance Act, 1973, w.e.f. 1-4-1973; Finance Act, 1978, w.e.f. 1-4-1978; Direct Tax Laws (Second Amendment) Act, 1989, w.e.f. 1-11-1989; Finance (No. 2) Act, 1991, w.e.f. 1-10-1991; Finance Act, 1992, w.e.f. 1-6-1992; Finance Act, 1993, w.e.f. 1-6-1993; Finance Act, 1994, w.e.f. 1-6-1994; Finance Act, 1995, w.e.f. 1-7-1995; Finance Act, 1999, w.e.f. 1-6-1999.
[R263]. See rule 31 and Form Nos. 16 and 16A.
[R264] Substituted for "the provisions of sections 192 to 194, section 194A, section 194B, section 194BB, section 194C, section 194D, section 194E, section 194EE, section 194F, section 194G, section 194H, section 194-I, section 194J, section 194K, section 194L, section 195, section 196A, section 196B, section 196C and section 196D" by the Finance (No. 2) Act, 2004, w.e.f. 1-10-2004. The substituted words were amended by Finance Act, 1972, w.e.f. 1-4-1972; Finance Act, 1973, w.e.f. 1-4-1973; Finance Act, 1978, w.e.f. 1-4-1978; Direct Tax Laws (Second Amendment) Act, 1989, w.e.f. 1-11-1989; Finance (No. 2) Act, 1991, w.e.f. 1-10-1991; Finance Act, 1992, w.e.f. 1-6-1992; Finance Act, 1993, w.e.f. 1-6-1993; Finance Act, 1994, w.e.f. 1-6-1994; Finance Act, 1995, w.e.f. 1-7-1995; Finance Act, 1999, w.e.f. 1-6-1999.
[R265] Substituted for "shall, at the time of credit of payment of the sum, or, as the case may be, at the time of issue of a cheque or warrant for payment of any dividend to a shareholder" by the Finance Act, 1987, w.e.f. 1-6-1987.
[R266]Inserted by the Finance Act, 2002, w.e.f. 1-6-2002.
[R267]Inserted by the Finance (No. 2) Act, 2004, w.e.f. 1-4-2005.
[R268]Substituted for "2008" by the Finance Act, 2008, w.e.f. 1-4-2008, which was earlier substituted for "2006" by the Finance Act, 2006, w.e.f. 1-4-2006 and for "2005" by the Finance Act, 2005, w.e.f. 1-4-2005.
[R269]Substituted by the Finance (No. 2) Act,
2004, w.e.f. 1-10-2004. Prior to the substitution,
section 203A, as inserted by the Finance Act, 1987, w.e.f.
1-6-1987, read as under:
"203A.
Tax-deduction account number.—(1) Every person deducting tax in accor-dance with the provisions of sections 192 to 194,
section 194A, section 194B, section 194BB, section 194C, section 194D, section
194E, section 194EE, section 194F, section 194G, section 194H, section 194-I,
section 194J, section 194K, section 194L, section 195, section 196A, section
196B, section 196C and section 196D, if he has not been allotted any
tax-deduction account number, shall within such time as may be prescribed,
apply to the Assessing Officer for the allotment of a tax-deduction account
number.
(2) Where a
tax-deduction account number has been allotted to a person, such person shall
quote such number,—
(a) in all challans for the payment of
any sum in accordance with the provisions of section 200;
(b) in all certificates issued in accordance with the provisions
of section 203;
(c) in all the returns delivered in accordance with the
provisions of sections 206, 206A and 206B to any income-tax authority; and
(d) in all other documents pertaining to such transactions as
may be prescribed in the interests of revenue."
Earlier, section 203A was amended by Finance Act, 1987, w.e.f. 1-6-1987; Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988; Direct Tax Laws (Second Amendment) Act, 1989, w.e.f. 1-11-1989; Finance (No. 2) Act, 1991, w.e.f. 1-10-1991; Finance Act, 1992, w.e.f. 1-6-1992; Finance Act, 1993, w.e.f. 1-6-1993; Finance Act, 1994, w.e.f. 1-6-1994; Finance Act, 1995, w.e.f. 1-7-1995; Finance Act, 1999, w.e.f. 1-6-1999.
[R270]See Circular No. 497, dated 9-10-1987.
[R271]See rule 114A and Form No. 49B
[R272]Inserted by the Finance Act, 2006, w.e.f. 1-6-2006.
[R273]Inserted by the Finance (No. 2) Act, 2004, w.e.f. 1-4-2005.
[R274]Substituted for "2005" by the Finance Act, 2006, w.e.f. 1-4-2006.
[R275]See rule 31AB and Form No. 26AS.
[R276]Substituted for "sections 192 to 194, section 194A, section 194B, section 194BB, section 194C, section 194D, section 194E, section 194EE, section 194F, section 194G, section 194H,section 194-I, section 194J, section 194K, section 194L, sections 195 to 203" by the Finance (No. 2) Act, 2004, w.e.f. 1-10-2004. The substituted words were amended by Finance (No. 2) Act, 1967, w.e.f. 1-4-1967; Finance Act, 1972, w.e.f. 1-4-1972; Finance Act, 1973, w.e.f. 1-4-1973; Finance Act, 1978, w.e.f. 1-4-1978; Direct Tax Laws (Second Amendment) Act, 1989, w.e.f. 1-11-1989; Finance (No. 2) Act, 1991, w.e.f. 1-10-1991; Finance Act, 1994, w.e.f. 1-6-1994; Finance Act, 1995, w.e.f. 1-7-1995; Finance Act, 1999, w.e.f. 1-6-1999.
[R277]Section 285 has since been omitted by the Finance Act, 1987, w.e.f. 1-6-1987.
[R278]Inserted by the Finance Act, 1986, w.e.f. 1-6-1986.
[R279]Substituted for "in the case of payments" by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1967.
[R280]Inserted by the Finance Act, 1986, w.e.f. 1-6-1986.
