CHAPTER XVII — COLLECTION AND RECOVERY OF TAX · PART A — GENERAL
CHAPTER XVII — COLLECTION AND RECOVERY OF TAX · PART A — GENERAL
Section 190 — Deduction at source and advance payment
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Status: Live. The opening, machinery-declaratory provision of Chapter XVII.
Finance Act, 2026: No amendment. Section 190 stands on the Finance Act, 2025 base. (FA 2026 in Chapter XVII touches only s. 220(2), s. 222 and the new s. 234-I.)
Function: Declares that, ahead of the regular assessment, tax on income is collected through four channels — deduction at source (Part B), collection at source (Part BB), advance payment (Part C) and the employer's option to pay tax on non-monetary perquisites under s. 192(1A) — without displacing the charge under s. 4.
Litigation profile: Seldom litigated on its own terms; it is the interpretive anchor invoked to establish that the whole collection machinery of Chapter XVII is provisional and subordinate to the charge. The authorities below construe that premise.
A. SECTION COMMENTARY
Section 190 is the threshold provision of Chapter XVII and the textual source of the “pay-as-you-earn” principle in the Indian income-tax scheme. Sub-section (1) declares that, notwithstanding that the regular assessment in respect of any income is to be made in a later assessment year, the tax on such income shall be payable in the current year — by deduction or collection at source, by advance payment, or by payment under sub-section (1A) of section 192 — “in accordance with the provisions of this Chapter”. Sub-section (2) is a saving clause: nothing in the section is to prejudice the charge of tax on that income under sub-section (1) of section 4.
The provision performs two distinct functions. First, it gathers the several collection mechanisms scattered through Chapter XVII — TDS (Part B, ss. 192–206B), TCS (Part BB, s. 206C), advance tax (Part C, ss. 207–219), and the employer's facility to discharge the tax on perquisites provided otherwise than by way of monetary payment under s. 192(1A) — and locates them as advance instalments of a single liability. Secondly, by the express non-obstante and the saving in sub-section (2), it subordinates that machinery to the charging section, making clear that collection in advance neither creates a fresh charge nor enlarges the one created by s. 4.
Scheme and interpretive consequences
Because section 190 places the collection machinery in service of the charge under section 4, three propositions follow which pervade the rest of the Chapter. First, advance collection is tentative and provisional: tax taken at source or paid in advance is collected ahead of, and is always subject to, the regular assessment, against which credit is given and any excess refunded. Secondly, the obligation to collect is co-extensive with chargeability — where the underlying sum is not chargeable to tax, there is no foundation for deduction or collection, for the machinery cannot travel beyond the charge it serves. Thirdly, the amount deducted, collected or paid in advance is, in substance, the assessee's own tax discharged ahead of time; once that liability is satisfied the same tax cannot be gathered a second time.
Section 190 also fixes the relationship between the Chapter and the assessee's personal liability. The deduction/advance-payment regime is an alternative and largely vicarious machinery of collection; it does not extinguish the assessee's primary obligation, which section 191 expressly preserves for cases where no deduction is provided for, or where deduction has not in fact been made. Read together, sections 190 and 191 establish that liability ultimately rests on the person whose income is charged, while Chapter XVII merely advances and apportions the point of its collection.
The saving in sub-section (2) is significant for assessment practice. It confirms that compliance (or default) in the advance-collection machinery does not determine the quantum of the charge: an assessee under-deducted at source remains chargeable on the true income under section 4, and a deductor's default does not convert a non-taxable receipt into a taxable one. The interest provisions for advance-tax default (ss. 234B and 234C) and the consequences of TDS default (ss. 201, 201(1A)) are calibrated to this design — they compensate for, or penalise, delayed collection without altering the charge itself.
B. STATUTORY POSITION (verbatim text)
The text of the section, as it stands in the Act (Finance Act, 2025 base; unaffected by the Finance Act, 2026), is set out below.
190. (1) Notwithstanding that the regular assessment in respect of any income is to be made in a later assessment year, the tax on such income shall be payable by deduction or collection at source or by advance payment or by payment under sub-section (1A) of section 192, as the case may be, in accordance with the provisions of this Chapter.
(2) Nothing in this section shall prejudice the charge of tax on such income under the provisions of sub-section (1) of section 4.
C. AUTHORITIES
Section 190 has not been the subject of significant independent construction; consistent with the candour rule of this Treatise, that is stated plainly. The authorities below — all binding or persuasive on the propositions section 190 introduces — establish the character of the Chapter XVII machinery as a provisional mode of collection subordinate to the charge.
Cluster 1 — Advance collection is a provisional/tentative mode, subordinate to the charge
Transmission Corporation of A.P. Ltd. v. CIT (1999) 239 ITR 587 (SC)
Issue. Whether tax was deductible at source on composite payments to a non-resident that were not wholly income.
