Covers s.194C, s.195, s.201(1A), s.40(a)(ia), s.201, s.9(1)(vii), s.201(1), s.194J and 47 more. 101 entries, strongest first, with what each one decided in a sentence. Read down the list, then open the entry that fits your facts. The TDS Defaults hub cross-lists everything that touches this area, including entries filed under another subject.
We sell prepaid SIMs and vouchers to distributors below list price. Is that margin commission under 194H? No. The Supreme Court held that the distributor buys the starter kits and recharge vouchers at a discount on a principal-to-principal basis, so the margin is a trade discount and not commission or brokerage; the operator has no obligation to deduct under s.194H.
You deducted the TDS but paid it late. Is penalty under s.271C leviable? No. Section 271C(1)(a) is attracted by a failure to deduct, not by late payment of tax already deducted. But interest under s.201(1A) still runs, and prosecution under s.276B remains available — this is not an amnesty.
My agents keep the difference between the price they charge customers and the net price they pay me — do I have to deduct TDS on money that never passed through my hands? Yes. The Supreme Court held on 14 November 2022 that the supplementary commission retained by IATA travel agents — the excess of the actual fare charged to the passenger over the net fare payable to the airline — is "commission" under section 194H, and the airlines were bound to deduct tax at source on it. Section 194H is read with section 182 of the Contract Act: where the contract shows a principal-agent relationship, the definition is attracted. But because the agents had paid tax on those amounts, no recovery of the shortfall could be made from the airlines; only interest under section 201(1A) survives, and the section 271C penalties were quashed.
You pay a foreign supplier for software. Is that royalty, and must you deduct TDS? Not royalty. An end-user licence gives a limited right to use a copyrighted article, not an interest in the copyright, so the payment is not chargeable in India and no tax need be deducted under s.195.
I am a transport contractor who hires trucks from individual owners and pays them freight. Does section 194C apply, and can section 40(a)(ia) disallow amounts I have already paid rather than merely owe? Yes to both. The Supreme Court held that section 194C applied to the payments the firm made to truck owners it engaged to carry the cement it had contracted to transport, so it was bound to deduct tax at source; that disallowance under section 40(a)(ia) is not confined to amounts outstanding at the year end but applies equally to expenses already incurred and paid; that the provision as introduced by the Finance (No. 2) Act, 2004 with effect from 1 April 2005 governed assessment year 2005-06; and that the amendment of 2014 reducing the disallowance to thirty per cent gave the firm no benefit. Splitting a single freight payment into two vouchers below Rs 20,000 did not escape section 194C.
I paid a foreign body from my overseas bank account for an event partly held in India — must I deduct tax at source when the payee is protected by a treaty? Yes. The Supreme Court held on 29 April 2020 that PILCOM, the joint committee of the Indian, Pakistani and Sri Lankan cricket boards, had to deduct tax under section 194E from guarantee money paid out of its London accounts to non-resident cricket boards and to the ICC for the 1996 World Cup. The payments represented income which accrued, arose, or was deemed to accrue or arise in India, because matches were played here. The obligation under section 194E is not affected by a double taxation avoidance agreement: if the payee says the receipt is not taxable, it claims a refund with interest, but the deductor is not absolved.
We paid stock exchange transaction charges without TDS. Are those fees for technical services under 194J? No. The exchange's trading platform is a standard facility available to every member on identical terms, with no customisation for the payer, so the transaction charges are not fees for technical services under s.194J — and the s.40(a)(ia) disallowance built on that premise falls away.
We pay landing and parking charges to the airport. Is that rent under 194-I at the higher rate? No. The charges pay for a bundle of services connected with operating aircraft at the airport — air traffic services, ground safety, aeronautical communication and compliance with safety standards — with use of the tarmac only incidental, so they are not rent under s.194-I and s.194C is the right provision.
I buy stamp papers from the government at a discount and resell them. Is that discount commission under 194H? No. The sale of stamp papers by the State to a licensed vendor is a sale on a principal-to-principal basis, and the 0.50% to 4% margin is a cash discount for bulk purchase, not commission or brokerage attracting deduction under s.194H.
Must you deduct tax on every payment to a non-resident, just to be safe? No. The obligation under s.195 arises only where the sum paid is chargeable to tax under the Act. Mere remittance to a non-resident does not attract it, and you need not apply under s.195(2) where nothing is chargeable.
We pay interconnect and port charges to another telecom operator — is that fees for technical services on which we must deduct tax under section 194J? Unresolved, and the Supreme Court sent it back for evidence. On 12 August 2010 it held that the question turns on whether human intervention is involved in the technical operations by which one operator gives another interconnection, and that this cannot be decided without technical assistance on the record. Since 1979 the courts have read technical services narrowly, applying noscitur a sociis, because the words sit between managerial and consultancy services in Explanation 2 to section 9(1)(vii). The department had led no expert evidence. The matters were remitted to the Assessing Officer (TDS) to examine an expert, and no interest or penalty was to be levied for the past.
I pay a non-resident in kind, not in cash. Do I still have to deduct tax at source under section 195? Yes. The Supreme Court held that charter fee discharged by handing a non-resident owner 85 per cent of the fish caught was a payment attracting section 195, and that the non-resident received it in India. Until the catch was apportioned it belonged wholly to the Indian charterer; the non-resident got control only when its share was handed over at Chennai after certification, valuation and customs clearance. That was the first receipt in the eye of law and it was in India, so the income was chargeable under section 5(2). The company was rightly treated as an assessee in default under section 201 for not deducting.
The TDS officer says I under-deducted under s.192. If my estimate was made honestly, does that answer the demand, the interest and the penalty? It answers the penalty, not the tax and not the interest. The Supreme Court treated s.192(1) as requiring the employer to estimate the salary — an exercise akin to computation — and held that where there was a shortfall the officer proceeds under s.201(1) to recover it and interest under s.201(1A) runs from the date the tax was deductible to the date the tax was actually paid. On penalty it held that s.271C should not be invoked where the issue was a nascent one and the employers had acted bona fide.
As an employer, must I collect bills and tickets from employees before treating leave travel concession or conveyance allowance as exempt while deducting tax under section 192? No. The Supreme Court dismissed the department's appeals on 21 January 2009, holding that an employer is under no statutory obligation, under the Act or the Rules, to collect evidence that its employees actually spent the amounts paid as leave travel concession or conveyance allowance. Two reasons are given. The beneficiary of the exemption under section 10(5) is the individual employee, not the employer. And there is no circular of the Central Board of Direct Taxes requiring an employer, when deducting under section 192, to collect and examine material supporting the declaration the employee submits. The appeals were dismissed with no order as to costs.