[R282]Substituted for "sections 192 to 194, section 194A, section 194B, section 194BB, section 194C, section 194D, section 194E, section 194EE, section 194F, section 194G, section 194H, section 194-I, section 194J, section 194K, section 194L, section 195, section 196A, section 196B, section 196C and section 196D" by the Finance (No. 2) Act, 2004, w.e.f. 1-10-2004. The substituted words were amended by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1967; Finance Act, 1972, w.e.f. 1-4-1972; Finance Act, 1973, w.e.f. 1-4-1973; Finance Act, 1978, w.e.f. 1-4-1978; Direct Tax Laws (Second Amendment) Act, 1989, w.e.f. 1-11-1989; Finance (No. 2) Act, 1991, w.e.f. 1-10-1991; Finance Act, 1992, w.e.f. 1-6-1992; Finance Act, 1993, w.e.f. 1-6-1993; Finance Act, 1994, w.e.f. 1-6-1994; Finance Act, 1995, w.e.f. 1-7-1995; Finance Act, 1999, w.e.f. 1-6-1999.
[R283]Substituted by the Finance Act, 1987, w.e.f. 1-6-1987. Earlier, section 206 was amended by the Finance Act, 1965, w.e.f. 1-4-1965.
[R284]Renumbered as "(1)" by the Finance Act, 1997, w.e.f. 1-4-1997.
[R285]See rules 36, 36A, 37, 37A and 37B Form Nos. 24, 26, 27 and 27A. See also Circular Nos. 719, dated 22-8-1995; 744, dated 6-5-1996; 797, dated 10-10-2000 and 8/2003, dated 19-9-2003.
[R286] Inserted by the Finance Act, 2006, w.e.f. 1-4-2006.
[R287]Substituted for "shall prepare, within the prescribed time after the end of each financial year, and deliver or cause to be delivered", by the Finance (No. 2) Act, 1991, w.e.f. 27-9-1991.
[R288]Inserted by the Finance (No. 2) Act, 2004, w.e.f. 1-10-2004.
[R289]Inserted by the Finance (No. 2) Act, 2004, w.e.f. 1-10-2004.
[R291]Sub-sections (2) to (4) substituted for
sub-sections (2) and (3) by the Finance Act, 2003, w.e.f.
1-6-2003. Sub-sections (2) and (3), as inserted by the Finance Act, 1997, w.e.f. 1-4-1997, read as under:
"(2)
Notwithstanding anything contained in any other law for the time being in force,
a return filed on a floppy, diskette, magnetic cartridge tape, CD-ROM or any
other computer readable media as may be specified by the Board (hereinafter
referred to as the computer media) shall be deemed to be a return for the
purposes of this section and the rules made there under and shall be admissible
in any proceedings there under, without further proof of production of the
original, as evidence of any contents of the original or of any fact stated
therein.
(3) A
return filed under sub-section (2) shall fulfill the following conditions,
namely:—
(a)
while receiving returns on computer media, necessary checks by scanning the
documents filed on computer media will be carried out and the media will be
duly authenticated by the Assessing Officer; and
(b) the Assessing Officer shall also take due care to preserve the computer media by duplicating, transferring, mastering or storage without loss of data."
[R292]Substituted for "other than the principal officer in the case of every company" by the Finance (No. 2) Act, 2004, w.e.f. 1-4-2005
[R293]See rule 37B and Form No. 27A.
[R295]Substituted by the Finance (No. 2) Act,
2004, w.e.f. 1-4-2005. Prior to the substitution, the
proviso read as under:
"Provided that the principal officer shall, in the case of every company responsible for deducting tax under the foregoing provisions of this Chapter, deliver or cause to be delivered, within the prescribed time after the end of each financial year, such returns on computer media under the said scheme."
[R296]Inserted by the Finance Act, 1988, w.e.f. 1-6-1988.
[R297]See Circular Nos. 525, dated 24-11-1988; 535, dated 26-6-1989; 565, dated 11-7-1990; 585, dated 27-11-1990; 620, dated 6-12-1991; 634, dated 20-8-1992 and 660, dated 15-9-1993.
[298]See rules 31AC and 31ACA and Form No. 26QA and 26QAA.
[299]Inserted by the Finance Act, 1988, w.e.f. 1-6-1988.
[300]See Circular Nos. 525, dated 24-11-1988; 535, dated 26-6-1989; 565, dated 11-7-1990; 585, dated 27-11-1990; 620, dated 6-12-1991; 634, dated 20-8-1992 and 660, dated 15-9-1993.
[R301]Substituted by the Finance Act, 1992, w.e.f. 1-4-1992. It was also amended by the Direct Tax Laws (Amendment) Act, 1989, w.r.e.f. 1-6-1988. See rules 37CA and 37D and Form No. 27D.
[R302]Substituted by the Taxation Laws
(Amendment) Act, 2003, w.e.f. 8-9-2003. Prior to the substitution,
the Table, as substituted by the Finance Act, 2003, w.e.f.
1-6-2003, read as under:
"Table
|
Sl. No. |
Nature
of Goods |
Percentage |
|
(i) |
Alcoholic
liquor for human consumption and tendu leaves |
Ten
per cent |
|
(ii) |
Timber
obtained under a forest lease |
Fifteen
per cent |
|
(iii) |
Timber
obtained by any mode other than under a forest lease |
Five
per cent |
|
(iv) |
Any
other forest produce not being timber or tendu
leaves |
Fifteen
per cent |
|
(v) |
Scrap |
Ten
per cent: |
Earlier,
the Table was substituted by the Finance Act, 1992, w.e.f.
1-4-1992 and the Finance (No. 2) Act, 1996, w.e.f.
1-10-1996.
[R303]Substituted by the Taxation Laws
(Amendment) Act, 2003, w.e.f. 8-9-2003. Prior to the
substitution, the proviso, as substituted by the Finance Act, 1992, w.e.f. 1-4-1992, read as under:
"Provided
that where the Assessing Officer, on an application made by the buyer, gives a
certificate in the prescribed form that to the best of his belief any of the
goods referred to in the aforesaid Table are to be utilised
for the purposes of manufacturing, processing or producing articles or things
and not for trading purposes, the provisions of this sub-section shall not
apply so long as the certificate is in force."
