Section 200 of ITA, 1961 : Section 200: Duty Of Person Deducting Tax

Explanation using Example

Imagine a software development company, "Tech Innovations Ltd.," that employs several software engineers. As per the Income-tax Act, 1961, every month "Tech Innovations Ltd." deducts a certain amount from the salaries of its employees as Tax Deducted at Source (TDS). Section 200 of the Income-tax Act, 1961, mandates that "Tech Innovations Ltd." must deposit this TDS with the Central Government within the prescribed time frame.

For example, if the company deducted TDS from its employees' salaries in the month of June, it must ensure that this deducted amount is paid to the Central Government by the 7th of the following month, July, unless the government specifies a different date.

Furthermore, after depositing the TDS, "Tech Innovations Ltd." is required to prepare and submit a TDS statement to the Income Tax Department detailing the amount of tax deducted and other relevant particulars of the employees. If the company discovers any error in the statement, it can submit a correction statement to rectify the mistake.

This practical application of Section 200 ensures that the government receives its tax revenues in a timely manner and maintains accurate records of tax deductions and payments.