Held. The provision for deduction of tax at source is a “tentative” mode of collection, subject to regular assessment; where a payment has an element of income embedded in it the payer must deduct, but the recipient may seek determination of the taxable portion under ss. 195(2)/197. The machinery is a means of collection, not a separate charge.
Relevance. Squarely illustrates the section 190 premise that collection at source is provisional and yields to the regular assessment which the section itself contemplates.
GE India Technology Centre (P) Ltd. v. CIT (2010) 327 ITR 456 (SC)
Issue. Whether a payer must deduct tax under s. 195 on the gross sum even where the sum is not chargeable to tax in the recipient's hands.
Held. The obligation to deduct arises only if the sum is “chargeable under the provisions of the Act”, read with ss. 4, 5 and 9; the words “chargeable under the provisions of the Act” in s. 195(1) are of “utmost importance”. Chargeability is foundational, not incidental, to the duty to deduct.
Relevance. Directly applies the s. 190(2) principle that the collection machinery cannot exceed the charge under s. 4 — no chargeability, no obligation to collect.
CIT v. Eli Lilly & Co. (India) (P) Ltd. (2009) 312 ITR 225 (SC)
Issue. Nature of the TDS provisions and their relationship with the charge.
Held. The provisions for deduction, collection and recovery of tax are in the nature of machinery provisions, forming part of an integrated code together with the charging and computation provisions; TDS is a means of collecting the tax, and the charging provision must be read with the machinery provision.
Relevance. Confirms the character of Chapter XVII as an integrated collection code subordinate to the charge — the very architecture that section 190 introduces.
Cluster 2 — Amounts deducted/collected/paid in advance are the assessee's own tax paid ahead of time
Modi Industries Ltd. v. CIT (1995) 216 ITR 759 (SC)
Issue. Point from which advance tax and tax deducted at source are to be treated as “tax paid”, and the consequences for credit and interest.
Held. Advance tax and TDS are paid in discharge of an inchoate liability and retain their separate identity only until the regular assessment; upon assessment they are adjusted against, and become tax paid towards, the assessed liability, with credit given accordingly.
Relevance. Establishes that collection under Chapter XVII is the assessee's own tax discharged in advance — the economic premise of section 190(1).
CIT v. Anjum M. H. Ghaswala (2001) 252 ITR 1 (SC, Constitution Bench)
Issue. Whether the levy of statutory interest for default in payment of advance tax is mandatory.
Held. The charge of interest under the advance-tax scheme is mandatory and compensatory in nature; the authorities have no power to reduce or waive it except as the statute permits.
Relevance. Shows that the advance-payment limb of section 190 is enforced by a mandatory, compensatory interest regime, reinforcing that advance collection is an integral feature of the timing of the charge, not an optional add-on.
Cluster 3 — The charge is paramount; no second collection of tax already paid
Issue. Whether short-deducted tax can be recovered from the deductor where the recipient has already paid the tax on that income.
Held. Following CBDT Circular No. 275/201/95-IT(B) dated 29-1-1997, once the deductee has paid the tax, the same tax cannot be recovered again from the deductor under s. 201(1); the deductor remains liable to interest under s. 201(1A) up to the date the payee pays.
Relevance. Embodies section 190's logic that the deducted amount is the recipient's tax collected in advance; once that liability is discharged the State cannot collect it twice.
ITO v. Ch. Atchaiah (1996) 218 ITR 239 (SC)
Issue. Whether the Assessing Officer may tax income in the hands of a person other than the one to whom it belongs.
Held. Under the 1961 Act the Assessing Officer must tax the right person, and the right person alone; he has no option to assess the wrong person.
Relevance. Read with s. 190(2), confirms that the charge fixes liability on the person whose income it is; the collection machinery of Chapter XVII advances the point of collection but cannot relocate the charge.
Practice note
In practice section 190 is rarely the operative provision in a dispute; it is cited to frame the standard of review. Where an assessee challenges a TDS/TCS demand, the section supports the argument that the demand cannot stand if the underlying receipt is not chargeable (GE India Technology Centre) or if the tax has already been paid by the recipient (Hindustan Coca-Cola). Where the Revenue seeks to sustain advance-tax interest, the section and Ghaswala support the mandatory, compensatory character of that levy. The drafting interface with section 192(1A) — the employer's option to bear tax on non-monetary perquisites — is expressly carried into s. 190(1) and should be noted when advising employers on perquisite taxation.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text is reproduced verbatim from the Income-tax Act, 1961 as amended by the Finance Act, 2025 (no Finance Act, 2026 amendment to Part A of Chapter XVII). Citations have been web-verified; readers should consult the official reports before relying on any authority in proceedings.
