CHAPTER XVII — COLLECTION AND RECOVERY OF TAX · B.—DEDUCTION AT SOURCE
CHAPTER XVII — COLLECTION AND RECOVERY OF TAX · B.—DEDUCTION AT SOURCE
Section 202 — Deduction Only One Mode of Recovery (Tax Deducted at Source)
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Status: Live. A clarificatory recovery provision.
Finance Act, 2026: No amendment.
Mechanism: Deduction at source is without prejudice to any other mode of recovery; the Revenue may also recover the tax by direct assessment, subject to sections 205 and 201 against double collection.
Litigation profile: Negligible as an independent provision — the candour rule applies.
A. SECTION COMMENTARY
Section 202 declares that the power to recover tax by deduction at source is without prejudice to any other mode of recovery. In other words, deduction at source is one mode of collecting the tax, not the only one; the Revenue's resort to TDS does not bar it from recovering the same tax by the ordinary modes (direct assessment of, and demand on, the person liable). The provision preserves the Government's full armoury of recovery and prevents an argument that, because tax ought to have been deducted, the only remedy is against the deductor.
Section 202 must be read with section 205 (the bar against a direct demand on the assessee to the extent tax has been deducted) and with the first proviso to section 201. The reconciliation is this: where tax has in fact been deducted, section 205 protects the recipient against a second demand; but where tax was not deducted at all, section 202 preserves the right to recover the tax — from the recipient by direct assessment, or from the deductor under section 201 — the tax being collected only once. Section 202 thus secures the charge while the other provisions prevent double collection.
A clarificatory provision — candour
Section 202 is clarificatory and is rarely the subject of independent litigation; the contests are fought under sections 201, 205 and 199. In candour, there is no separate body of section 202 merits authority; it is applied as part of that scheme.
B. STATUTORY POSITION (verbatim text)
Reproduced from the Income-tax Act, 1961 as amended up to the Finance Act, 2025 (the Finance Act, 2026 makes no amendment to this section). Editorial markers “***” denote text omitted by the Legislature.
202. The power to recover tax by deduction under the foregoing provisions of this Chapter shall be without prejudice to any other mode of recovery.
C. AUTHORITIES
Candour rule observed: section 202 is a clarificatory recovery provision litigated through sections 201/205/199. The statutory scheme is offered.
Statutory backdrop — one mode among several
Deduction is without prejudice to other modes
Principle: TDS is one mode of recovery; the Revenue may also recover the tax by direct assessment of the person liable. Read with section 205 and the first proviso to section 201, the tax is collected once — from the recipient where not deducted, and not twice where it has been deducted.
Use: Preserves the charge while preventing double collection; the gateway to the section 201/205 reconciliation.
Principle: No second recovery of the tax where the payee has paid it; section 201(1A) interest apart.
Use: Confirms the single-collection principle that section 202 operates within.
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 bare Act; case-law citations have been web-verified. Where a section is new, narrow or substantially unlitigated, the candour rule is observed — the absence of direct authority is stated and only genuinely cognate authority is offered. This digest is for professional reference and is not a substitute for the official report of any judgment.
CHAPTER XVII — COLLECTION AND RECOVERY OF TAX · B.—DEDUCTION AT SOURCE
Section 202 — Deduction Only One Mode of Recovery (Tax Deducted at Source)
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Status: Live. A clarificatory recovery provision.
Finance Act, 2026: No amendment.
Mechanism: Deduction at source is without prejudice to any other mode of recovery; the Revenue may also recover the tax by direct assessment, subject to sections 205 and 201 against double collection.
Litigation profile: Negligible as an independent provision — the candour rule applies.
A. SECTION COMMENTARY
Section 202 declares that the power to recover tax by deduction at source is without prejudice to any other mode of recovery. In other words, deduction at source is one mode of collecting the tax, not the only one; the Revenue's resort to TDS does not bar it from recovering the same tax by the ordinary modes (direct assessment of, and demand on, the person liable). The provision preserves the Government's full armoury of recovery and prevents an argument that, because tax ought to have been deducted, the only remedy is against the deductor.
Reconciling section 202 with section 205
Section 202 must be read with section 205 (the bar against a direct demand on the assessee to the extent tax has been deducted) and with the first proviso to section 201. The reconciliation is this: where tax has in fact been deducted, section 205 protects the recipient against a second demand; but where tax was not deducted at all, section 202 preserves the right to recover the tax — from the recipient by direct assessment, or from the deductor under section 201 — the tax being collected only once. Section 202 thus secures the charge while the other provisions prevent double collection.
A clarificatory provision — candour
Section 202 is clarificatory and is rarely the subject of independent litigation; the contests are fought under sections 201, 205 and 199. In candour, there is no separate body of section 202 merits authority; it is applied as part of that scheme.
B. STATUTORY POSITION (verbatim text)
Reproduced from the Income-tax Act, 1961 as amended up to the Finance Act, 2025 (the Finance Act, 2026 makes no amendment to this section). Editorial markers “***” denote text omitted by the Legislature.
202. The power to recover tax by deduction under the foregoing provisions of this Chapter shall be without prejudice to any other mode of recovery.
C. AUTHORITIES
Candour rule observed: section 202 is a clarificatory recovery provision litigated through sections 201/205/199. The statutory scheme is offered.
Statutory backdrop — one mode among several
Deduction is without prejudice to other modes
Principle: TDS is one mode of recovery; the Revenue may also recover the tax by direct assessment of the person liable. Read with section 205 and the first proviso to section 201, the tax is collected once — from the recipient where not deducted, and not twice where it has been deducted.
Use: Preserves the charge while preventing double collection; the gateway to the section 201/205 reconciliation.
Hindustan Coca-Cola Beverages (P) Ltd. v. CIT (2007) 293 ITR 226 (SC) — cognate
Principle: No second recovery of the tax where the payee has paid it; section 201(1A) interest apart.
Use: Confirms the single-collection principle that section 202 operates within.
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 bare Act; case-law citations have been web-verified. Where a section is new, narrow or substantially unlitigated, the candour rule is observed — the absence of direct authority is stated and only genuinely cognate authority is offered. This digest is for professional reference and is not a substitute for the official report of any judgment.