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CMA Intermediate · Direct and Indirect Taxation · Tax Deducted at Source and Tax Collected at Source

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

Such tax is treated as a payment on behalf of the person from whose income it was deducted or from whom it was collected. The deductor or collector merely remits it to the Government, so the credit belongs to the taxpayer whose income or purchase was involved.

  1. AThe person from whose income the tax was deducted, or from whom it was collectedCorrect
  2. BThe deductor or collector who remitted it to the Government
  3. CThe Principal Commissioner of the area concerned
  4. DThe payee's employer, in every case

Explanation

Section 390(5) provides that tax deducted or collected at source 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. The deductor or collector only acts as a conduit and does not get credit for it.

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