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

Kapoor Industries Ltd failed to deduct tax on a payment to a resident vendor, and later obtained a certificate from an accountant to avoid being treated as an assessee in default. It also failed to collect tax at source on a sale of scrap to a buyer. Which pair of forms must be used for the two certificates under Rule 221 of the Income-tax Rules, 2026, and to whom are they furnished?

Form No. 149 is used for the accountant's certificate on non-deduction or short deduction, and Form No. 150 for non-collection or short collection. Both are furnished to the Director General of Income-tax (Systems) or the person he authorises, under Rule 221.

  1. AForm No. 149 for non-deduction and Form No. 150 for non-collection, furnished to the Director General of Income-tax (Systems) or person authorised by himCorrect
  2. BForm No. 150 for non-deduction and Form No. 149 for non-collection, furnished to the Director General of Income-tax (Systems)
  3. CForm No. 149 for both, furnished to the Assessing Officer
  4. DForm No. 143 for non-deduction and Form No. 150 for non-collection, furnished to the Principal Commissioner

Explanation

Rule 221(1) prescribes Form No. 149 for non-deduction or short deduction and Form No. 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. Swapping the forms or naming the Assessing Officer contradicts these provisions.

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