No coercive recovery from the assessee if TDS not deposited by Deductor

The CBDT has issued a letter on 01.06.2015 stating that in many cases the deductor has deducted tax at source from payments made to them in accordance with the provisions of Chapter XVII of the Income-tax Act but the deductor has failed to deposit the same into the Government Account.

Under section 205 of the Act, the assessee shall not be called upon to pay the tax to the extent that tax has been deducted from the income. The Act puts a bar on direct demand against the assessee in cases where tax is deducted but not deposited by the deductor.


CBDT instructed the assessing officer that demand on account of tax credit mismatch cannot be enforced coercively  and has asked all assessing officers not to put the assessees to any inconvenience on account of the default of tax info into the Government account by the deductor.

This will be a welcome relief as the assessee cannot be penalized or put to inconvenience for the default committed by the deductor of tax at source. The letter issued by CBDT can be downloaded by clicking here –>CBDT_Letter_TDS_Coercive_Recovery

Author: Jinesh Bhagdev

A Jinesh R. Bhagdev CA Jinesh R. Bhagdev, an associate member of The Institute of Chartered Accountants of India, specializes in the field of Transfer Pricing and International Taxation, Domestic Taxation, Auditing and Assurance, Financial Planning & Advisory and other allied field of Chartered Accountancy Profession. CA Jinesh R. Bhagdev is one of the contributors to the book ‘Practical Guide to Indian Transfer Pricing’ published by Chambers of Tax Consultants in September 2010. CA Jinesh R. Bhagdev is one of the eminent speakers at various seminars conducted by the Institute of Chartered Accountants of India, Institute of Company Secretaries of India and other professional bodies like Bombay Chartered Accountants Society. CA Jinesh R. Bhagdev regularly contributes to various articles on transfer pricing on various platforms like,, professional blogs on Transfer Pricing and International Taxation, etc.

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