Conclusion
In our view, the arguments in favour of considering S. 90 for TDS computation outweigh the arguments against it. However, in absence of a clarification to the effect by the CBDT, companies fear disallowance of expenditure on salaries u/s.40(a)(iii) or action u/s.201 with attendant consequences in case the Assessing Officers take the view that S. 90 relief cannot be considered for deduction of tax u/s.192. Under such circumstances, a clarification from the CBDT will come in handy both to companies, which have to deduct tax at source u/s.192, and employees who are entitled to S. 90 relief.
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