I did not deduct TDS, but the person I paid has already paid tax on it. Can the department still recover it from me? Reported as holding that the tax cannot be recovered twice — once the payee has paid, the deductor is not liable for the tax again. Interest may still run for the period of delay.
I am paying a foreign supplier for equipment and its erection. Most of the payment is cost, not profit. Must I deduct tax at source under section 195 at all? Yes. The Supreme Court held that any other sum chargeable under the provisions of this Act in section 195(1) is not confined to pure income profits. A sum is within the section if it is chargeable to tax, and that includes a sum in which income is hidden or embedded, such as a trading receipt of which only a fraction is taxable. The deduction is tentative, subject to regular assessment, and the payer's and recipient's protection lies in applying under section 195(2) or (3) or section 197 for a determination of the chargeable proportion or a lower or nil deduction.
I am paying a foreign supplier for equipment and for erecting it, and only part of that is really his income - must I deduct tax under section 195 on the whole payment? Yes, unless you first get the chargeable proportion fixed. The Supreme Court held that any other sum chargeable under the provisions of this Act in section 195(1) is not limited to payments that are wholly pure income profits; it covers a gross trading receipt in which income is embedded. The payer's obligation is confined to the appropriate proportion of income chargeable, but that proportion is determined on an application under section 195(2), or by the recipient under section 195(3) or section 197. If no application is made, tax must be deducted on the sum paid. The assessee's appeals were dismissed with costs.
My contract is only for loading bags, not a works contract, and much of what I pay is reimbursement of the contractor's wage bill. Must I still deduct under section 194C on the whole sum? Yes. The Supreme Court held that any work in section 194C(1) means any work, not a works contract, which is a term with a special connotation in tax law. The sub-clause itself includes supply of labour, which shows the wider intention. The deduction is of a percentage of the sum credited or paid, not of the contractor's income component; the words on income comprised therein show only that what is deducted is tax at source. And nothing in the sub-section allows the payer to exclude amounts paid to the contractor by way of reimbursement of wages he has paid his workers.
I pay a labour contractor a rate per tonne plus reimbursement of his workers' wages. Do I deduct tax on the whole payment or only on his profit element? On the whole payment. The Supreme Court held that section 194C(1) requires two per cent to be deducted out of the sum credited to or paid to the contractor, not out of the contractor's profit inside that sum. The words 'on income comprised therein' describe a deduction at source, not a licence to isolate the contractor's income. The Court also held that 'any work' means any work and is not confined to a works contract. Amounts reimbursed to the contractor under the contract for wages paid to his workers cannot be carved out of the sum.
A foreign professional worked on our matter in India but we neither briefed him nor paid him. Can we be treated as his agent and made liable for his tax? Yes, on these facts. The Supreme Court held that 'business connection' in section 9(1) is not confined to trade or manufacture and takes in a professional connection. Business means an activity carried on continuously and systematically by applying labour or skill to earn income, and professions are generally regarded as businesses. The connection between the Calcutta solicitors and the English barrister was real and intimate, not casual: he argued their case with their consent, alongside their Indian counsel, and could not have earned the fees without associating himself with them. The order treating them as his agent under section 163(1) stood.
My employer deducted tax but never deposited it, so the credit was denied on processing, a demand now sits on the portal and my later years' refunds are being eaten by it. Do I get the credit and the refund, or only a promise that nobody will recover from me? You get the credit and the refund, not merely a bar on recovery. A Division Bench of the Bombay High Court, hearing a batch of such petitions with the assistance of an amicus, held that where an assessee establishes that tax was in fact deducted at source, the Department must grant appropriate TDS credit and cannot recover the corresponding amount from the deductee directly or indirectly, that the consequential relief including refund must follow, and that pending disposal of a credit application the demand must be marked in the system as stayed or not recoverable so that no coercive recovery or refund adjustment takes place.
My society's bank has marked a lien on its current account for s.194N tax on cash withdrawals which the bank itself never deducted. Can a bank do that, and is the society liable? No, on both counts. The Karnataka High Court held that the bank had no statutory authority to create a lien over the amount lying in its customer's current account. The obligation under s.194N is cast on the paying bank and is to be discharged at the time of payment; the consequence the Court identified is a penalty on the bank under s.271C, imposed by a Joint Commissioner, and the section does not contemplate either a deduction liability or a penalty on the customer.
The faceless unit has disallowed my purchases for not deducting under s.194Q and has said nothing at all about the Board's circular I quoted in my reply. Is that enough to get the order set aside? Yes. The Karnataka High Court set aside an order under s.143(3) read with s.144B, made in a s.194Q scrutiny, on the single ground that CBDT Circular No. 13/2021 had not been considered or appreciated by the assessing unit, and remitted the matter for fresh consideration in the light of that circular. Guidelines issued under s.194Q(3) are issued with the approval of the Central Government and the officer is not free to pass over them in silence.
My payee refuses to sign the accountant's certificate for Form 26A. Can I get a writ compelling him to issue it? No, not where the records the certificate must rest on no longer exist. The deductor wanted a mandamus against the Airports Authority of India to issue the accountant's certificate in Annexure A to Form 26A under rule 31ACB, so as to bring itself within the first proviso to section 201(1) and escape disallowance under section 40(a)(ia). The Authority's answer was that its records for the period before April 2013 had been lost in floods in 2015 and could not be retrieved from the legacy system after migration. The Delhi High Court held that a mandamus enforces a clear legal right and a corresponding public duty, and does not lie to command an authority to issue a factual certification when the records on which such a certification must rest are not there. Replies under the Right to Information showing that returns had been filed did not fill the gap, because proof that a return was filed is not proof that a particular receipt from a particular payer was accounted for in it. The review petition was dismissed.
The payee will not give me the accountant's certificate in Form 26A, so I am stuck as an assessee in default. Can the High Court order it to sign? Not where the payee does not have the records to certify from. The Delhi High Court held that the Form 26A certificate is not a routine administrative letter but a certification of specific statutory facts made after examining the payee's return, accounts and documents. Mandamus lies to enforce a clear legal right and a corresponding public duty; it does not lie to command an authority to certify facts it cannot verify. Proof that the payee filed its return, and bank statements showing receipts, are not proof that the particular sum was taken into account in computing its income. The review petition was dismissed, no error apparent being shown.
After a survey the TDS officer says my consultant doctors are employees and wants 192 instead of 194J. Is he right? Not on these facts, and only part of the case was decided. On the doctors the High Court found no substantial question of law: they are appointed on probation for qualification and specialisation, receive no fixed monthly remuneration, are free to practise at other hospitals, get no PF or ESIC and no perquisites, attend according to patients' needs, and the hospital exercises no real supervisory control; the doctors had also returned the receipts as business or professional income. The separate maintenance-contract question was not answered — the Tribunal's order on it was set aside and the matter sent back for a contract-by-contract finding, and the assessee-in-default question on that limb goes with it.
