INCOME TAX

Clarification regarding certificate for deduction of tax made by Central Government Departments who are making payments by book adjustments

Circular 749

Dated 27/12/1996

Under the provisions of section 203, the Drawing and Disbursing Officers (DDOs) of various Central Government Departments are deducting tax from payments made to its employees, contractors, etc. The taxes so deducted are being paid into Government account by book adjustment. Consequently, the TDS certificates issued by such DDOs do not carry details like challan numbers, dates of payments into Government account, etc. For these reasons, the same are being rejected by the Assessing Officers and this is creating hardship for the assessees.

The Board has considered the issue and decided that the TDS certificates issued by Central Government Departments should be accepted by Assessing Officers if it indicates that credit has been afforded to the Income-tax Department by book adjustment and the date of such book adjustment is indicated therein. The certificate, in any case, should be genuine.

In case of doubt about genuineness of such TDS certificates, the Assessing Officers are free to correspond with the DDOs of such Central Government Departments and the latter are bound to offer facility for examination of their payments made to Central Government account by book adjustment.

Further, all such DDOs issuing certificates where credit is shown by book adjustment, must obtain a TAN (Tax Account Number) from the jurisdictional I.T. authority/Officer in-charge of TDS matters; and must also file their Annual Return of TDS to the jurisdictional officer in charge of TDS. The TAN must be quoted on the TDS certificates issued, showing payment by book adjustment.

Circular: No. 749, dated 27-12-1996.