CHAPTER XVII — COLLECTION AND RECOVERY OF TAX · PART A — GENERAL
Section 190 — Deduction at source and advance payment
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Status: Live. The opening, machinery-declaratory provision of Chapter XVII.
Finance Act, 2026: No amendment. Section 190 stands on the Finance Act, 2025 base. (FA 2026 in Chapter XVII touches only s. 220(2), s. 222 and the new s. 234-I.)
Function: Declares that, ahead of the regular assessment, tax on income is collected through four channels — deduction at source (Part B), collection at source (Part BB), advance payment (Part C) and the employer's option to pay tax on non-monetary perquisites under s. 192(1A) — without displacing the charge under s. 4.
Litigation profile: Seldom litigated on its own terms; it is the interpretive anchor invoked to establish that the whole collection machinery of Chapter XVII is provisional and subordinate to the charge. The authorities below construe that premise.
A. SECTION COMMENTARY
Section 190 is the threshold provision of Chapter XVII and the textual source of the “pay-as-you-earn” principle in the Indian income-tax scheme. Sub-section (1) declares that, notwithstanding that the regular assessment in respect of any income is to be made in a later assessment year, the tax on such income shall be payable in the current year — by deduction or collection at source, by advance payment, or by payment under sub-section (1A) of section 192 — “in accordance with the provisions of this Chapter”. Sub-section (2) is a saving clause: nothing in the section is to prejudice the charge of tax on that income under sub-section (1) of section 4.
The provision performs two distinct functions. First, it gathers the several collection mechanisms scattered through Chapter XVII — TDS (Part B, ss. 192–206B), TCS (Part BB, s. 206C), advance tax (Part C, ss. 207–219), and the employer's facility to discharge the tax on perquisites provided otherwise than by way of monetary payment under s. 192(1A) — and locates them as advance instalments of a single liability. Secondly, by the express non-obstante and the saving in sub-section (2), it subordinates that machinery to the charging section, making clear that collection in advance neither creates a fresh charge nor enlarges the one created by s. 4.
Scheme and interpretive consequences
Because section 190 places the collection machinery in service of the charge under section 4, three propositions follow which pervade the rest of the Chapter. First, advance collection is tentative and provisional: tax taken at source or paid in advance is collected ahead of, and is always subject to, the regular assessment, against which credit is given and any excess refunded. Secondly, the obligation to collect is co-extensive with chargeability — where the underlying sum is not chargeable to tax, there is no foundation for deduction or collection, for the machinery cannot travel beyond the charge it serves. Thirdly, the amount deducted, collected or paid in advance is, in substance, the assessee's own tax discharged ahead of time; once that liability is satisfied the same tax cannot be gathered a second time.
Section 190 also fixes the relationship between the Chapter and the assessee's personal liability. The deduction/advance-payment regime is an alternative and largely vicarious machinery of collection; it does not extinguish the assessee's primary obligation, which section 191 expressly preserves for cases where no deduction is provided for, or where deduction has not in fact been made. Read together, sections 190 and 191 establish that liability ultimately rests on the person whose income is charged, while Chapter XVII merely advances and apportions the point of its collection.
The saving in sub-section (2) is significant for assessment practice. It confirms that compliance (or default) in the advance-collection machinery does not determine the quantum of the charge: an assessee under-deducted at source remains chargeable on the true income under section 4, and a deductor's default does not convert a non-taxable receipt into a taxable one. The interest provisions for advance-tax default (ss. 234B and 234C) and the consequences of TDS default (ss. 201, 201(1A)) are calibrated to this design — they compensate for, or penalise, delayed collection without altering the charge itself.
B. STATUTORY POSITION (verbatim text)
The text of the section, as it stands in the Act (Finance Act, 2025 base; unaffected by the Finance Act, 2026), is set out below.
190. (1) Notwithstanding that the regular assessment in respect of any income is to be made in a later assessment year, the tax on such income shall be payable by deduction or collection at source or by advance payment or by payment under sub-section (1A) of section 192, as the case may be, in accordance with the provisions of this Chapter.
(2) Nothing in this section shall prejudice the charge of tax on such income under the provisions of sub-section (1) of section 4.
C. AUTHORITIES
Section 190 has not been the subject of significant independent construction; consistent with the candour rule of this Treatise, that is stated plainly. The authorities below — all binding or persuasive on the propositions section 190 introduces — establish the character of the Chapter XVII machinery as a provisional mode of collection subordinate to the charge.
Cluster 1 — Advance collection is a provisional/tentative mode, subordinate to the charge
Transmission Corporation of A.P. Ltd. v. CIT (1999) 239 ITR 587 (SC)
Issue. Whether tax was deductible at source on composite payments to a non-resident that were not wholly income.
