Monday 9 January 2017

Section-46. Tax deduction at source

                 Section-46.                                       Tax deduction at source


(1) Notwithstanding anything contained to the contrary in this Act, the Central or a
State Government may mandate, -

(a) a department or establishment of the Central or State Government, or
(b) Local authority, or
(c) Governmental agencies, or
(d) such persons or category of persons as may be notified, by the Central or a State
Government on the recommendations of the Council,
[hereinafter referred to in this section as the deductor], to deduct tax at the rate
of one percent from the payment made or credited to the supplier [hereinafter
referred to in this section as the deductee] of taxable goods and/or services,
notified by the Central or a State Government on the recommendations of the
Council, where the total value of such supply, under a contract, exceeds five lakh
rupees.

Explanation. – For the purpose of deduction of tax specified above, the value of
supply shall be taken as the amount excluding the tax indicated in the invoice.

(2) The amount deducted as tax under this section shall be paid to the account of the
appropriate Government by the deductor within ten days after the end of the
month in which such deduction is made, in the manner prescribed.

(3) The deductor shall, in the manner prescribed, furnish to the deductee a certificate
mentioning therein the contract value, rate of deduction, amount deducted,
amount paid to the appropriate Government and such particulars as may be
prescribed in this behalf.

(4) If any deductor fails to furnish to the deductee the certificate, after deducting the
tax at source, within five days of crediting the amount so deducted to the
appropriate Government, the deductor shall be liable to pay, by way of a late fee,
a sum of one hundred rupees per day from the day after the expiry of the five
day period until the failure is rectified:

PROVIDED that the amount of fee payable under this sub-section shall not
exceed five thousand rupees.

(5) The deductee shall claim credit, in his electronic cash ledger, of the tax deducted
and reflected in the return of the deductor furnished under sub-section (3) of
section 34, in the manner prescribed.

(6) If any deductor fails to pay to the account of the appropriate Government the
amount deducted as tax under sub-section (1), he shall be liable to pay interest
in accordance with the provisions of sub-section (1) of section 45, in addition to
the amount of tax deducted.

(7) Determination of the amount in default under this section shall be made in the
manner specified in section 66 or 67, as the case may be.

(8) Refund to the deductor or the deductee, as the case may be, arising on account
of excess or erroneous deduction shall be dealt with in accordance with the
provisions of section 48:

PROVIDED that no refund to deductor shall be granted if the amount deducted has been
credited to the electronic cash ledger of the deductee.

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