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CMA Final · Direct Tax Laws and International Taxation · Black Money Act, 2015

Under section 32(1) of the Black Money Act, the Assessing Officer or Tax Recovery Officer requires the employer of an assessee to deduct tax arrear from payments to the assessee. Which statement is correct?

Any part of the salary that is exempt from attachment in execution of a civil court decree under section 60 of the Code of Civil Procedure, 1908 is exempt from the employer requisition. Either the Assessing Officer or the Tax Recovery Officer may issue it, and the employer must comply.

  1. ASalary is wholly liable to deduction, with no exemptions
  2. BAny part of the salary exempt from attachment in execution of a civil court decree under section 60 of the Code of Civil Procedure, 1908 is exempt from the requisitionCorrect
  3. COnly the Tax Recovery Officer, and not the Assessing Officer, may issue the requisition
  4. DThe employer may ignore the requisition if the assessee objects

Explanation

Section 32(1) lets the AO or TRO require the employer to deduct, and section 32(2) obliges the employer to comply and remit. Section 32(3) exempts any part of salary that is exempt from attachment under section 60 of the Code of Civil Procedure, 1908. Therefore salary is not wholly open to deduction, and the requisition may come from either officer.

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