731/CBDT. - Income Tax - 731/CBDT

INSTRUCTION NO. 731/CBDT Dated : August 8, 1974 Section(s) Referred: 203 ,206 Statute: Income - Tax Act, 1961 Under Section 206 of the Income-tax Act, 1961, persons specified under Rule 36 of the IT Rules, 1962, are required to furnish an annual return of tax deducted at source from salaries paid to the employees in Form No.24 prescribed under Rule 35 of the Income-tax Rules. This prescribed return is to be delivered to the Income Tax Officer specified in Rule 35(2) read with rule 32(2) of the IT Rules within thirty days from 31st day of March of each year. 2. Under section 203 of the IT Act, persons deducting tax from salary paid to the employees are required to give a certificate of tax deducted at source as required in Rule 31 (1) in Form No.16 of the IT Rules. This certificate enables the employees to prove their claim of tax having been deducted at source. 3. I am directed to say that various instances have come to the notice of the Board where the amount of income chargeable under the head "Salaries" and amount of tax deducted therefrom as shown in Form No.16 not only did not tally, but differed materially, with the amounts shown in the annual return under Section 206 submitted in Form No.24. On a careful scrutiny, some certificate filed before the ITO were found to be bogus. Had the income-tax officers not been careful enough in getting the tally made of the figures in the certificate with figures in the annual return, Revenue would have suffered a huge loss. 4. Necessary instructions may kindly be issued to all the ITOs working in your charge to scrutinise the claim of tax deduction at source from salaries with reference to return under Section 206 before allowing the claim of refund.