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

Ganga Foods Ltd failed to deduct tax on a payment, but obtained an accountant's certificate that the payee had paid the tax. Under Rule 221 of the Income-tax Rules, 2026, which statement is correct about the certificate and its furnishing?

Form 149 is used for non-deduction or short deduction, and it must be furnished to the Director General of Income-tax (Systems) or the person authorised by him. Form 150 is meant for non-collection or short collection of tax.

  1. AForm 149 for non-deduction or short deduction, furnished to the Director General of Income-tax (Systems) or person authorised by himCorrect
  2. BForm 150 for non-deduction or short deduction, furnished to the Assessing Officer
  3. CForm 149 for non-collection or short collection, furnished to the Assessing Officer
  4. DForm 150 for non-deduction or short deduction, furnished to the Director General of Income-tax (Systems)

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 other options mix up the forms or the recipient.

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