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How to pay tax

SACHIN garg (ca ) (181 Points)

16 January 2011

can any one pls tell if self assessment tax/TDS is paid through cheque than in whose name cheque shall be drawn?

usually i have seen that people tend to draw it in the name of "INCOME TAX OFFICER" or "GOVT. DUES(INCOME TAX)" or "INCOME TAX DEPARTMENT" ....and similar other names which are duly accepted by the banks .Is there any specific name prescribed in the law for the same ?

thanks in advance

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(Guest)

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.

2 Like

Manmohan ACA, CS (Chartered Accountant ) (14243 Points)
Replied 17 January 2011

thanks Deepak also useful for me

(Guest)

Use the Income Tax Department website and search the desired text to see whether there are any circulars or notifications regarding your query or search the Income Tax Act (Section Wise, Chapter Wise or simply type the text and search). The Income Tax Act in electronic form is easier to use and search for desired query. You will develop an extra interest in this subject by using this.

I also had no idea about this circular but after reading the abovesaid query, i searched and found out this circular. This way you can answer somone's query and increase your knowledge too and also don't forget to save the circulars for future reference with your desired file name.

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