I have been held an assessee in default under s.201 for not deducting s.194C and s.194LA tax when I issued TDR certificates instead of paying money. Is there an answer where the payment is wholly in kind? The Bombay High Court found a strong prima facie case and stayed the s.201 order, the demand and the s.271C penalty notice. Its prima facie view is that the words 'or by any other mode' in s.194C and in s.194LA must be read ejusdem generis with payment in cash or by cheque or draft, so those sections do not operate where the payment is made in kind by issuing transferable development rights. The court drew support for that reading from s.194B and s.194R, which do contain express machinery for a benefit paid wholly in kind and which is conspicuously absent from s.194C and s.194LA.
I deducted 2% under 194C and the AO says it was 194J at 10%. Can he disallow the expense? No. Tax had in fact been deducted, so this is short deduction and not non-deduction, and s.40(a)(ia) does not reach short deduction. The Uttarakhand High Court dismissed the revenue's appeal against deletion of the disallowance.
The AO says our EDC paid to HUDA was 'rent' and has raised a s.201 demand for not deducting under s.194-I. Is that right? No. External Development Charges paid to the Haryana authority are not rent, so s.194-I is not attracted and a s.201(1)/201(1A) order built on s.194-I cannot stand. The Delhi High Court dismissed the Revenue's appeal, holding the point squarely covered by its own earlier decision in DLF Homes Panchkula. It also refused to let the Revenue rescue the order by switching to s.194C at the appeal stage, because s.194C was never the case the AO made.
I paid External Development Charges to HUDA/HSVP because the Town and Country Planning Department told me to. I have no contract with HUDA. Does s.194C still oblige me to deduct tax at source? Yes. The Delhi High Court rejected the developers' challenge and held that EDC payments fall within s.194C. The privity argument does not work: s.194C looks for a contract under which the contractor carries out work, not for a contract between the payer and the payee. Nor does s.196 rescue the developer, because HSVP is a legal entity distinct from the Government of Haryana. This is a different question from the one decided in DLF Homes Panchkula, which held EDC is not 'rent' under s.194-I. The two decisions sit side by side and do not conflict.
My plant erection contract includes testing and commissioning. Can the AO carve that out and demand 194J? No. Where testing and commissioning form part of an indivisible contract for setting up a thermal power plant, the payments fall under s.194C as work; the consideration cannot be fragmented to create a fees-for-technical-services component under s.194J.
My customer deducted TDS on my bills and deposited almost none of it, and I have no Form 16A. Can I still get the credit and stop the demand? Yes. The Court held that the bar in s.205 operates as soon as it is established that tax was deducted at source, whether or not the deductor deposited it and whether or not a TDS certificate was issued. Form 16A is not the only evidence of deduction; other reliable material — the return disclosures supported by ledger accounts — will do.
I pay a dairy to process my milk. Do I deduct 2% under 194C or 10% under 194J? 2% under s.194C. Processing of milk by a dairy is job work, not technical services — the Gujarat High Court approved the Tribunal's reliance on CBDT Circular No. 13/2006 dated 13 December 2006 to that effect, and the s.40(a)(ia) disallowance fell with the characterisation.
Are External Development Charges paid to HUDA 'rent' under s.194-I? And if the AO picked the wrong section, can the department switch sections on appeal? EDC paid to the Haryana authority under the statutory licensing scheme is not rent, so s.194-I is not attracted. The Revenue did not even try to defend the Assessing Officer's reasoning; it asked instead for a remand so the officer could apply s.194C. The Court refused. An order under s.201 stands or falls on the reasoning the officer actually gave, and the reasoning here was fundamentally flawed. The s.201(1) and 201(1A) demands were set aside.
My employer deducted TDS but never deposited it. The department has raised a demand on me and set my later refund off against it. Can it do that? No. s.205 bars a direct demand on the person from whose income the tax was deducted, and the Court held that adjusting a later year's refund against that demand is an indirect recovery of the same tax. The demand notice and the adjustment were quashed and the refund directed to be released.
The AO says I short-deducted TDS on director remuneration. Can he disallow the payment under 40(a)(ia)? No. The Delhi High Court held that where there is short deduction of tax at source, disallowance cannot be made under s.40(a)(ia) and the correct course open to the officer is to invoke s.201.
I paid freight without TDS after taking the transporters' PANs. Can the AO still disallow the freight? No. The exclusion from the duty to deduct in s.194C(6) is complete the moment its substantive conditions are met, and from that point the payer has no authority to deduct at all; the obligation under s.194C(7) to furnish particulars arises at a much later point and its breach cannot revive a deduction obligation that never existed. Since s.40(a)(ia) operates only where tax was deductible and was not deducted, it had nothing to work on. On the facts the Tribunal had found that no prescribed authority stood nominated to receive the particulars, so filing them with Form 26Q was sufficient compliance. Two other issues went the same way: discounts to customers who took delivery into their own godowns were not rent under s.194-I, and depreciation on cars registered in directors' names but paid for and used by the company was allowed on beneficial ownership.
I engage salaried doctors, in-house consultants and visiting consultants. Can the officer treat them all alike? No — but you get a rehearing, not a finding. The Karnataka High Court set aside the Tribunal order treating the hospital as an assessee in default and remitted the matter, holding that the AO must reconsider the question with attention to the hospital's incentive policy and the returns the doctors actually filed.
We run an e-auction platform. Buyers pay the sellers directly and no sale consideration passes through us. Are we still bound to deduct under s.194-O on the gross amount, and is there any way to raise the difficulty with the Board? The point has not been decided, but the Calcutta High Court treated the difficulty as real and gave two things a platform in this position needs. It directed the CBDT to dispose of the operator's representations under s.194-O(4) by a reasoned and speaking order within six weeks after a hearing, and in the meantime directed that the operator continue to deposit the TDS it actually receives from participants and that it not be treated as in default until those representations are decided. Counsel for the Revenue could not justify the Board's inaction on representations pending since December 2020.
Must I deduct under 194N on cash withdrawals that are not the account holder's income? No. Section 194N requires a sum to be deducted 'as income-tax', and income-tax is a levy on income — where no income results, there is no levy, and the TDS machinery is not itself a charging provision. The bank must be allowed to lead evidence that the payee bore no tax liability on the sum withdrawn.
I pay uplinking and bandwidth charges for my channel. Is that 194C work or 194J technical services? S.194C. The Court held first that no technical service was rendered at all: a standard, automated facility that anyone may use on payment of the prescribed fee is not a service rendered to the payer, whatever equipment is involved. Only then did it turn to s.194C, whose inclusive definition of 'work' specifically includes broadcasting and telecasting. Tax was rightly deducted under s.194C and there was no short deduction.
