Section 40(a)(iv) - Provident Fund payment without Tax deduction at Source - Income Tax - Ready Reckoner - Income Tax

Section 40(a)(iv) : Provident Fund payment without Tax deduction at Source Any payment to a provident fund is not deductible if the assessee has not made effective arrangements to secure that tax shall be deducted at source from any payments made from the fund which are chargeable to tax under the head Salaries . Where in the case of a provident fund established by a company, by creating a trust, the management of the company had drawn the attention of the secretary of the trust to the requirements of the Income Tax Act, for deduction of tax at source and the secretary had confirmed that the requirements would be complied with, it was held that this constituted effective arrangement contemplated in section 40(a)(iv) . [ CIT, DELHI VERSUS DELHI CLOTH AND GENERAL MILLS COMPANY LIMITED [ 1980 (5) TMI 19 - DELHI HIGH COURT ]