6 8-9-2003.
[R305]Inserted by the Taxation Laws (Amendment) Act, 2003, w.e.f. 8-9-2003.
[R306]Rule 37C and Form No. 27C.
[R307]Inserted by the Finance (No. 2) Act, 2004, w.e.f. 1-10-2004. See rules 37CA and 37D and Form No. 27D.
[R308]Inserted by the Finance Act, 2007, w.e.f. 1-6-2007.
[R309]Inserted by the Finance (No. 2) Act, 2004, w.e.f. 1-10-2004.
[R310]Inserted by the Finance (No. 2) Act, 2004, w.e.f. 1-10-2004.
[R311]Substituted for "seven days" by the Taxation Laws (Amendment) Act, 2003, w.e.f. 8-9-2003.
[R312]Inserted by the Finance (No. 2) Act, 2004, w.e.f. 1-4-2005.
[R313]See rule 31AA and Form No. 27EQ and 27B.
[R314] Substituted by the Finance Act, 2008, w.e.f. 1-4-2008. Prior to the
substitution, sub-section (4) read as under:
"(4)
Any amount collected in accordance with the provisions of this section and paid
under sub-section (3) shall be deemed as payment of tax on behalf of the person
from whom the amount has been collected and credit shall be given to him for
the amount so collected on the production of the certificate furnished under
sub-section (5) in the assessment made under this Act for the assessment year
for which such income is assessable:
1[Provided
that where any amount is collected in accordance with the provisions of this
section on or after the 1st day of April, 2[2008] and paid under sub-section
(3) to the credit of the Central Government, the amount of tax collected and
specified in the statement referred to in the second proviso to sub-section (5)
shall be deemed as payment of tax on behalf of the person from whom the amount
has been collected and credit shall be given to him for the amount so collected
in the assessment made under this Act for the assessment year for which such
income is assessable without the production of certificate.]"
1 Inserted
by the Finance (No. 2) Act, 2004, w.e.f. 1-4-2005.
2
Substituted for "2006" by the Finance Act, 2006, w.e.f.
1-4-2006 which was substituted for "2005" by the Finance Act, 2005, w.e.f. 1-4-2005.
[R315]Substituted for "ten days from the
date of debit" by the Taxation Laws (Amendment) Act, 2003, w.e.f. 8-9-2003.
[R317]See rule 37D and Form No. 27D.
[R319]Substituted for "2008" by the
Finance Act, 2008, w.e.f.
1-4-2008, which was earlier substituted for "2006" by the
Finance Act, 2006, w.e.f. 1-4-2006 and for
"2005" by the Finance Act, 2005, w.e.f.
1-4-2005.
[R320]Inserted by the Finance Act, 2006, w.r.e.f. 1-4-2005.
[R321]See rule 31AB and Form No. 26AS.
[R323]Inserted by the Finance Act, 2006, w.e.f. 1-4-2006.
[R324]Substituted for "prepare half-yearly
returns for the period ending on 30th September and 31st March in each
financial year" by the Finance (No. 2) Act, 2004, w.e.f.
1-10-2004.
[R325]See rule 37F.
[R330]Substituted by the Finance (No. 2) Act,
2004, w.e.f. 1-4-2005. Prior to the substitution,
sub-sections (5B) and (5C), as inserted by the Finance Act, 1999, w.e.f. 1-6-1999, read as under:
"(5B)
Notwithstanding anything contained in any other law for the time being in
force, a return filed on a floppy, diskette, magnetic cartridge tape, CD-ROM or
any other computer readable media as may be specified by the Board (hereinafter
referred to as the computer media) shall be deemed to be a return for the
purposes of sub-section (5A) and the rules made thereunder
and shall be admissible in any proceedings thereunder,
without further proof of production of the original, as evidence of any
contents of the original or of any fact stated therein.
(5C) A
return filed under sub-section (5B) shall fulfil the
following conditions, namely:—
(a)
while receiving returns on computer media, necessary checks by scanning the
documents filed on computer media will be carried out and the media will be
duly authenticated by the Assessing Officer; and
(b) the Assessing Officer shall also take due care to preserve
the computer media by duplicating, transferring, mastering or storage without
loss of data."
[R331]See rule 37EA and Form No. 27B.
[R332]Inserted by the Finance Act, 2006, w.e.f. 1-4-2007.
[R333]Substituted for "seller" by the Finance Act, 2006, w.e.f. 1-4-2007.
[R334]Substituted for "one and one-fourth per cent" by the Taxation Laws (Amendment) Act, 2003, w.e.f. 8-9-2003, which was substituted for "two per cent" by the Finance Act, 2001, w.e.f. 1-6-2001.
[R335]Inserted by the Finance Act, 2006, w.e.f. 1-6-2006.
[R336]Substituted for "seller" by the Finance Act, 2006, w.e.f. 1-4-2007.
[R337]Inserted by the Finance Act, 1999, w.e.f. 1-6-1999.
[R338]Inserted by the Finance (No. 2) Act, 2004, w.e.f. 1-10-2004.
[R339]Inserted by the Finance (No. 2) Act, 2004, w.e.f. 1-10-2004.
[R340]See rule 37G and Form No. 13.
[R341]Inserted by the Finance (No. 2) Act, 2004, w.e.f. 1-10-2004.
[R342]See rule 37H.
[R343]Inserted by the Finance (No. 2) Act, 2004, w.e.f. 1-10-2004.
[R344]Inserted by the Finance Act, 1992, w.e.f. 1-4-1992.
[R345]Substituted by the Taxation Laws
(Amendment) Act, 2003, w.e.f. 8-9-2003. Prior to the
substitution, sub-clauses (i) and (ii),
as substituted by the Finance Act, 2003, w.e.f.
1-6-2003, read as under:
"(i) a public sector company, or
(ii) a buyer in the retail sale of such goods obtained
in pursuance of such sale;"
Earlier,
clauses (i) to (iii), as inserted by
the Finance Act, 1992, w.e.f. 1-4-1992, read as
under:
"(i) a public sector company,
(ii)
a buyer in the further sale of such goods obtained in
pursuance of such sale, or
(iii)
a buyer where the goods are not obtained by him by way
of auction and where the sale price of such goods to be sold by the buyer is
fixed by or under any State Act;"
[R346]Clauses (b) and (c)
substituted by the Finance Act, 2003, w.e.f.
