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

Under section 390 of the Income-tax Act, 2025, tax deducted at source and paid to the Central Government is treated as payment of tax on behalf of which person?

Tax deducted at source and deposited is treated as tax paid on behalf of the person from whose income it was deducted. Section 390(5) gives credit to that deductee, not to the deductor who remitted the amount to the Central Government.

  1. AThe person from whose income the tax has been deductedCorrect
  2. BThe deductor who deposited the tax
  3. CThe person whom the Board nominates each year
  4. DThe recipient of the next payment from the deductor

Explanation

Section 390(5) states that tax deducted or collected and paid to the Central Government is treated as payment of tax on behalf of the person from whose income it was deducted, or from whom it was collected, or in respect of whose income it was paid. The deductor merely deposits it and is not the person credited.

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