203. Credit for tax deducted or collected at source.—

(1) The credit for tax deducted at source or tax collected at source shall be given, on the basis of information relating to deduction or collection of tax furnished by the deductor or collector to the income-tax authority or the person authorised by such authority, in the following manner:––

(a) tax deducted at source and paid to the Central Government in accordance with the provisions of Chapter XIX of the Act, shall be given to the person to whom payment has been made or whose account has been credited (herein referred to as deductee); and

(b) tax collected at source and paid to the Central Government in accordance with the provisions of Chapter XIX of the Act, shall be given to the person from whom tax has been collected or whose account has been debited (herein referred to as collectee).

(2) Where the deductee files a declaration with the deductor that the whole or any part of the income on which tax has been deducted at source is assessable in the hands of a person other than the deductee or where the collectee files a declaration with the collector that the income of the collectee is assessable in the hands of any person other than the collectee,—

(a) the deductor or collector shall report the tax deduction or collection in the name of the other person in the information relating to deduction or collection of tax referred to in sub-rule (1); and

(b) accordingly credit for such tax deducted or collected at source, as the case may be, shall be given to the other person and not to the deductee or collectee.

(3) The declaration filed by the deductee or collectee under sub-rule (2) shall contain the name, address, Permanent Account Number of the other person to whom credit is to be given, details of payment or credit in relation to which credit is to be given and reasons for giving credit to such person, and such declaration shall be kept in custody by the deductor or collector.

(4) The deductor or collector shall issue the certificate for deduction or collection of tax at source to the person in whose name credit is shown in the information relating to deduction or collection of tax referred to in sub-rule (1) and shall keep the certificate of deduction in his custody.

(5) The credit for tax deducted or collected at source and paid to the Central Government, shall be given for tax year for which the income is assessable to tax.

(6) (i) Where tax has been deducted at source and paid to the Central Government and the income corresponding to such tax is assessable over a number of years, credit for tax deducted at source shall be allowed across those years in the same proportion in which the income is assessable to tax.

(ii) Where tax has been collected at source and paid to the Central Government and the lease or license is relatable to more than one year, credit for tax collected at source shall be allowed across those years to which the lease or license relates in the same proportion.

(7) Irrespective of anything contained in sub-rules (1) to (6), for the purposes of section 393 (3) [Table: Sl. No. 5] and section 394(1) [Table: Sl. Nos. 6, 7 and 8], credit for tax so deducted or collected at source shall be given to the person from whose account tax is deducted or collected, as the case may be and paid to the Central Government account for the tax year in which such tax deduction or collection is made.

(8) Credit for tax deducted or collected at source and paid to the account of the Central Government shall be granted on the basis of the information referred in sub-rule (1) and the information in the return of income in respect of the claim for the credit, subject to verification in accordance with the risk management strategy formulated by the Board from time to time.