The officer issued my 197 certificate at a higher rate without giving reasons. Can I challenge it? Yes. An order under s.197 is quasi-judicial and must rest on valid and cogent reasoning applying the objective criteria in Rule 28AA. A 5% certificate issued on a superior officer's instruction, departing from a consistent 1.5% history without reasons, was quashed and remitted for a fresh reasoned order.
My employer deducted tax from my salary but never paid it over. Can the department recover it from me and adjust my refunds? No. The Gujarat High Court held that the department cannot deny the benefit of tax deducted at source by the employer, and directed that credit be given for the relevant years. It followed its own Division Bench decision in Sumit Devendra Rajani, which construed section 205 and agreed with the Bombay and Gauhati High Courts that where the deductee produces Form 16A the credit must be given and a demand cannot be sustained. Any recovery or adjustment already made out of later years' refunds was to be returned with statutory interest. The department remains free to recover the tax from the deductor.
My overseas vendor has no Indian PAN — must I withhold 20 per cent under section 206AA when the treaty caps the rate at 10 per cent? No. The Delhi High Court held on 5 February 2018 that section 206AA, as it stood, must be read down: where the payee operates from a territory whose government has a double taxation avoidance agreement with India, the rate of deduction is the rate the treaty dictates, not 20 per cent. The petitioner remitted fees for technical services to a Singapore company with no Indian PAN; Article 12 of the India-Singapore treaty caps the tax at 10 per cent. Following Azadi Bachao Andolan, the Court held the treaty takes primacy, and noted that Parliament had itself softened the provision by substituting section 206AA(7) with effect from 1 June 2016.
Our erection and commissioning contractor uses its own engineers. Should we deduct under 194J, not 194C? No. Payments for construction, erection and commissioning of a plant do not become fees for technical services merely because the contractor deploys technical personnel to perform its contract; deduction under s.194C is correct.
I failed to deduct TDS and the department has raised a demand on me for the tax itself plus surcharge under section 201. Can it do that? No, not on this judgment. The Allahabad High Court held that section 201 by itself imposes only interest under sub-section (1A) and penalty under sub-section (1); it carries no provision letting an income-tax authority demand the amount of TDS, or the tax, from a person who failed to deduct, unless the case answers section 201(2), where tax was deducted but not paid over. Surcharge on a TDS amount was struck down as well, tax deductible at source being different from tax on total income. What survives is interest under section 201(1A), from the date the tax was deductible to the date the tax was actually paid.
How far back can the department go to treat you as an assessee in default for a TDS lapse? Not indefinitely. The Court quashed notices reaching more than four years back, holding the department had exceeded its authority — and that a CBDT circular cannot enlarge what the statute allows.
You did not deduct TDS, but the payee declared the income and paid the tax. Is the expenditure still disallowed? No. The second proviso to s.40(a)(ia) is declaratory and curative and applies retrospectively from 1 April 2005, so no disallowance survives where the payee has returned the amount and paid tax on it.
I deducted under 194C when 194J applied. Does that short deduction still trigger a 40(a)(ia) disallowance? Yes, on the Kerala High Court's view. Deducting under an inapplicable section is not deduction as required by Chapter XVII-B, so where professional services were paid for under s.194J and tax was deducted at the s.194C rate, the shortfall is treated as a failure to deduct and s.40(a)(ia) applies.
We pay transmission and wheeling charges to a licensee. Is TDS due under 194-I or 194J? Neither, on this assessee's facts. Carrying power over another's network gives the payer no possession or occupancy of the network, so the charge is not rent under s.194-I; and the charge is a tariff fixed by the regulator, not consideration for a technical service rendered to the payer, so s.194J does not apply either. Note that the Court expressly confined its conclusion on rent to this assessee, in view of the public function it discharges after the restructuring of the State Electricity Board.
I filed my TDS statement late and have been charged Rs.200 a day under section 234E — is that levy even constitutional when no service is given in return? Yes. The Bombay High Court upheld section 234E on 9 February 2015. The levy is not punitive: it is a fixed charge for the extra work the Department must do because the statement came in late, and the deductor gets something in return — his late filing is regularised and he is allowed to file beyond the prescribed time. That is a privilege and a special service, so the charge is a fee and not a tax in disguise. The absence of a power to condone delay and of a right of appeal does not make the section onerous, a right of appeal being a creature of statute. The writ petition was dismissed.
The bank keeps a small percentage of every credit card sale before crediting me. Should I have deducted tax at source on it under section 194H? No. The Delhi High Court held that what the acquiring bank retains when settling a credit card sale is a fee for banking services, not commission or brokerage. Section 194H catches a payment received by a person acting on behalf of another, and the bank and the retailer deal as independent parties on a principal to principal basis; the bank is a middleman for nobody and is indifferent to the goods being sold. The disallowance of Rs.44,65,654 under section 40(a)(ia) therefore fell away. The Court added that section 40(a)(ia) is a deterrent and penal provision that should be construed strictly.
We have people seconded to us from our overseas group companies, they work under our control, and we only reimburse their salary cost — do we still have to withhold tax under section 195? Yes. The Delhi High Court held on 25 April 2014 that the overseas group companies remained the real employers of the secondees, so what they supplied was the service of trained personnel, not a bare loan of staff. The payment was fees for technical services under Article 13 of the India-UK DTAA and, because the secondees passed their quality-control know-how on to the Indian staff, made-available services under Article 12 of the India-Canada DTAA. The overseas entities also had a service permanent establishment. Calling the payment a reimbursement, and charging no mark-up, made no difference. Section 195 applied and the writ petition was dismissed.
CPC has refused my TDS credit and adjusted the refund against an old demand. What did the Delhi High Court actually direct? Taking up the problem on its own motion, the Delhi High Court issued directions on both limbs. A TDS claim supported by the deductor's certificate is not to be rejected merely because the uploaded information does not tally, and unmatched challans are to be verified and corrected within a fixed time. And s.245 is a two-stage provision: prior intimation of the proposed adjustment, a reply from the assessee, consideration of that reply by the Assessing Officer, an order under s.245, and communication of the outcome. A computerised set-off without that sequence does not comply with the section.
My income is below the taxable limit and I filed Form 15G, but the finance company says it cannot act on it without a PAN. Can section 206AA be applied to me? No. The Karnataka High Court read section 206AA down as inapplicable to persons whose income is below the taxable limit. Section 139A obliges only certain persons to obtain a permanent account number, and a person with income below the exemption limit is not among them. Section 206AA, which invalidates a section 197A declaration filed without a PAN, runs contrary to that earlier provision and, so applied, is discriminatory. The Court held that banking and financial institutions must not insist on a PAN from such small investors, adding that any evasion or concealment can be dealt with under the penal provisions. Section 206AA continues to apply to those above the taxable limit.
