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45. Amendment of section 206C. |
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In section 206C of the Income-tax Act,
(a) for sub-section (4), the following sub-section shall be substituted, namely:
(4) Any amount collected in accordance with the provisions of this section and paid to the credit of the Central Government shall be deemed to be a payment of tax on behalf of the person from whom the amount has been collected and credit shall be given to such person for the amount so collected in a particular assessment year in accordance with the rules as may be prescribed by the Board from time to time.";
(b) in sub-section (5), in the first proviso, for the figures, letters and words "1st day of April, 2008", the figures, letters and words "1st day of April, 2010" shall be substituted.
Clause 45 seeks to amend section 206C of the Income-tax Act, relating to profits and gains from the business of trading in alcoholic liquor, forest produce, scrap, etc.
Sub-section (4) of the said section provides that any amount collected in accordance with the provisions of said section and paid to the credit of the Central Government shall be deemed as payment of tax on behalf of the person from whom the amount has been collected and credit shall be given to him for the amount so collected. The said sub-section also requires production of certificate of tax collected at source for giving credit to the person from whom the amount has been collected. The proviso to the said sub-section (4) provides that after 1st April, 2008 credit shall be given on the basis of annual statement referred to in the second proviso to sub-section (5) of the said section and a certificate of collection of tax is not required to be produced along with the return of income for claiming credit for tax collected at source.
The method of allowing credit to the assessee for tax collected at source needs a certain degree of flexibility considering the ongoing technological and business process changes. Therefore, the proposed amendment seeks to substitute the said sub-section (4) to provide that any amount collected in accordance with the provisions of this section and paid to the credit of the Central Government shall be deemed to be a payment of tax on behalf of the person from whom the amount has been collected and credit shall be given to such person for the amount so collected in a particular assessment year in accordance with the rules as may be prescribed by the Board from time to time.
The existing provisions of first proviso to sub-section (5) of the said section provide that on or after 1st April, 2008, there would be no requirement of furnishing a certificate of collection of tax at source.
The proposed amendment substitutes the said date with 1st April, 2010 so as to provide that up to 31st March, 2010 the person who collects tax shall continue to furnish a certificate of tax collected at source to the person from whom the amount has been collected.
These amendments will take effect from 1st April, 2008.
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