Rule 203 - Credit for tax deducted or collected at source

Tax deduction/collection credit application. 203. (1) Credit for tax deducted at source or tax collected at source shall be given, on the basis of information furnished by the deductor or collector to the income-tax authority (or the person authorised by such authority), in the following manner— (a) tax deducted at source and paid to the Central Government under Chapter XIX of the Act shall be given to the person to whom payment has been made or whose account has been credited (the deductee); and (b) tax collected at source and paid to the Central Government under Chapter XIX shall be given to the person from whom tax has been collected or whose account has been debited (the collectee). (2) Where the deductee or collectee files a declaration that the relevant income is assessable in the hands of a different person, the deductor or collector shall report the deduction or collection against that other person's name, and credit shall be given to that other person instead of the deductee or collectee. (3) Such a declaration shall contain the name, address, and Permanent Account Number of the other person, details of the relevant payment or credit, and the reasons for giving credit to that person, and shall be kept in the deductor's or collector's custody. (4) The deductor or collector shall issue the tax deduction/collection certificate to the person in whose name credit is shown, and shall keep a copy of the certificate of deduction in his own custody. (5) Credit for tax deducted or collected and paid to the Central Government shall be given for the tax year in which the corresponding income is assessable to tax. (6) Where the tax deducted relates to income assessable across a number of years, credit shall be allowed across those years in the same proportion as the income is assessable; similarly, where tax collected relates to a lease or licence spanning more than one year, credit shall be allowed across those years in the same proportion. (7) Notwithstanding sub-rules (1) to (6), for the purposes of section 393(3) and section 394(1), credit for tax deducted or collected shall be given to the person from whose account the tax was deducted or collected, for the tax year in which such deduction or collection was made. (8) Credit for tax deducted or collected shall be granted based on the information referred to in sub-rule (1) together with the claim made in the return of income, subject to verification in accordance with the Board's risk management strategy from time to time.