I publish a newspaper and allow accredited advertising agencies the standard 15 per cent trade discount. The TDS officer says that is commission under section 194H and has raised a demand on me. Is that right? No, on the reasoning available in this judgment. The Allahabad High Court held that section 194H applies only where the recipient acts on behalf of the payer, and here there was no agreement between the newspaper and the advertising agencies and no agency had ever been appointed. The Kerala decision in Director, Prasar Bharati, on which the department relied, turned on a written agency agreement containing an express clause about withholding tax, and was held to be inapplicable. The Delhi High Court had already decided the same question against the department in Living Media India, and the Supreme Court had dismissed the department's special leave petition against it on 11 December 2009.
I get a third party to manufacture my products to my formulation and under my brand, but he buys the raw material himself. Should I be deducting tax under section 194C? No, on those facts. The Bombay High Court held the contract was one of sale, not of work, so section 194C was not attracted and the company could not be treated as an assessee in default under section 201(1). What decides it is not the specifications or the trade mark but the material and the passing of property: the manufacturer sourced the raw material himself, worked at his own establishment on a principal to principal basis, and property passed only on delivery. The Court held clause (e) of the Explanation inserted by the Finance Act 2009 to be clarificatory of a position that had held the field for over three decades.
I sell prepaid SIM cards and recharge coupons to my distributors at a discount. Is that discount commission on which I must deduct tax under section 194H? Yes, on the Delhi High Court's view. It set aside the Tribunal and held that the relationship between the cellular operator and its prepaid market associates was principal and agent, not principal to principal. The distributor never became the owner of the SIM card, which remained the operator's property and gave the ultimate subscriber access to the operator's network; what was being delivered was a service, and a service cannot be bought and sold. The distributor was a link in the chain by which the operator provided that service. The discount was therefore commission within section 194H, and the operator was rightly treated as in default under section 201(1) with interest under section 201(1A).
My employer deducted TDS from my salary, never paid it to the Government and never gave me a Form 16. The Department is now recovering that tax from me. Can it? No. The Bombay High Court held that section 205 bars a direct demand on the assessee to the extent tax has been deducted at source, and the bar operates the moment deduction is established. Whether the deductor paid the money over, and whether a Form 16 was issued, are both irrelevant to the bar. The Act gives the Department complete machinery against the deductor - section 201 default, interest, a charge on its assets, penalty under section 221 and prosecution under section 276B - and that is the only route open. Rs 17,89,587 recovered by attaching the employee's bank account was ordered refunded with interest at six per cent.
My airline pays landing and parking charges at an Indian airport. Do I have to deduct tax at source on them as rent under section 194-I? Yes, on this Delhi High Court view. It dismissed the writ petition against the Commissioner's order under section 264 and held that landing and parking charges are rent within Explanation (i) to section 194-I. That Explanation gives rent a wider meaning than in common parlance: any payment, by whatever name called, under any agreement or arrangement for the use of any land. When the wheels of an aircraft touch the airfield, use of the airport's land begins, and parking is use of land too. The definition is a legal fiction and must be applied literally; arguments about the intention behind the provision are out of place in a taxing statute.
My printer supplies labels made to my design but out of his own paper and ink at his own premises. Must I deduct tax under section 194C? No, on these facts. The Bombay High Court held that the supply of printed labels was a contract of sale and not a works contract, so section 194C did not apply, and it quashed the orders of the Tribunal, the Commissioner (Appeals) and the Income Tax Officer (TDS). The printer was an independent establishment supplying similar labels to other customers, it worked in its own premises with its own machinery, labour and raw material, and the assessee supplied nothing. That the labels were made to the assessee's specifications and could not be sold elsewhere did not convert the transaction, since the quantity was limited to the purchase order.
My company pays mobile phone bills. The department says these are fees for technical services and we must deduct tax under section 194J. Must we? No. The Madras High Court quashed the department's direction and allowed the writ petitions with costs. Collecting a fee for the use of a standard facility offered to everyone willing to pay for it is not a fee received for technical services, even though the facility runs on sophisticated equipment. A subscriber contracts for airtime, not for a technical service, and is not concerned with the equipment in the exchange or the location of the base station. What is not a technical service when the subscriber is an individual does not become one when the subscriber is a firm or a company, because the facility is the same.
The TDS officer says I under-deducted on perquisites and wants the short tax under section 201(1) plus interest under section 201(1A). My estimate was honest. Does that answer the demand or only the penalty? It answers the demand itself. The Madhya Pradesh High Court held that section 192 obliges the employer to deduct on the estimated income of the employee, so the employer has to form an opinion on his employee's liability and must do so honestly and fairly. If the estimate later turns out to be wrong, that fact alone does not support an inference that he failed to act honestly and fairly, and an employer who has deducted and paid tax on an honest estimate cannot be treated as an assessee in default under section 201(1). Interest under section 201(1A) went with it, the revenue accepting that sub-section (1A) is not attracted where there is no default under sub-section (1).
The relief where the payee has paid the tax came in from 2013. Can I use it for an earlier year? Yes. The Punjab & Haryana High Court held the second proviso to s.40(a)(ia) declaratory and curative, and therefore retrospective from 1 April 2005, so where the resident payee has offered the income in its return and paid tax, no disallowance can be made.
Tax was deducted in my PAN under s.194Q on the whole mandi turnover, but I am a kachha arahtiya and I only offer my commission to tax. CPC has cut my TDS credit down in proportion. Can I still claim the whole deduction? Yes, on this order. A commission agent in the Bundi grain mandi declared commission receipts of Rs 2,94,975 and claimed TDS of Rs 2,37,479, of which Rs 74,072 had been deducted by purchasers under s.194Q on sale proceeds that belonged to the farmers; CPC allowed Rs 10,037 under s.143(1)(a) and the Commissioner (Appeals) upheld the withholding of the s.194Q component. The Jaipur SMC Bench held that once an amount has been deducted from the assessee's income and paid into the Government treasury against his PAN, credit cannot be refused on the ground that the deduction ought to have been made in somebody else's hands, and found no merit in the Commissioner (Appeals)'s reliance on s.199 read with rule 37BA(2). Note what this is not: the Tribunal did not decide any question about the scope or correct application of s.194Q, and expressly proceeded on the footing that the deduction may have been made wrongly.
