DAMODARAM SANJIVAYYA NATIONAL LAW

UNIVERSITY
TAXATION LAW-I

Name of Student: Kahmish khan

Registration number: 2013055
Topic of Project: Collection and Recovery of Tax and refunds
Research Methodology: Research is library based no access to specialist
collections and access to comparative or historical materials are required.
Literature Review:

Dr. Vinod K. Singhania, Student Guide to Income Tax( 55 th ed.,

Taxmann, 2016)

J.N Manoharam & G.R Hari, Direct Tax Laws(Snow White Publication
Pvt. Ltd., 2016)

Sampath Iyenagars, Law of Income Tax(11th ed.,Bharat Law House

Pvt. Ltd,2011-13)

Aim of the project: The aim of the project is to know the process through
which collection and recovery of tax and refunds are done.

SYNOPSIS
A tax refund or tax rebate is a refund on taxes when the tax liability is less than
the taxes paid. Taxpayers can often get a tax refund on their income tax if the tax
they owe is less than the sum of the total amount of the withholding taxes
and estimated taxes that they paid, plus the refundable tax credits that they
claim. (Tax refunds are money given back at the end of the financial year. Under
Article 256 of the constitution of India, no person without Authority of law can
recover any taxes.
The Income-tax provides for collection and recovery of income-tax in the
following ways, namely,
(i)

Deduction of tax at source

(ii)

Advance payment of income-tax before the assessment by the assesse

himself

(iii)

Direct payment of income-tax by the assesse on self-assessment; and

(iv)

After the assessment is made by the Assessing officer.

This project aim is to discuss the whole procedure of collection and recovery of
tax and refunds with the provisions involved and also what is the role of
Assessing officer in the process.

Consultation
Deduction of Tax at Source
1. Salary (Section 192)
2. Interest on Securities (Section 193)
3. Dividends (Section 194)
4. Interest other than Interest on Securities (Section 194A)
5. Winnings from Lotteries or Crossword Puzzles (Section 194B)
6. Winnings from House Races (Section 194BB)
7. Payment to Resident Contractor or Sub-Contractor (Section 194C)
8. Insurance Commission (Section 194D)
9. Payment in respect of Life Insurance Policy (Section 194DA)
10. Payment in respect of Deposits under National Savings Scheme etc.
(Section 194EE)
11. Commission,etc. on sale of lottery tickets (Section 194G)
12. Commission or Brokerage (Section 194H)
13. Rent (Section 194-I)
14. Payment on transfer of certain immovable property other than agricultural
land (Section 194-IA)

ADVANCE PAYMENT OF TAX

The computation od advance tax liability, under different situations, is to be done
as follows:
Section 207-219 of the Income Tax Act deals with the issues relating to advance
payment of tax. In advance payment of tax, the assesse has to pay tax in a
financial year on estimated income which is to be assessed in the subsequent
assessment year. It follows the doctrine known as pay as you earn scheme.

ROLE OF ASSESSING OFFICER IN RELATION TO ADVANCE

PAYMENT OF TAX
An AO can order payment of advance tax if the following conditions are satisfies:
(i)

The assesse has already been assessed by way of regular assessment

in respect of total income of any previous year.

(ii)

Failure to pay advance tax by such assesse, inspite of legal obligation

(iii)

The AO is of the opinion that such person is liable to pay advance tax
on current yearss income

(iv)

The order must specify the amount of advance tax and instalments in
which advance tax has to be paid

(v)

Such order may be passed during the previous year but not later than
day of February.

(vi)

The order must be made in writing.

REFUNDS (Section 237 to 245)

Refunds means to repay or restore what was taken under the income-tax law.
Refunds arise in those cases where the amount of tax paid by a person or on his
behalf is greater than the amount with which he is properly chargeable for that

year.

Whom to apply for refund?

Claim for refunds should be preferred to the Assessing Officer having jurisdiction
to assessee.
In bigger towns like Delhi,Bombay,Calcutta,Madras separate Refund Circles
have been opened to settle refund cases. However, these circles settle refund
cases where income is restricted to Other Sources

Who is entitled to refund?

(i)

Owner of the income who has made excess payment.

(ii)

Where the income of a person is included in the hands of another,

only the latter is entitled to refund.

(iii)

In case of death legal representative

(iv)

In case of insolvency of the assesse- the receiver.

(v)

In case of liquidation of a company- the liquidator of the company.

(vi)

In case of minor or incapable assesse- the guardian of the minor or

incapable.