Circular No. 182

What it does

Tells employers to start deducting from the compulsory deposits now coming back to employees. Paragraph 2(3) of Circular No. 161 dated 22 March 1975 had said that what is credited to an employee's ledger account in the Additional Wages Deposit Account or the Additional Dearness Allowance Deposit Account under the Additional Emoluments (Compulsory Deposit) Act, 1974 is not his income of the year of credit, but what is repaid to him is included in his total income of the year of repayment. Section 8(2) of that Act deems the repaid amount to be salary paid in arrears, so relief under section 89(1) applies to it. The Board now points out that amounts in the Additional Wages Deposit Account became repayable after 7 July 1975, on the expiry of one year from the appointed day, under section 9(1)(a) of that Act, and directs that tax be deducted at source on those repayments in accordance with Circular No. 161 as amended by Circular No. 176 dated 16 August 1975.

Why it was issued

The first repayments under the compulsory deposit scheme fell due in July 1975, and employers needed to be told that these carried a deduction obligation.

Who it reaches

Employers repaying additional wages deposits to employees
Employees receiving such repayments in the financial year 1975-76
Drawing and disbursing officers computing salary deduction that year

The provisions it speaks to

Left, the provision of the Income-tax Act, 1961 as the instrument itself names it. Right, the section of the Income-tax Act, 2025 that the department’s own concordance maps it to — which is where the same ground is now covered.

Under the 1961 Act	Now
s.8	s.7
s.9	s.9
s.89	s.157

The instrument, as the Board published it

The words below are the department’s own, reproduced from its published text. Where the department’s copy carried a publisher’s notes after the instrument, those are not reproduced.

FINANCIAL YEAR 1975-76
Instructions for deduction of tax at source from salary during financial year 1975-76 at the rates specified in Part III of First Schedule to Finance Bill, 1975 and Finance (Amendment) Act, 1975
1. Attention is invited to para 2(3) of this Ministry’s Circular No. 161, dated 22-3-1975 [Clarification 1] on the above subject, which lays down that for the purpose of computing the total income of an employee, the amount credited to his ledger account in the Additional Wages Deposit Account or the Additional Dearness Allowance Deposit Account under the provisions of Additional Emoluments (Compulsory Deposit) Act, 1974 shall not be included in his total income of the previous year in which it is so credited but so much of the amount as is repaid to him shall be liable to be included in his total income of the previous year in which it is repaid. Section 8(2) of the Additional Emoluments (Compulsory Deposit) Act, 1974 provides that for the purposes of computing, under the Income-tax Act, 1961, the total income of an employee, the amount repaid to him under this Act shall be deemed to be salary paid to him in arrears and the provisions of sub-section (1) of section 89 shall apply accordingly.
2. The amounts credited to the ledger account of an employee in the Additional Wages Deposit Account have become repayable after July 7, 1975 (i.e., after expiry of one year from the appointed day), under section 9(1)(a) of the Additional Emoluments (Compulsory Deposit) Act, 1974. Therefore, on such repayments tax has to be deducted at source in accordance with the instructions contained in this Ministry’s Circular No. 161 [F. No. 275/12/75-ITJ], dated 22-3-1975 as amended by Circular No. 176 [F. No. 275/12/75-ITJ], dated 16-8-1975 [printed here as Clarifications 1 and 4].
Circular : No. 182 [F. No. 275/12/75-ITJ], dated 28-10-1975.

What to watch

The tax point is the repayment, not the credit; an employee who paid no tax when the amount was withheld pays when it comes back.
Because the repayment is deemed salary paid in arrears, relief under section 89(1) is available and is easily overlooked in the year of receipt.
The circular deals with the Additional Wages Deposit Account, repayable after 7 July 1975; the Additional Dearness Allowance Deposit Account is on the same footing for inclusion but its own repayment date is not fixed here.
The working is in Circular No. 161 as amended by Circular No. 176, which have to be read with this one.

Where you meet it

In a salary computation for 1975-76 that shows a lump repayment of compulsory deposit, and in the section 89(1) relief working attached to it.

On the same provision

Other instruments in this library that name the same provision of the 1961 Act. They are not necessarily still operative, and a later one may have replaced an earlier one without saying so.

Notification No. 7/2024 [F. No. 196/12/2023-ITA-I] / S.O. 79(E) — Ministry of Finance 5 January 2024
Notification No. 42/2022 [F. No. 370142/10/2022-TPL] / GSR 309(E) — Ministry of Finance 22 April 2022
Circular No. 5/2006 — 5/2006 dated 15 05 2006 15 May 2006
Circular No. 430 — Circular : No. 430 [F. No. 225/101/85-IT(A-II)], dated 6-9-1985 6 September 1985
Circular No. 239 — 626. Relief in the case of amounts repaid under Additional Emoluments (Compulsory Deposit) Act - Procedure laid down for 16 May 1978
Circular No. 5/2026 — Circular No. 5 of 2026 12 May 2026

← Circular No. 183 · Circular No. 181 →

A circular binds the department, not you and not a court. The Board issues a circular to its own officers. An assessee may hold the department to a circular that helps him; the department cannot hold an assessee to one that hurts him, and the Tribunal and the courts decide the law for themselves.

Source: the Income Tax Department’s own published text — its page for this instrument.

What this is