The Assessing Officer has disallowed 30 per cent of my purchases under s.40(a)(ia) for not deducting s.194Q TDS, but the seller had already collected TCS under s.206C(1H) and it shows in my Form 26AS. Does that answer the disallowance? Yes, in principle. The Tribunal held that where the seller has already collected tax at source under s.206C(1H) on the same transaction, the Board's instructions on s.194Q are clear that no deduction under s.194Q is required, and restored the matter to the Assessing Officer to verify the Form 26AS entries. The concession comes from para 4.9.5(v) of CBDT Circular No. 13/2021 and is available only for the years in which s.206C(1H) was in force — in practice AY 2022-23 to AY 2025-26.
My joint development agreement is with a perpetual lessee, not the owner of the land. Do I deduct one per cent under section 194-IA or ten per cent under section 194-IC? Ten per cent. The Mumbai Tribunal held that section 194-IC applies. Reading section 45(5A) with the Memorandum explaining its introduction, the definition of specified agreement cannot be confined to the holder of freehold title, because that would take a transfer by a leaseholder under a joint development agreement out of the net altogether, contrary to the purpose of a provision meant to ease the burden on the transferor. The land here had been on perpetual lease since 1938, the payee held the right to give it for development and to receive consideration in money and in kind. On the alternative plea, the Tribunal remitted the matter and directed that relief not be refused merely for want of Form 26A.
I never filed Form 26A, but my payee did include the amount in its return and pay tax. Is the s.40(a)(ia) disallowance still good? No, on these facts. The Tribunal deleted the disallowance where the recipient had offered the interest in its return and paid tax on it, applying Hindustan Coca-Cola, and held that the absence of Form 26A could not defeat the claim for a year before rule 31ACB and Form 26A existed at all.
I manufacture liquor and settle volume-linked scheme discounts with my distributors by credit note. The TDS officer says those credit notes are commission under s.194H and has made me an assessee in default. Is he right? No, on these facts. The Kolkata Bench held that a post-sale discount in cash or in kind, given to a buyer with whom the seller deals on a principal-to-principal basis, is a normal sales discount that reduces the sale price and is not commission or brokerage within Explanation (i) to s.194H, so there was no obligation to deduct and no default under s.201(1) or interest under s.201(1A); the consequential s.271C penalty went with it. Note what this order is not: although the assessee argued s.194R and s.194Q at length, the Tribunal decided the case entirely on s.194H and its operative paragraphs say nothing about either provision.
I took the transporters' PANs but slipped on the 194C(7) reporting. Does that cost me the deduction? No. S.194C(6) and s.194C(7) are independent: the PAN removes the obligation to deduct, while s.194C(7) is only a reporting requirement, and a lapse there cannot revive a deduction obligation that never arose. S.40(a)(ia) bites only where tax was deductible and not deducted.
TDS was not deducted on commission I paid. Can the AO disallow all of it, or only 30%? Only 30 per cent, on this view, and part of the disallowance went altogether. The Delhi Tribunal held the amendment restricting the s.40(a)(ia) disallowance to 30 per cent of the expenditure instead of 100 per cent to be curative and to apply retrospectively, and restricted the disallowance accordingly for payees paid more than Rs 10,000. It separately deleted in full the disallowance referable to four payees who had each been paid less than Rs 10,000, because no obligation to deduct under s.194H arose on those payments at all.
Four of us bought jointly, each share under Rs 50 lakh — is 194-IA TDS due after the 2024 change? Yes, for anything on or after 1 October 2024. This order held the Rs 50 lakh limit in s.194-IA(2) is tested against each transferee's own share, so four buyers at Rs 37,50,000 each owed nothing on a Rs 1.5 crore deed — but a proviso inserted by the Finance (No.2) Act, 2024 with effect from 1 October 2024 aggregates the amounts paid by all transferees to all transferors, so the order now governs only earlier transactions.
My contract manufacturer buys his own raw material and makes goods to my specification. Do I deduct TDS? No, on that arrangement. Under the Explanation to s.194C, manufacture or supply of a product to a customer's specification is 'work' only where the material is bought from that customer; where the manufacturer buys it from anyone else the transaction is a sale on principal-to-principal basis and s.194C is not attracted.
Two High Courts disagree on short deduction and mine has not ruled. Which view applies to me? The one favourable to the assessee. Where two non-jurisdictional High Courts differ and the jurisdictional High Court has not ruled, the Mumbai Tribunal adopted the assessee-favourable view, so deducting 2 per cent under s.194C where the officer said 10 per cent under s.194J attracted no disallowance under s.40(a)(ia): there is nothing in that section to treat an assessee as a defaulter where there is only a shortfall in deduction. The Tribunal did not reason the tie-break for itself - it adopted the reasoning of two coordinate Benches and held itself bound to follow them.
We only reimbursed actual expenses billed separately. Was TDS under 194C required on those amounts? No. A pure reimbursement carries no income in the recipient's hands, so there is nothing to deduct on under s.194C and no disallowance under s.40(a)(ia) can follow. What matters is that the expenses were separately billed with no profit or service element added.
I pay Google Ireland and Yahoo for online search advertising. Must I deduct tax at source, or will the expense be disallowed? No tax was deductible, so no disallowance. The Kolkata Tribunal held that payments for online search advertising to Google Ireland and Yahoo USA were not taxable in India. Neither had a permanent establishment here, and a website by itself is not a PE. The service is fully automated with no human intervention, so it is not fees for technical services under section 9(1)(vii) or under the India-Ireland treaty; and under the India-USA treaty nothing was made available. With no primary liability on the recipient there was no withholding obligation under section 195 and no disallowance under section 40(a)(i).
We paid a UK merchant bank commission for managing our GDR issue. Does 'fees for technical services' in the treaty catch it, so that we had to deduct tax under section 195? No, on the Tribunal's reading of the treaty. The Mumbai Tribunal held that Article 13.4(c) of the India-UK treaty is not satisfied by merely rendering technical or consultancy services. The services must also make available technical knowledge, experience, skill, know-how or processes, meaning the recipient must be able to apply them himself afterwards without going back to the provider. The lead manager's work on the GDR issue left Raymond with nothing of that kind once the issue closed. The Tribunal also rejected the argument that the managers had bought the GDRs and resold them, and held that the UK treaty applied.
What proof do I need that my payee declared the income and paid tax, to get the disallowance deleted? A chartered accountant's certificate showing the payee included the amount in its return and paid tax on it was accepted as sufficient. Once the payer is not deemed an assessee in default under the first proviso to s.201(1), s.40(a)(ia) is deemed to have been complied with and the disallowance goes.
We collect examination fees in India for two American professional bodies and send the money on. Is that taxable here, and must we deduct tax before we remit? No. The Authority ruled that the examination fees collected for APICS and AST&L and remitted to them were not taxable in India, that the income was business income in nature, and that the applicant need neither deduct tax nor pay any. The fees were received in India by the applicant on the American bodies' behalf, so section 5(2)(a) was in play; but both bodies were residents of the United States for the agreement notwithstanding their exemption under section 501(c)(6) of the Internal Revenue Code, and the applicant was not their permanent establishment. With no permanent establishment, article 7 left the profits taxable only in the United States, and section 195 had nothing to bite on.