Held. The provision for deduction of tax at source is a “tentative” mode of collection, subject to regular assessment; where a payment has an element of income embedded in it the payer must deduct, but the recipient may seek determination of the taxable portion under ss. 195(2)/197. The machinery is a means of collection, not a separate charge.
Relevance. Squarely illustrates the section 190 premise that collection at source is provisional and yields to the regular assessment which the section itself contemplates.
GE India Technology Centre (P) Ltd. v. CIT (2010) 327 ITR 456 (SC)
Issue. Whether a payer must deduct tax under s. 195 on the gross sum even where the sum is not chargeable to tax in the recipient's hands.
Held. The obligation to deduct arises only if the sum is “chargeable under the provisions of the Act”, read with ss. 4, 5 and 9; the words “chargeable under the provisions of the Act” in s. 195(1) are of “utmost importance”. Chargeability is foundational, not incidental, to the duty to deduct.
Relevance. Directly applies the s. 190(2) principle that the collection machinery cannot exceed the charge under s. 4 — no chargeability, no obligation to collect.
CIT v. Eli Lilly & Co. (India) (P) Ltd. (2009) 312 ITR 225 (SC)
Issue. Nature of the TDS provisions and their relationship with the charge.
Held. The provisions for deduction, collection and recovery of tax are in the nature of machinery provisions, forming part of an integrated code together with the charging and computation provisions; TDS is a means of collecting the tax, and the charging provision must be read with the machinery provision.
Relevance. Confirms the character of Chapter XVII as an integrated collection code subordinate to the charge — the very architecture that section 190 introduces.
Cluster 2 — Amounts deducted/collected/paid in advance are the assessee's own tax paid ahead of time
Modi Industries Ltd. v. CIT (1995) 216 ITR 759 (SC)
Issue. Point from which advance tax and tax deducted at source are to be treated as “tax paid”, and the consequences for credit and interest.
Held. Advance tax and TDS are paid in discharge of an inchoate liability and retain their separate identity only until the regular assessment; upon assessment they are adjusted against, and become tax paid towards, the assessed liability, with credit given accordingly.
Relevance. Establishes that collection under Chapter XVII is the assessee's own tax discharged in advance — the economic premise of section 190(1).
CIT v. Anjum M. H. Ghaswala (2001) 252 ITR 1 (SC, Constitution Bench)
Issue. Whether the levy of statutory interest for default in payment of advance tax is mandatory.
Held. The charge of interest under the advance-tax scheme is mandatory and compensatory in nature; the authorities have no power to reduce or waive it except as the statute permits.
Relevance. Shows that the advance-payment limb of section 190 is enforced by a mandatory, compensatory interest regime, reinforcing that advance collection is an integral feature of the timing of the charge, not an optional add-on.
Cluster 3 — The charge is paramount; no second collection of tax already paid
Hindustan Coca-Cola Beverages (P) Ltd. v. CIT (2007) 293 ITR 226 (SC)
Issue. Whether short-deducted tax can be recovered from the deductor where the recipient has already paid the tax on that income.
Held. Following CBDT Circular No. 275/201/95-IT(B) dated 29-1-1997, once the deductee has paid the tax, the same tax cannot be recovered again from the deductor under s. 201(1); the deductor remains liable to interest under s. 201(1A) up to the date the payee pays.
Relevance. Embodies section 190's logic that the deducted amount is the recipient's tax collected in advance; once that liability is discharged the State cannot collect it twice.
ITO v. Ch. Atchaiah (1996) 218 ITR 239 (SC)
Issue. Whether the Assessing Officer may tax income in the hands of a person other than the one to whom it belongs.
Held. Under the 1961 Act the Assessing Officer must tax the right person, and the right person alone; he has no option to assess the wrong person.
Relevance. Read with s. 190(2), confirms that the charge fixes liability on the person whose income it is; the collection machinery of Chapter XVII advances the point of collection but cannot relocate the charge.
Practice note
In practice section 190 is rarely the operative provision in a dispute; it is cited to frame the standard of review. Where an assessee challenges a TDS/TCS demand, the section supports the argument that the demand cannot stand if the underlying receipt is not chargeable (GE India Technology Centre) or if the tax has already been paid by the recipient (Hindustan Coca-Cola). Where the Revenue seeks to sustain advance-tax interest, the section and Ghaswala support the mandatory, compensatory character of that levy. The drafting interface with section 192(1A) — the employer's option to bear tax on non-monetary perquisites — is expressly carried into s. 190(1) and should be noted when advising employers on perquisite taxation.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text is reproduced verbatim from the Income-tax Act, 1961 as amended by the Finance Act, 2025 (no Finance Act, 2026 amendment to Part A of Chapter XVII). Citations have been web-verified; readers should consult the official reports before relying on any authority in proceedings.