1-6-2003. Prior to the substitution, clause (b), as inserted by the
Finance Act, 1992, w.e.f. 1-4-1992, read as under:
"(b) "seller" means the Central Government, a State
Government or any local authority or corporation or authority established by or
under a Central, State or Provincial Act, or any company or firm or
co-operative society."
[R347]Inserted by the Finance Act, 2002, w.e.f. 1-6-2002.
[R348]See rule 114AA and Form No. 49B.
[R349]Inserted by the Finance (No. 2) Act, 2004, w.e.f. 1-10-2004.
[R350]Substituted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. Earlier, section 207(1) was substituted by the Finance Act, 1972, w.e.f. 1-4-1972.
[R351]Substituted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. Earlier, section 208 was substituted by the Finance Act, 1969, w.e.f. 1-4-1969 and amended by the Finance Act, 1972, w.e.f. 1-4-1972; Finance (No. 2) Act, 1977, w.e.f. 1-9-1977; Finance Act, 1978, w.e.f. 1-6-1978; Finance Act, 1979, w.e.f. 1-4-1979; Finance (No. 2) Act, 1980, w.e.f. 1-9-1980; Finance Act, 1981, w.e.f. 1-6-1981; Taxation Laws (Amendment) Act, 1984, w.e.f. 2-4-1985 and the Finance Act, 1985, w.e.f. 24-5-1985.
[R352]Substituted for "one thousand five hundred" by the Finance (No. 2) Act, 1996, w.e.f. 1-10-1996.
[R353]Substituted by the Direct Tax Laws (Amendment)
Act, 1987, w.e.f. 1-4-1988. Prior to the
substitution, sub-section (1) was amended by the Finance Act, 1963, w.e.f. 1-4-1963; Finance Act, 1964, w.r.e.f.
1-4-1963; Direct Taxes (Amendment) Act, 1964, w.e.f.
6-10-1964; Finance Act, 1965, w.e.f. 1-4-1965;
Finance (No. 2) Act, 1967, w.e.f. 1-4-1967; Finance
Act, 1969, w.e.f. 1-4-1969, Taxation Laws (Amendment)
Act, 1970, w.e.f. 1-4-1971, Finance Act, 1972; w.e.f. 1-4-1972; Finance Act, 1973, w.e.f.
1-4-1973; Finance Act, 1974, w.e.f. 1-4-1974 and the
Finance Act, 1978, w.e.f. 1-6-1978.
[R354]Inserted by the Direct Tax Laws (Amendment) Act, 1989, w.r.e.f. 1-6-1988.
[R355]Inserted by the Finance Act, 1974, w.e.f. 1-4-1974.
[R356]Substituted for "where the assessee sends a statement under sub-section (1) of section 209A or where the Income-tax Officer makes an order under sub-section (1) or sub-section (3) of section 210" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. Earlier, the italicised words were inserted by the Finance Act, 1978, w.e.f. 1-6-1978.
[R357]Substituted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R358]Substituted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. Earlier, clause (b) was amended by the Finance Act, 1978, w.e.f. 1-6-1978.
[R359]Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R360]Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R361]Substituted for "on the basis of which tax has been paid by the Hindu undivided family under section 140A" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R362]Substituted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. Prior to the substitution, section 210 was amended by the Finance Act, 1963, w.e.f. 1-4-1963; Direct Taxes (Amendment) Act, 1964, w.e.f. 6-10-1964; Finance Act, 1969, w.e.f. 1-4-1969 and the Taxation Laws (Amendment) Act, 1970, w.e.f. 1-4-1971.
[R363]The words "and who has not paid any advance tax under sub-section (1)" omitted by the Finance Act, 2002, w.e.f. 1-6-2002.
[R364]See rule 39 and Form No. 28A.
[R365]1 Substituted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. Prior to the substitution, section 211 was amended by the Finance Act, 1969, w.e.f. 1-4-1969; Finance Act, 1972, w.e.f. 1-4-1972 and the Finance Act, 1978, w.e.f. 1-6-1978
[R366]Substituted by the Finance Act, 1994, w.e.f. 1-4-1994. Sub-section (1), as originally enacted, was amended by the Finance Act, 1992, w.e.f. 1-4-1992.
[R367]Sections 214, 215, 216 and 217 have ceased to apply from 1 April, 1989: see section 214(3).
[R368]See Circular No. 12/12/68-ITA(A-III), dated 11-12-1968; Letters F. No. 12/80/64-IT(B), dated 1-6-1965; 400/59/75-ITCC, dated 10-10-1975; Ministry of Law's opinions vide para 2.368 of PAC's 51st Report (5th Lok Sabha), pp. 125-26 and para 1.26 (Appendix) of PAC's 100th Report (7th Lok Sabha), pp. 21-24
[R369]See rule 119A.
[R370]Substituted for "twelve" by the
Taxation Laws (Amendment) Act, 1984, w.e.f.
1-10-1984. Section 84 of the Amendment Act has clarified that the increase in
the rate of interest will apply in respect of any period falling after
30-9-1984, also in those cases where the interest became chargeable or payable
from an earlier date. Earlier, "twelve" was substituted for
"nine" by the Finance Act, 1972, w.e.f.
1-4-1972; "nine" was substituted for "six" by the Taxation
Laws (Amendment) Act, 1967, w.e.f. 1-10-1967 and
"six" was substituted for "four" by the Finance Act, 1965, w.e.f. 1-4-1965.
[R371]Substituted for "tax determined on regular assessment" by the Taxation Laws (Amendment) Act, 1984, w.e.f. 1-4-1985
[R372]Inserted by the Finance Act, 1968, w.e.f. 1-4-1968.
[R373]Substituted by the Taxation Laws (Amendment) Act, 1984, w.e.f. 1-4-1985. Sub-section (1A) was inserted by the Finance Act, 1968, w.e.f. 1-4-1968.