We send faulty equipment abroad for repair by a US supplier and separately pay it to maintain the software. Do we deduct tax on either, and at what rate? It depends on which contract. The Authority ruled that the payment to Raytheon for hardware repair support was not taxable in India and that the applicant was not required to deduct tax on it: the repairs were done outside India, delivery was taken outside India and Raytheon had no permanent establishment here, so article 7 left those business profits to the United States. The software maintenance contract went the other way. The deputation of an engineer created no permanent establishment, but the payments were fees for included services under article 12, the applicant having a conditional right to use the software rather than an outright purchase. Tax was to be withheld at 10 per cent apart from surcharge.
Indian cargo agents pay our Singapore company a subscription for a password to use our air-cargo booking portal, which sits on our servers in Singapore. Is that taxable in India? Yes. The Authority ruled that the payments made by Indian subscribers to Cargo Community Network Pte. Ltd. for a password to access and use its Ezycargo portal, hosted on servers in Singapore, were taxable in India and subject to deduction of tax at source. The portal and the server together were held to be integrated commercial-cum-scientific equipment which the Indian agents used in India, so the subscription was royalty under article 12(3)(b) of the India-Singapore agreement. The training and help-desk support supplied through the applicant's Chennai liaison office were fees for technical services under article 12(4), being ancillary to the enjoyment of the equipment. The ruling binds only that applicant.
Our Luxembourg company collects a share of an Indian hotel's revenue to fund worldwide marketing, all of it done abroad. Is that money taxable in India? Yes. The Authority ruled that the contributions were taxable in India. It refused to treat them as reimbursements: the 1.5 per cent of gross hotel revenue and the 3.4 per cent of Marriott Rewards room charges were contractual charges with no direct nexus to the applicant's actual costs, the programmes benefited the whole chain, and any excess was retained. There was a business connection under section 9(1)(i), the twenty-five year participation agreement showing a real and intimate relation with the owner's Indian hotel and continuity rather than an isolated dealing. The services were also managerial and consultancy services within Explanation 2 to section 9(1)(vii), and the exception for services used outside India did not apply.
Our Austrian parent seconds its technical staff to us and we repay it exactly what their salaries cost. The staff work under our control. Must we withhold tax under section 195 on that repayment? Yes. The Authority ruled that the payments A.T. and S. India made to AT&S Austria under a secondment agreement, described as reimbursement of the salary cost of seconded personnel, were subject to withholding under section 195. AT&S Austria remained the real employer: it could recall and replace the personnel, they would return to it after the assignment, and the Indian company could not exceed the salaries it fixed. The payments were consideration for the provision of services of technical or other personnel and so were fees for technical services within Explanation 2 to section 9(1)(vii) and article 12(4) of the India-Austria agreement. The ruling binds only that applicant.
My Swiss company is assigning its rights under an Indian supply agreement to a new Indian subsidiary and the deed is signed in Switzerland. Is the assignment fee taxable in India? No. The Authority ruled that the consideration for assigning the turbocharger development and supply agreement did not accrue or arise in India. The assignment was a transaction distinct from the work under the supply agreement itself; the applicant had no business connection in India in respect of it; the deed was executed in Switzerland on 23 February 2006 and the consideration was payable outside India. Nor was the receipt royalty: none of the clauses of Explanation 2 to section 9(1)(vi) was attracted, because the agreements concerned the supply of a product and transferred no patent, know-how or technical information. The second question did not survive, and with nothing chargeable, section 195 did not apply.
Our US parent charges us only its actual cost for services it performs in America, with no mark-up. Must we still withhold tax under section 195? Yes. The Authority ruled against the applicant on every live question. Timken India paid its US parent USD 756,728.26 under an agreement of 2 August 2000 for management, system development, engineering and manufacturing services performed wholly in the United States, the compensation being confined to actual cost with no mark-up. The Authority held the sum was not a reimbursement of costs; that it was taxable as fees for technical services under article 12 of the India-US convention though the services were rendered abroad; that the absence of a profit element was irrelevant; and that no net-basis option could be read into section 44D. Withholding was required.
A US firm did a feasibility study for us, but it is paid directly out of a US government grant, not by us. Is the fee taxable in India, and must we deduct tax? No. The Authority ruled that the payments to Innovative Solutions International Inc of Virginia were not taxable in India, either under the Act or under the agreement with the United States. The study for the applicant's communication, navigation and surveillance and air traffic management project was prepared in the United States; the firm had no office or establishment in India and its work here was confined to some meetings with the applicant's officials and coordination with local vendors. Decisively, the money was payable only by the US Trade and Development Agency out of its grant of US$450,600, and the firm had no remedy against the applicant if the Agency did not pay.
We pay our Singapore group company a share of its regional costs for market research and management advice. If there is no profit in it, must we still deduct tax under section 195? Yes. The Authority ruled that the payments to Danfoss Singapore would be subject to withholding under section 195. It accepted the common ground that section 195 applies only where the amount is income of the payee and not a mere reimbursement of cost, but held that these payments were not reimbursements. The fee was worked out by an allocation key based on each group company's budgeted turnover, weighted for growth rate and market maturity, so there was no direct nexus between what Danfoss Singapore actually spent in serving the applicant and what the applicant paid. Even if the total matched the cost, that would be a quid pro quo for the service fees and not a reimbursement of expenses.
We pay commission and a retainer to agents in France, Canada and the USA who find export orders for our software. None of them sets foot in India. Do we deduct tax? No, as the law stood. The Authority ruled that no tax was deductible at source under section 195 on the commission and retainer fees payable to the three non-resident agents. All three operated outside India and had no office or operations here; the applicant earned its foreign exchange by exporting software, and after the receipts came into India the agents were paid their fees and commission abroad. The Commissioner himself relied on the Board's Circular No. 23 of 23 July 1969, under which no part of the income would arise in India where the non-resident agency operated outside the country, and on Circular No. 786 of 7 February 2000. The Authority adopted that reasoning and ruled accordingly.
We have credited royalty and management fees to our Swedish and Swiss group companies in our books but remitted nothing. Do we have to deduct tax now, or only when we pay? Yes, now. The Authority ruled that section 195(1) is triggered when the amounts are credited to the non-resident's account in the payer's books, not only when they are remitted. The subsection operates at the time of credit of the income to the account of the payee or at the time of payment, whichever is earlier, and whether the money has actually gone out is irrelevant to the duty. It also held that the royalties and management service fees were taxable in India under the Act, article 12 of the Swedish and Swiss agreements permitting India to tax them according to its own laws, and that requiring deduction on credit does not defeat or render the agreement otiose.
