Section 192 deals with the deduction of tax at source. It is computed on the estimated income of the assessee under the head salary and the liability is at the time of payment of salary, if there is a perquisite, there is responsibility to deduct tax of the employer under section 192(1), 192(1A) and 192(1B). Perquisite is actually not a payment of salary but a benefit not in terms of money. There was no provision initially to deduct tax at source. It is provided by section 192(1B) by the Finance Act, 2002 with effect from 1-6-2002 and as to computation of income of perquisite, the provision in section 192(1A), also by the same Act with effect from the same date. This tax, at the option of the assessee, can be paid on the whole or part of such income without making any deduction there from at the time when it was otherwise deductible under section 192. A duty is also cast upon the person deducting tax under section 200. Rule 3 of Income-tax Rules, 1962 provides for the time and mode of payment to the Government account of tax deducted at source. As per the provisions of section 200, the tax deducted at source is a mode of payment of tax on the income of the person on whose income it is deducted i.e. employees in this case.
The issue raised by the assessee is squarely covered by the decision of the Bombay High Court in the case of Western Coal Field [IT Appeal Nos. 93 to 108 of 2008, dated 1-10-2010].
The Revenue Department has asked its officials to take action against those entities which do not promptly deposit with exchequer the tax they collect at source.
“The CBDT has taken serious view of non-filers (of tax deducted at source) and has incorporated a new section 234E in the Act which levies a fee of Rs 200 for everyday of delay and the system does not accept the TDS statement until the delay fee has been paid,” Chief Commissioner Income Tax, Delhi-1, M Sailo said at an ASSOCHAM event here.
The Central Board of Direct Taxes (CBDT) has taken serious note of defaulters and has ordered launch of prosecution in appropriate cases, she said.
TDS accounts for 55 per cent of total direct tax collections. Direct tax collections in 2011-12 was about Rs 4.95 lakh crore and in 2012-13 the target has been fixed at Rs 5.70 lakh crore.
She said the tax deductors with a strong tendency of holding back taxes deducted deprives the government of its much needed taxes.
Talking about the computerization of processes, Sailo said the administration is facing teething problems and asked the assesses to be patient during this course of transition.
Clarification regarding applicability of provisions of Section 194-I to payments made by the customers on account of cooling charges to the cold storage owners.
Representations have been received from various quarters regarding applicability of the provisions of Section 194-I to cooling charges paid by the various customers to the owners of cold storages.
1. It has been represented that the cold storage owners provide a composite service, which involves preservation of essential food items including perishable goods at various temperatures suitable for specific food items for required periods and storage of goods being incidental to the activity of preservation. The cooling of goods is controlled through mechanical process. The customer brings its packages for preservation for a required period and takes away its packages after paying cooling charges. The customer does not hire the building, plant/machinery etc. in any manner and does not become a tenant of any kind.
2. The matter has been examined. The main function of the cold storage is to preserve perishable goods by means of a mechanical process, and storage of such goods is only incidental in nature. The customer is also not given any right to use any demarcated space/place or the machinery of the cold store and thus does not become a tenant. Therefore, the provision of 194-I is not applicable to the cooling charges paid by the customers of the cold storage.
3. However, since the arrangement between the customers and cold storage owners are basically contractual in nature, the provision of section 194-C will be applicable to the amounts paid as cooling charges by the customers of the cold storage. This may be brought to the notice of the Assessing Officers under your charge.