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

Sunrise Traders Pvt Ltd, a company that is not a Government entity, deducted tax at source for the first time in July. It had not applied for a tax deduction and collection account number before deducting. Under the Income-tax Rules, 2026, by when must it apply for the number (Form No. 135) if it relies on the late-application window?

The company must apply within thirty days from the end of the month in which tax was deducted. The rules require application before deduction, but if that was missed, the window runs from month-end, not from the date of deduction or from quarter-end.

  1. AWithin thirty days from the end of the month in which the tax was deductedCorrect
  2. BWithin thirty days from the date of deduction
  3. CWithin fifteen days from the end of the quarter in which tax was deducted
  4. DWithin sixty days from the end of the financial year

Explanation

Rule 216(4) requires the application prior to deduction or collection. Where that was not done, it must be made within thirty days from the end of the month in which tax was deducted or collected. Deduction was in July, so the deadline is thirty days after 31 July. Counting from the date of deduction is wrong because the period runs from month-end.

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