[R374]Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.
[R376]Inserted, ibid, w.e.f. 1-4-1989.
[R378]Sections 214, 215, 216 and 217 have ceased to apply from 1 April, 1989: see section 214(3).
[R379]See 103(3)/64, dated 1-9-1964 and 12/66-IT(B), dated 6-6-1965. Circular Nos. 3(II-8)D, dated 22-1-1966; 400/40/73-ITCC, dated 19-10-1973 and 492, dated 21-7-1987.
[R380]Substituted by the Finance Act, 1969, w.e.f. 1-4-1970.
[R381]See rules 40 and 119A.
[R382]Substituted for "advance tax under section 212 on the basis of his own estimate" by the Finance Act, 1978, w.e.f. 1-6-1978.
[R383]Substituted for "twelve" by the Taxation Laws (Amendment) Act, 1984, w.e.f. 1-10-1984. Section 84 of the Amendment Act has clarified that the increase in the rate of interest will apply in respect of any period falling after 30-9-1984, also in those cases where the interest became chargeable or payable from an earlier date. Earlier, "twelve" was substituted for "nine" by the Finance Act, 1972, w.e.f. 1-4-1972 which was substituted for "six" by the Taxation Laws (Amendment) Act, 1967, w.e.f. 1-10-1967.
[R384]Inserted by the Finance (No. 2) Act, 1980, w.e.f. 1-9-1980.
[R385]Substituted by the Taxation Laws (Amendment) Act, 1970, w.e.f. 1-4-1971. Earlier, sub-section (2) substituted by the Finance Act, 1963, w.e.f. 1-4-1963 and amended by the Finance Act, 1969, w.e.f. 1-4-1970.
[R386] Substituted by the Taxation Laws (Amendment) Act, 1984, w.e.f. 1-4-1985.
[R387]Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.
[R388]Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R389]Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R390]Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R391]Inserted by the Finance Act, 1969, w.e.f. 1-4-1970.
[R392]Inserted by the Finance Act, 1972, w.e.f. 1-4-1972.
[R393]Inserted by the Finance Act, 1973, w.e.f. 1-4-1973.
[R395]Inserted by the Taxation Laws (Amendment) Act, 1984, w.e.f. 1-4-1985.
[R396]Sections 214, 215, 216 and 217 have ceased to apply from 1 April, 1989: see section 214(3).
[R397]See rule 40. See also Board's Letter F. No. 400/58-ITCC, dated 29-2-1980.
[R398]Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R399]Substituted by the Finance Act, 1969, w.e.f. 1-4-1970.
[R400]Substituted for "sub-section (1) or sub-section (2) or sub-section (3) or sub-section (3A) of section 212" by the Finance Act, 1978, w.e.f. 1-6-1978.
[R401]Substituted for "twelve" by the Taxation Laws (Amendment) Act, 1984, w.e.f. 1-10-1984. Section 84 of the Amendment Act has clarified that the increase in the rate of interest will apply in respect of any period falling after 30-9-1984, also in those cases where the interest became chargeable or payable from an earlier date. Earlier, "twelve" was substituted for "nine" by the Finance Act, 1972, w.e.f. 1-4-1972 which was substituted for "six" by the Taxation Laws (Amendment) Act, 1967, w.e.f. 1-10-1967.
[R402]Sections 214, 215, 216 and 217 have ceased to apply from 1 April, 1989: see section 214(3).
[R403]See rules 40 and 119A. See also Circular No. 492, dated 21-7-1987.
[R404]Substituted by the Finance Act, 1969, w.e.f. 1-4-1970.
[R405]Substituted for "the Income-tax Officer finds that any such person as is referred to in sub-section (3) of section 212 has not sent the estimate referred to therein" by the Finance Act, 1978, w.e.f. 1-6-1978.
[R406]Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R407]Substituted for "twelve" by the Taxation Laws (Amendment) Act, 1984, w.e.f. 1-10-1984. Section 84 of the Amendment Act has clarified that the increase in the rate of interest will apply in respect of any period falling after 30-9-1984, also in those cases where the interest became chargeable or payable from an earlier date. Earlier, "twelve" was substituted for "nine" by the Finance Act, 1972, w.e.f. 1-4-1972 which was substituted for "six" by the Taxation Laws (Amendment) Act, 1967, w.e.f. 1-10-1967.
[R408]Substituted for "sub-section" by the Finance Act, 1978, w.e.f. 1-6-1978.
[R409]Inserted by the Finance Act, 1969, w.e.f. 1-4-1970.
[R410]Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R411]Inserted by the Finance Act, 1978, w.e.f. 1-6-1978.
[R412]Substituted for "twelve" by the
Taxation Laws (Amendment) Act, 1984, w.e.f.
1-10-1984. Section 84 of the Amendment Act has clarified that the increase in
the rate of interest will apply in respect of any period falling after
30-9-1984, also in those cases where the interest became chargeable or payable
from an earlier date. Earlier, "twelve" was substituted for
"nine" by the Finance Act, 1972, w.e.f.
1-4-1972 which was substituted for "six" by the Taxation Laws
(Amendment) Act, 1967, w.e.f. 1-10-1967.
[R413]Substituted for "sub-section" by the Finance Act, 1978, w.e.f. 1-6-1978.
[R414]Substituted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. Prior to the substitution, section 218 was substituted by the Finance Act, 1978, w.e.f. 1-6-1978 and amended by the Finance Act, 1979, w.e.f. 1-4-1979.
[R415]See Circular No. 25, dated 25-7-1969; 119, dated 26-9-1973; 251, dated 29-1-1979; 334, dated 3-4-1982; 530, dated 6-3-1989 as amended by Circular No. 589 dated 16-1-1991; Letters F. No. 1/6/69-ITCC, dated 21-8-1969; 404/132/70-ITCC, dated 14-9-1970; 404/272-72-ITCC, dated 30-8-1973; PIB Press Note, dated 13-6-1988 and Ministry of Finance's note vide Para 1.21 of PAC's 217th Report (7th Lok Sabha), pp. 93-96.
[R416]Substituted for "thirty-five" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.