The State government paying our consultancy fee is deducting tax at 42.85 per cent when the India-UK treaty caps technical fees at 15 per cent, and it - not we - has already gone to the Assessing Officer under s.195(2). Can we still get an advance ruling on the rate? Yes on maintainability, and yes on the rate. The Authority held the application maintainable because the s.195(2) reference had been made by the Government of Orissa as payer, not by the applicant, so nothing was pending in the applicant's own case within clause (a) of the proviso to s.245R(2). On the substance it held the receipts were fees for technical services and that deduction was to be made at 15 per cent of the gross amount under article 13 of the India-UK agreement, not at the 42.85 per cent the Income-tax Officer (TDS) had arrived at. It refused to rule on whether the sums routed through the applicant to its Indian sub-consultant were its income at all - that was a question of fact for the Assessing Officer. The ruling binds only Hyder Consulting.
Indian operators are about to deduct 55 per cent from what they pay my Swedish company for installing a GSM network. Can they deduct on my thin net margin instead? No, not on the margin, though the rate came down. The Authority ruled that the Indian companies should not withhold at 55 per cent but at 30 per cent, the rate applicable to such payments under the Finance Act 1995. It refused the applicant's case that only its net profit from local operations, said to be not more than 10 per cent of receipts, could be taxed. The receipts being fees for technical services and the agreements having been made after 31 March 1976, section 44D(b) barred any deduction for expenditure or allowance, and the entire gross receipts fell to be taxed at 30 per cent under section 115A. The net profit question was left open.
Do I still have to run the compliance check and deduct at the higher non-filer rate, and does my client still have to collect TCS on his sales of goods? No to both, for anything on or after 1 April 2025. Section 206AB and section 206CCA were omitted by the Finance Act 2025 with effect from 1 April 2025 and no longer exist. Section 206C(1H) has not been omitted from the statute book, but a third proviso inserted by the Finance Act 2025 provides that nothing contained in that sub-section shall apply from 1 April 2025, and the department's own guidance states that the provisions of s.206C(1H) are not applicable from that date and that s.194Q applies to the sale of goods.
Is there one document that tells the payroll department how to deduct on salary for the year? Yes. The Board issues an annual circular under s.192 and this is the one for financial year 2024-25. It consolidates the rates, the amendments made by the Finance Acts of 2023 and 2024, and the mechanics of the employer's deduction, and states that where no amendment has been made the position in the earlier circular for financial year 2022-23 continues.
The platform says it need not deduct on every small withdrawal, and that my bonus counts as a deposit. Where does that come from? It comes from this circular, issued under s.194BA(3) on the same day Rule 133 was notified. It allows the deductor to skip deduction on a withdrawal where the net winnings in it do not exceed Rs 100 in a month, provided the tax is picked up later and the deductor stands behind it; it treats a bonus, referral bonus or incentive as a taxable deposit, unless it is credited only for playing and cannot be withdrawn; it requires every user account of the same user on a platform to be aggregated; and it fixes how winnings in kind are valued, excluding GST.
I'm giving dealers free samples and discounts. Do I have to deduct TDS under s.194R? Discounts, cash discounts and rebates allowed to a customer are outside s.194R; free samples and incentives such as sponsored trips and free tickets are not. And you cannot refuse to deduct on the ground that the benefit is not taxable in the recipient's hands — the Board's position is that tax must be deducted in all cases, whatever the nature of the benefit.
My client is 78, has only pension and interest from the same bank, and does not want to file a return. Does s.194P get him out of filing, and what does the bank need from him? Yes, but only if every condition is met, and the relief is a consequence of the bank's deduction and not of the client's age. Section 194P(2) provides that s.139 shall not apply to a specified senior citizen for the assessment year relevant to the previous year in which tax has been deducted under sub-section (1) — so if the bank does not compute and deduct, the return obligation remains. Sub-section (1) requires a 'specified bank' to compute the total income after giving effect to Chapter VI-A deductions and the s.87A rebate and to deduct tax on that total income at the rates in force, and the Explanation confines a 'specified senior citizen' to a resident individual aged seventy-five or more at any time during the previous year, whose income consists of pension and no other income except interest received or receivable from an account maintained by him in the SAME specified bank in which he receives his pension, and who has furnished the prescribed declaration to that bank.
Our purchase attracts both 194Q and 206C(1H). Do we deduct as buyer or does the seller collect? The buyer deducts. Where both provisions are capable of applying to the same transaction, the buyer's obligation under s.194Q prevails and the seller need not collect under s.206C(1H); if the seller has already collected before the buyer deducts, the transaction is not taxed twice, both rates being 0.1%.
Is there anything binding on the assessing officer that stops him enforcing a demand caused by my deductor's failure to deposit? Yes. The Board told field officers in terms that s.205 bars a direct demand where tax has been deducted from the assessee's income, and that a demand on account of tax credit mismatch cannot be enforced coercively. It had to say it twice — the 2016 Office Memorandum was issued because officers were not following the 2015 letter.
Form 26AS does not show my TDS but I hold the deductor's certificate. Must the officer still verify and give me credit? Yes. Issued to give effect to the Delhi High Court's directions in Court On Its Own Motion v. CIT [2013] 352 ITR 273 (Delhi), the Instruction tells the assessing officer that where the assessee produces the TDS certificate as evidence against a mismatched amount, the officer must verify whether the deductor has paid the tax into the Government account and, if he has, give the credit. The Allahabad High Court has since decided a refund case on the strength of it.
We pay cooling charges to a cold storage for our stock. Is that rent under s.194-I at 10%? No. The main function of a cold storage is preservation of perishable goods by a mechanical process and storage is only incidental; the customer gets no right to use any demarcated space or the machinery and does not become a tenant. Section 194-I does not apply, and the Board has directed that s.194C applies to the cooling charges instead.
We book hotel rooms through the year for staff and guests. Is that rent under s.194-I? It depends on the agreement, not on the volume. Where earmarked rooms are let out for a specified rate and a specified period, that is accommodation taken on a regular basis and s.194-I applies. Where the arrangement is a rate contract - specified types of rooms at pre-determined rates, with no obligation on the hotel to provide a room - s.194-I does not apply.
Nothing here is written from memory. Every entry was found through a search, and the page for it links to where it was found, so you can check it rather than take our word for it. What has not happened yet is the part that matters most: nobody has read the certified copy of each judgment and signed off the summary against it. Until that is done, each page says Not yet CA-verified, and it means exactly what it says. Read the source before you rely on an entry in a reply to an Assessing Officer or in an appeal.