Income-tax Act,1961
Act No : 43
Section :
Persons deducting tax to furnish prescribed returns.
1[206. Persons deducting tax to furnish prescribed returns 2The 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 under the foregoing provisions of this Chapter 3[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, such returns in such form and verified in such manner and setting forth such particulars as may be prescribed.] 4[206A. Person paying interest to residents without deduction of tax, to furnish prescribed return Any person responsible for paying any income referred to in section 194A shall prepare, and within thirty days from the 31st day of March in each year, deliver or cause to be delivered to the 5[Assessing] Officer in the prescribed form and verified in the prescribed manner, a return in writing showing- (a) the name and address of every person who has furnished to him an affidavit or a statement under the proviso to sub- section (1) of section 194A; (b) the amount of the income credited or paid during the financial year to each such person and the time or times at which the same was credited or paid, as the case may be; and ---------------------------------------------------------------------- 1 Substituted by the Finance Act, 1987, w.e.f. 1-6-1987. Prior to the substitution, section 206, as amended by the Finance Act, 1965, w.e.f. 1-4-1965, read as under. "206. Person paving salary to furnish prescribed return.-(I) The prescribed person in the case of every office of the 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, and every private employer shall prepare, and within thirty days from the 31st day of March in each year, deliver or cause to be delivered to the Income-tax Officer in the prescribed form and verified in the prescribed manner, a return in writing showing- (a) the name and, so far as it is known, the address of every person who was receiving on the 31st day of March, or has received or to whom was due during the year ending on that date, front the Government, company, authority, body, association or private employer, as, the case may be, any income chargeable under the head "Salaries" of such amount as may be prescribed; (b) the amount of the income so received by or so due to each such person, and the time or times at which the same was paid or due, as the case may be; (c) the amount deducted in respect of income-tax from the income of each such person. (2) Where an employer deducts from the emoluments paid to an employee or pays on his behalf any contributions of that employee to an approved superannuation fund, he shall include all such deductions or payments in the return which he is required to furnish under this section." 3 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. 4 Inserted by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1967. 5 Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. ----------------------------------------------------------------------- 1.644 (c) such other particulars as may be prescribed.] 1[206B. Person paying dividend to certain residents without deduction of tax to furnish prescribed return 2 Any person responsible for paying any dividend referred to in section 194 shall prepare, and within thirty days from the 31st day of March in each year, deliver or cause to be delivered to the 3[Assessing] Officer in the prescribed form and verified in the prescribed manner, a return in writing showing- (a) the name and 'address of every person who has furnished to him a statement under the first proviso to section 194; (b) the amount of the dividend paid or distributed during the financial year to each such person; and (c) such other particulars as may be prescribed.] 4[BB.-Collection at source 5 206C. Profits and gains from the business of trading in alcoholic liquor, forest produce, scrap, etc6 7[(1) Every person, being a seller shall, at the time of debiting of the ---------------------------------------------------------------------- 1 Inserted by the Finance (No. 2) Act, 1977, w.e.f. 1-10-1977. 2 See rule 37B and Form No. 27B. 3 Substituted for 'Income-tax' by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 4 Inserted by the Finance Act, 1988, w.e.f. 1-6-1986. 7 Substituted by the Finance Act, 1992, w.e.f. 1-4-1992. Prior to the substitution, subsection (1) read as under: "(1) Every person, being a seller referred to in section 44AC, shall, at the time of debiting of the amount payable by the buyer refer-red to in that section 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 on income comprised therein. Table ---------------------------------------------------------------------- S. No. Nature of goods Percentage (1) (2) (3) ---------------------------------------------------------------------- (i) Alcoholic liquor for human consumption (other than Indian made foreign liquor) Fifteen per cent (ii) Timber obtained under a forest lease Fifteen per cent (iii) Timber obtained by any mode other than Five per cent under a forest lease (iv) Any other forest produce not being timber Fifteen per cent: ------------------------------------------------------------------------- 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 refer-red 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." Earlier, the italicised word was substituted for "Ten" by the Direct Tax Laws (Amendment) Act, 1989, w.r.e.f. 1-6-1988. ----------------------------------------------------------------------- 1.645 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. Table ----------------------------------------------------------------------- S.No. Nature of goods Percentage (1) (2) (3) ------------------------------------------------------------------------ (i) Alcoholic liquor for human consumption (other than Indian-made foreign liquor) Fifteen per cent (ii) Timber obtained under a forest lease Fifteen per cent (iii) Timber obtained by any mode other than a under forest lease Five per cent (iv) Any other forest produce not being timber Fifteen per cent: ---------------------------------------------------------------------- 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 subsection shall not apply so long as the certificate is in force.] (2) The power to recover tax by a collection under sub-section (1) shall be without prejudice to any other mode of recovery. (3) Any person collecting any amount under sub-section (1) shall pay within seven days the amount so collected to the credit of the Central Government or as the Board directs. (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. (5) Every person collecting tax in accordance with the provisions of this section shall within ten days from the date of debit or receipt of the amount furnish to the buyer 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. 1 2[(5A) Every person collecting tax in accordance with the provisions of this section shall prepare half-yearly returns for the period ending on 30th September and 31st March in each financial year, and deliver or ---------------------------------------------------------------------- 2 Inserted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. ---------------------------------------------------------------------- 1.646 cause to be delivered to the prescribed income-tax authority' such returns in such form and verified in such manner and setting forth such particulars and within such time as may be prescribed. 2] (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). (7) Without prejudice to the provisions of sub-section (6), if the seller 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 two 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. (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 seller.] 3[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,- (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; (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 cooperative society.], 3 Inserted by the Finance Act, 1992, w.e.f. 1-4-1992. ----------------------------------------------------------------------- 1.647 (vi) Any other forest produce not being timber. Fifteen per cent. These tax rates have to be increased by surcharge at the rate of 15 per cent where the buyer is a domestic company and 12 per cent in the case of other buyers. These provisions will apply only at the point of the first sale of such goods. Where the goods are meant for manufacturing, processing or producing articles and things and not for trading, a certificate could be obtained from the Assessing Officer and so long as such certificate remains in force section 206C(1) would not apply. The deducted tax should be paid to the credit of the Central Government within a week. The person deducting the tax should furnish a tax deduction certificate in Form 27D. A half-yearly return of tax, deducted should be filed for the periods ending 30th September and 30th March and failure to file these returns is punishable. [Circular No. 660, dated 15th September, 1993] 2. The term 'buyer' in section 206C does not include (i) a public sector company; (ii) a buyer in the future 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] 3. 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] 4. 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] C.-Advance payment of tax
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