[R417]Substituted for "Income-tax", ibid, w.e.f. 1-4-1988.
[R418]Substituted for "thirty-five", ibid, w.e.f. 1-4-1989.
[R419]Substituted for "Deputy" by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998, which was earlier substituted for "Inspecting Assistant" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R420]Substituted for "thirty-five" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.
[R421]See rule 119A.
[R422]Substituted for "fifteen per cent per annum from the day commencing after the end of the period mentioned in sub-section (1)" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.
[R423]Substituted for "one and one-fourth per cent" by the Taxation Laws (Amendment) Act, 2003, w.e.f. 8-9-2003, which was substituted for "one and one-half per cent" by the Finance Act, 2001, w.e.f. 1-6-2001.
[R424]Inserted by the Finance Act, 1963, w.r.e.f. 1-4-1962.
[R425]Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.
[R426]Ibid
[R427]Inserted by the Taxation Law (Amendment) Act, 1984, w.e.f. 1-10-1984.
[R428]Substituted for "the Board may" by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 1-4-1987.
[R429]Substituted for "Commissioner" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R430]Inserted by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.r.e.f. 1-10-1984.
[R431]Substituted for ", on the recommendation made by the Commissioner in this behalf, it is satisfied", ibid, w.e.f. 1-4-1987.
[R432]Inserted, ibid, w.r.e.f. 1-10-1984.
[R433]Ibid.
[R434] Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R435]Inserted by the Finance Act, 2000, w.e.f. 1-6-2000.
[R436]Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R437]Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R438]See Circular Nos. 696, dated 16-12-1994; 686, dated 12-8-1994; 685, dated 20-6-1994; 262, dated 14-9-1979 and Letter F. No. 16/87/67-IT(B), dated 10-7-1967.
[R439]Substituted by the Taxation Laws (Amendment) Act, 1970, w.e.f. 1-4-1971.
[R440]Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R441]Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R442]Substituted by the Taxation Laws (Amendment
& Miscellaneous Provisions) Act, 1986, w.e.f.
10-9-1986. Prior to the substitution, the second proviso substituted as a part
of sub-section (1) by the Taxation Laws (Amendment) Act, 1970, read as under:
"Provided further that where the Income-tax Officer is satisfied that the default was for good and sufficient reasons, no penalty shall be levied under this section."
[R443]Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R444]Inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-10-1975.
[R445]See Board's Instruction Nos. 1520, dated 23-9-1983; 1578, dated 13-9-1984; 1642, dated 29-7-1985; 1644, dated 30-7-1985; 1673, dated 6-12-1985.
[R446]Substituted for "When an assessee is in default or is deemed to be in default in making a payment of tax, the Assessing Officer may forward to the Tax Recovery Officer a certificate under his signature specifying the amount of arrears due from the assessee, and the Tax Recovery Officer on receipt of such certificate, shall proceed to recover from such assessee the amount specified therein by one or more of the modes mentioned below, in accordance with the rules laid down in the Second Schedule—" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. The italicised word was substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1989, w.r.e.f. 1-4-1988.
[R447]See rule 117B and Form No. 57.
[R448]Inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-10-1975.
[R449]Substituted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. It was also amended by the Direct Tax Laws (Amendment) Act, 1989, w.r.e.f. 1-4-1988.
[R450]Substituted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. Earlier, it was amended by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-10-1975 and Direct Tax Laws (Amendment) Act, 1989, w.r.e.f. 1-4-1988.
[R451]See rule 117B and Form No. 57.
[R452]Substituted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. Prior to the substitution, section 224, was amended by the Direct Tax Laws (Amendment) Act, 1989, w.r.e.f. 1-4-1988.
[R453]Substituted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. Prior to the substitution, section 225 was amended by the Direct Tax Laws (Amendment) Act, 1989, w.r.e.f. 1-4-1988.
[R454]Substituted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. Earlier, sub-section (1) was amended by the Direct Tax Laws (Amendment) Act, 1989, w.r.e.f. 1-4-1988.
[R455]Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1989, w.r.e.f. 1-4-1988.
[R456]Inserted, ibid, w.e.f. 1-4-1989.
[R457]Substituted for "Income-tax", ibid, w.r.e.f. 1-4-1988.
[R458]Inserted, ibid, w.e.f. 1-4-1989.
[R459]Substituted for "Income-tax", ibid, w.r.e.f. 1-4-1988.
[R460]Inserted, ibid, w.e.f. 1-4-1989.
[R461]Substituted for "Income-tax", ibid, w.r.e.f. 1-4-1988.
[R462]Inserted, ibid, w.e.f. 1-4-1989.
[R463]Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1989, w.r.e.f. 1-4-1988.
Inserted, ibid, w.e.f. 1-4-1989. [R464]
[R465]Substituted for "Income-tax", ibid, w.r.e.f. 1-4-1988.
[R467]Substituted for "Income-tax", ibid, w.r.e.f. 1-4-1988.
[R468]Inserted, ibid, w.e.f. 1-4-1989.
[R469]Substituted for "Income-tax", ibid, w.r.e.f. 1-4-1988.
[R470]Inserted, ibid, w.e.f. 1-4-1989.
[R471]Substituted for "Income-tax", ibid, w.r.e.f. 1-4-1988.
[R472]Inserted, ibid, w.e.f. 1-4-1989.
[R473]Substituted for "Income-tax", ibid, w.r.e.f. 1-4-1988.
[R474]Inserted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.
[R475]Substituted for "Income-tax", ibid, w.r.e.f. 1-4-1988.
[R476]Inserted, ibid, w.e.f. 1-4-1989.
[R477]Substituted by the Finance Act, 1965, w.e.f. 1-4-1965.
[R478]Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1989, w.r.e.f. 1-4-1988.
[R479]Inserted, ibid, w.e.f. 1-4-1989.
[R480]Substituted for "Commissioner" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R482]Inserted by the Finance Act, 1972, w.e.f. 1-4-1972.
[R483]Substituted for "specified in a certificate received from an Assessing Officer" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. The italicised word was substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1989, w.r.e.f. 1-4-1988.
