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CA Final · Direct Tax Laws & International Taxation · Deduction, Collection and Recovery of Tax

Beta Ltd failed to deduct tax on a payment to a resident and obtained a certificate from an accountant under section 398(2) for non-deduction. Separately, Gamma Ltd failed to collect tax at source and also wants an accountant's certificate. Under Rule 221 of the Income-tax Rules, 2026, which statement is correct?

Beta uses Form No. 149 for non-deduction and Gamma uses Form No. 150 for non-collection. Both are furnished to the Director General of Income-tax (Systems) or the person authorised by him, as Rule 221 provides, not to the Assessing Officer.

  1. ABeta uses Form No. 149 and Gamma uses Form No. 150, each furnished to the Director General of Income-tax (Systems) or a person authorised by himCorrect
  2. BBeta uses Form No. 150 and Gamma uses Form No. 149, each furnished to the Assessing Officer
  3. CBoth use Form No. 149, furnished to the Director General of Income-tax (Systems)
  4. DBeta uses Form No. 149 and Gamma uses Form No. 150, each furnished to the Assessing Officer

Explanation

Rule 221(1) prescribes Form 149 for non-deduction or short deduction and Form 150 for non-collection or short collection. Rule 221(2) requires furnishing to the Director General of Income-tax (Systems) or the person authorised by him. The options sending it to the Assessing Officer or swapping the forms are wrong.

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