♣ Who does not want money in advance? – Everyone. Significant amendments are made every year in Income tax Act while declaring budget and major amendments are made in TDS section because government wants payment of taxes in advance and TDS is tool which aims to collect tax from the very source of income. TDS allows govt. to receive taxes in advance and also helps in regulating filing of income tax returns.

The scope of TDS/TCS has been increased mainly to all the sources of income, be it salary, rent, capital gains on sale of property, interest, technical and professional services and many more. In budget 2020, it has also been extended to e-commerce transactions and foreign tax remittances also.

In normal course liability to deduct TDS is imposed on person making payment for consumption of services or goods i.e. deductor. If deductor does not deducts TDS than he shall face interest, penalty and prosecution proceedings.

But assessee is also not relieved from payment of taxes if TDS has not been deducted by deductor. Every person has to do his work with honesty whether other person does or not. You are always required to declare correct income whether TDS has been deducted by other person or not.

♣ Section 191 provides that assessee shall pay tax directly where TDS has not been deducted by deductor. If assessee does not pays taxes directly than assessee shall also be treated as assessee in default u/s 201 and interest shall be levied subsequently.

For Eg: Ms. Divya works as Manager in M/s. XYZ Private Limited. Company pays her salary of Rs.10,00,000/- yearly. Here company is required to deduct TDS at the time of making payment of salary to Ms. Divya and issue Form-16. But if company does not deducts TDS than Ms. Divya is under obligation to declare income and pay taxes even if employer does not deducts TDS. It is therefore necessary that taxpayer should always declare correct income and file return.

Case law-To declare a deductor who has failed to deduct tax at source, as an assessee in default condition precedent is that assessee-deductee has also failed to pay tax directly.


The concept of TDS was introduced with an aim to collect tax from the very source of income. In many cases it have been seen that person does not files return of income because they think that tax has already been deducted and deposited to credit of Central Govt. due to which they receive income tax notice for not filing return of income. It is therefore necessary that every person should declare income and file return of income timely with the help of an expert.


The above comments do not constitute professional advice. The Author can be reached at [email protected] or visit website www.financialtreecompany.com . My name is CA Divya Agrawal and I am Practising Chartered Accountant, CEO and Founder of FINANCIAL TREE COMPANY (An online return filing and Tax Consultancy Company) where we have taken an initiative that allows person to Pay from Heart. We also upload educational videos in You tube and name of our channel is FINANCIAL TREE COMPANY. Our aim is to help people in improving their financial health by spreading knowledge and love. Stay Financially Fit and Healthy.


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  1. Divya Agrawal says:

    One has to make sure whether TDS has been deducted or not. If not deducted than he will have to see whether there is requirement to pay advance tax. At the year end after computing income he will have to pay self assessment tax, if required and file return necessarily.

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January 2021