Annex - Circular No. 3, dated 11-2-1969 Referred to in Clarification
1. According to the existing instructions, taxpayers are required to pay normally their tax dues under the direct taxes, i.e., income-tax, wealth-tax, gift-tax, estate duty, expenditure tax, etc., directly into the Reserve Bank of India, State Bank of India/Government Treasuries. For their convenience, it has now been decided that the payment tendered by crossed cheques will hereafter be accepted in the income-tax offices.
2. The taxpayers are, however, requested to conform to the following procedure which having regard to the banking provisions and need for proper accounting has been devised in their own interest:
1. All payments must be made by crossed cheques.
2. In the cities of Bombay, Calcutta, Madras, New Delhi, Kanpur, Bangalore and Nagpur where the Government business is transacted by the Reserve Bank of India, cheques should be drawn payable to (i) “The Reserve Bank of India” or (ii) “The Income-tax Department”.
3. In other cities where the Government business is transacted by the State Bank of India or its subsidiary, the cheques should be made payable to the “Income-tax Department” and should not be drawn in favour of any Departmental Officer either by name or by designation.
3. The challan should be complete in all respects and should accompany the cheques for the same amount. They should be presented with a pay-in-slip available at the pay-in-counter.
4. A provisional receipt bearing the seal of office, duly signed and countersigned, will be given in acknowledgement of the cheque. The taxpayer’s copy of challan can be collected by him from the counter some time after the cheque has been cleared and credited to the Government account.
5. For removal of all doubts, it is clarified that the date of tax payment will be the date on which the proceeds of the cheque are realised and credited to the Government account.
6. Taxpayers are requested to note that the cheques tendered by them in payment are drawn by them. Where, however, it is not possible and the taxpayer has to tender third party cheque in payment of the tax dues, the foregoing procedure will have to be supplemented by the following:
The third party should draw the cheque directly in favour of the Income-tax Department and such a cheque should be accompanied by a letter from the drawer of the cheque.
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