[R484]Substituted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. It was amended by the Direct Tax Laws (Amendment) Act, 1989, w.r.e.f. 1-4-1988.
[R485]See Circular No. 149, dated 18-11-1974 and Ministry of Finance's note vide Para 1.42 of PAC's 57th Report (7th LokSabha), pages 42 to 43.
[R486]See Circular No. 31(LXVI-10), dated 15-11-1960; 546, dated 4-10-1989; 787, dated 10-2-2000; 2/2004, dated 10-2-2004 and Letter F. No. 485/3/72-FTD, dated 15-5-1973 and F. No. 153/191/2002, dated 13-2-2003.
[R487]Sub-sections (1) and (1A) substituted for
sub-section (1) by the Finance Act, 2003, w.e.f.
1-6-2003. Prior to the substitution, sub-section (1), as originally enacted,
read as under:
"(1)
Subject to such exceptions as the Central Government may, by notification in
the Official Gazette, specify in this behalf, 1[no person—
(a) who is not domiciled in India; or
(b) who is domiciled in India at the time of his departure, but—
(i) intends to leave India
as an emigrant; or
(ii)
intends to proceed to another country on a work permit
with the object of taking up any employment or other occupation in that
country; or
(iii)
in respect of whom circumstances exist which, in the
opinion of an income-tax authority, render it necessary for him to obtain a
certificate under this section,
shall leave
the territory of India] by land, sea or air unless he first obtains from such
authority as may be appointed2 by the Central Government in this behalf
(hereinafter in this section referred to as the "competent
authority") a certificate stating that he has no liabilities under this
Act, the Excess Profits Tax Act, 1940 (15 of 1940), the Business Profits Tax
Act, 1947 (21 of 1947), the Indian Income-tax Act, 1922 (11 of 1922), the
Wealth-tax Act, 1957 (27 of 1957), the Expenditure-tax Act, 1957 (29 of 1957)
or the Gift-tax Act, 1958 (18 of 1958), or that satisfactory arrangements have
been made for the payment of all or any of such taxes which are or may become
payable by that person:
Provided
that in the case of a person not domiciled in India the competent authority
may, if it is satisfied that such person intends to return to India, issue an
exemption certificate either in respect of a single journey or in respect of
all journeys to be undertaken by that person within such period as may be
specified in the certificate."
1
Substituted for "no person who is not domiciled in India, or who, even if
domiciled in India at the time of his departure, has, in the opinion of an
income-tax authority, no intention of returning to India, shall leave the
territory of India" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.
2 For a list of officers appointed as competent authority, see Notification No. SRO, dated 22-5-1953.
[R489]Chief Commissioner or Director General, as the case may be, having jurisdiction.
[R490]See rule 43 and Form Nos. 30A and 30C.
[R491]See rule 43(2) and Form No. 30B.
[R492]See rule 43(4) and Form No. 31.
[R493]Chief Commissioner having jurisdiction.
[R494]See rule 43(5) and Form No. 33.
[R495]Inserted by the Taxation Laws (Amendment) Act, 2003, w.r.e.f. 1-6-2003.
[R496]Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R497]See rules 42, 43 and 44 and Form Nos. 30A, 30B, 30C, 31 and 33.
[R498]Prior to the omission, section 230A read as
under:
"230A.
Restrictions on registration of transfers of immovable property in certain
cases1.—(1) Notwithstanding anything contained in any other law for the time
being in force, where any document required to be registered under the
provisions of clause (a) to clause (e) of sub-section (1) of section 17 of the
Indian Registration Act, 1908 (16 of 1908), purports to transfer, assign,
limit, or extinguish the right, title or interest of any person to or in any
property 2[* * *] valued at more than 3[five lakh]
rupees, no registering officer appointed under that Act shall register any such
document, unless the 4[Assessing] Officer certifies that—
(a) such
person has either paid or made satisfactory provision for payment of all
existing liabilities under this Act, the Excess Profits Tax Act, 1940 (15 of
1940), the Business Profits Tax Act, 1947 (21 of 1947), the Indian Income-tax
Act, 1922 (11 of 1922), the Wealth-tax Act, 1957 (27 of 1957), the Expenditure
Tax Act, 1957 (29 of 1957), 5[the Gift-tax Act, 1958 (18 of 1958), the Super
Profits Tax Act, 1963 (14 of 1963), and the Companies (Profits) Surtax Act,
1964 (7 of 1964)], or
(b) the registration of the document will not prejudicially
affect the recovery of any existing liability under any of the aforesaid Acts.
6(2) The
application for the certificate required under sub-section (1) shall be made by
the person referred to in that sub-section and shall be in such form and shall
contain such particulars as may be prescribed.
7[(3) The provisions of
sub-section (1) shall not apply in a case where the person referred to in that
sub-section is any such institution, association or body, or belongs to any
such class of institutions, associations or bodies, as the Board may, for
reasons to be recorded in writing, notify in this behalf8 in the Official
Gazette.]"
1 See Circular
No. 191, dated 4-3-1976; Letter F. No. 328/72/71-WT, dated 26-2-1973 and F. No.
358/4/91-IT(B), dated 10-12-1992.
2 The words
"(other than agricultural land)" omitted by the Finance (No. 2) Act,
1971, w.e.f. 1-10-1971.
3
Substituted for "two lakh" by the Finance
Act, 1995, w.e.f. 1-7-1995. Earlier, the words
"two lakh" were substituted for "fifty
thousand" by the Finance Act, 1988, w.e.f.
1-4-1988.
4
Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act,
1987, w.e.f. 1-4-1988.
5
Substituted for "and the Gift-tax Act, 1958 (18 of 1958)" by the
Finance (No. 2) Act, 1971, w.e.f. 1-10-1971.
6 See rules
44A and 44B and Form No. 34A.
7 Inserted by the Finance (No. 2) Act, 1971, w.e.f. 1-10-1971.
[R499]Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R500]Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.
[R501]Ibid.
[R502]See Circular No. 783, dated 18-11-1999.
[R503]Substituted for "one and one-fourth per cent" by the Taxation Laws (Amendment) Act, 2003, w.e.f. 8-9-2003. Earlier, "one and one-fourth per cent" was substituted for "one and one-half per cent" by the Finance Act, 2001, w.e.f. 1-6-2001, which was substituted for "two per cent" by the Finance Act, 1999, w.e.f. 1-6-1999.
[R504]Substituted for "on the amount of the tax on the total income as determined under sub-section (1) of section 143 or on regular assessment as reduced by the advance tax, if any, paid and any tax deducted or collected at source" by the Finance Act, 2006, w.e.f. 1-4-2007. Earlier, these words were also amended by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.
[R505]Substituted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.
[R506]Inserted by the Finance Act, 2003, w.e.f. 1-6-2003.
[R507]Inserted by the Finance Act, 2003, w.e.f. 1-6-2003.
[R508]Inserted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.
[R509]Substituted for "one and one-fourth per cent" by the Taxation Laws (Amendment) Act, 2003, w.e.f. 8-9-2003. Earlier, "one and one-fourth per cent" was substituted for "one and one-half per cent" by the Finance Act, 2001, w.e.f. 1-6-2001, which was substituted for "two per cent" by the Finance Act, 1999, w.e.f. 1-6-1999.
[R510]Inserted by the Finance Act, 2003, w.e.f. 1-6-2003.
[R511]Inserted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.
[R512]Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.
[R513]See Circular Nos. 676, dated 14-1-1994; 783, dated 18-11-1999; 9/2001, dated 9-7-2001 withdrawing Circular No. 730, dated 14-12-1995.
[R514]Substituted for "one and one-fourth per cent" by the Taxation Laws (Amendment) Act, 2003, w.e.f. 8-9-2003. Earlier, "one and one-fourth per cent" was substituted for "one and one-half per cent" by the Finance Act, 2001, w.e.f. 1-6-2001, which was substituted for "two per cent" by the Finance Act, 1999, w.e.f. 1-6-1999.
[R515]Substituted for "to the date of the regular assessment" by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.
[R516]Substituted for "or regular assessment on an amount" by the Finance Act, 1995, w.r.e.f. 1-4-1989.
[R517]Substituted by the Finance Act, 2006, w.e.f. 1-4-2007. Prior to the substitution, Explanation
1, as substituted by the Finance Act, 2001, w.r.e.f.
1-4-1989 read as under:
"Explanation
1.—In this section, "assessed tax" means the tax on the total
income determined under sub-section (1) of section 143 or on regular assessment
as reduced by the amount of tax deducted or collected at source in accordance
with the provisions of Chapter XVII on any income which is subject to such
deduction or collection and which is taken into account in computing such total
income."
Earlier, Explanation 1 was substituted by the Direct Tax Laws (Amendment Act, 1989, w.e.f. 1-4-1989.
[R518]Inserted by the Finance Act, 2003, w.e.f. 1-6-2003.
[R519]Substituted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.
[R520]Inserted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.
[R521]Inserted by the Finance Act, 2003, w.e.f. 1-6-2003.
[R522]Substituted for "one and one-fourth per cent" by the Taxation Laws (Amendment) Act, 2003, w.e.f. 8-9-2003. Earlier, "one and one-fourth per cent" was substituted for "one and one-half per cent" by the Finance Act, 2001, w.e.f. 1-6-2001, which was substituted for "two per cent" by the Finance Act, 1999, w.e.f. 1-6-1999.
[R523]Substituted for "the date of the regular assessment" by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.
[R524]Substituted for "or regular assessment referred to in sub-section (1)" by the Finance Act, 1995, w.r.e.f. 1-4-1989.
[R525]Inserted by the Finance Act, 2003, w.e.f. 1-6-2003.
[R527]Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.
[R528]See Circular Nos. 676, dated 14-1-1994; 783, dated 18-11-1999; 9/2001, dated 9-7-2001 withdrawing Circular No. 730, dated 14-12-1995.
[R529]Substituted by the Finance Act, 1994, w.e.f. 1-4-1995. Sub-section (1), as originally enacted, was amended by the Finance (No. 2) Act, 1991, w.r.e.f. 1-4-1989 and the Finance Act, 1992, w.e.f. 1-6-1992.
[R530]Substituted for "one and one-fourth per cent" by the Taxation Laws (Amendment) Act, 2003, w.e.f. 8-9-2003, which was substituted for "one and one-half" by the Finance Act, 2001, w.e.f. 1-6-2001.
[R531]Ibid.
[R532]Ibid.
[R533]Substituted for "one and one-fourth per cent" by the Taxation Laws (Amendment) Act, 2003, w.e.f. 8-9-2003, which was substituted for "one and one-half" by the Finance Act, 2001, w.e.f. 1-6-2001.
[R534]Inserted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.
[R535]Substituted for "instalment of advance tax which is immediately due or where no such instalment is so due" by the Finance (No. 2) Act, 1996, w.e.f. 1-4-1997.
[R536]Inserted by the Taxation Laws (Amendment) Act, 2000, w.e.f. 4-1-2001.
[R537]Inserted by the Taxation Laws (Amendment) Act, 2001, w.r.e.f. 3-2-2001.
[R538]Substituted by the Finance Act, 2006, w.e.f. 1-4-2007. Prior to the substitution, the Explanation,
as originally enacted, read as under:
"Explanation.—In
this section, "tax due on the returned income" means the tax
chargeable on the total income declared in the return of income furnished by
the assessee for the assessment year commencing on the 1st day of April immediately
following the financial year in which the advance tax is paid 1[or payable], as
reduced by 2[the amount of tax deductible or collectible at source in
accordance with the provisions of Chapter XVII on any income which is subject
to such deduction or collection] and which is taken into account in computing
such total income."
1 Inserted
by the Finance Act, 1992, w.r.e.f. 1-4-1989.
2 Substituted for "the amount of tax deductible at source in accordance with the provisions of Chapter XVIIB on any income which is subject to such deduction" by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.
[R539]Inserted by the Finance Act, 2003, w.e.f. 1-6-2003.
[R540]Substituted for "two-third per cent" by the Taxation Laws (Amendment) Act, 2003, w.e.f. 8-9-2003.