CHAPTER XVII — COLLECTION AND RECOVERY OF TAX · B.—DEDUCTION AT SOURCE
CHAPTER XVII — COLLECTION AND RECOVERY OF TAX · B.—DEDUCTION AT SOURCE
Section 203 — Certificate for Tax Deducted (Form 16 / 16A) (Tax Deducted at Source)
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Status: Live. The certificate-furnishing duty; mechanical.
Finance Act, 2026: No amendment.
Mechanism: The deductor must furnish to the deductee, within the prescribed time, a certificate (Form 16/16A) of the tax deducted; it evidences the deduction for the section 199 credit.
Litigation profile: Negligible as an independent provision — the candour rule applies.
A. SECTION COMMENTARY
Section 203 requires every person who deducts tax at source to furnish to the person from whose income the deduction was made a certificate, within the prescribed time, specifying the amount deducted, the rate, and the other prescribed particulars — the familiar Form 16 (for salary) and Form 16A (for other payments). The certificate is the deductee's primary evidence of the deduction, on the strength of which (with the tax-credit statement) he claims credit under section 199.
Evidence of deduction — and its limits
The certificate evidences the deduction, but the deductee's right to credit does not stand or fall solely on the certificate: the substantive protection lies in sections 199 and 205, under which credit must be given for tax actually deducted even where the certificate or the tax-credit statement is deficient because of the deductor's default. The certificate obligation is reinforced by the late-furnishing fee/penalty regime, and by the practical reality that Form 16/16A are now generated from the processed TDS statements.
A mechanical compliance provision — candour
Section 203 is mechanical and is rarely litigated on its own terms; the litigation concerns credit (section 199/205), not the certificate duty. In candour, there is no separate body of section 203 merits authority.
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.
203. (1) Every person deducting tax in accordance with the foregoing provisions of this Chapter shall, within such period as may be prescribed from the time of credit or payment of the sum, or, as the case may be, from the time of issue of a cheque or warrant for payment of any dividend to a shareholder, furnish to the person to whose account such credit is given or to whom such payment is made or the cheque or warrant is issued, a certificate to the effect that tax has been deducted, and specifying the amount so deducted, the rate at which the tax has been deducted and such other particulars as may be prescribed.
(2) Every person, being an employer, referred to in sub-section (1A) of section 192 shall, within such period, as may be prescribed, furnish to the person in respect of whose income such payment of tax has been made, a certificate to the effect that tax has been paid to the Central Government, and specify the amount so paid, the rate at which the tax has been paid and such other particulars as may be prescribed.
(3) ***
C. AUTHORITIES
Candour rule observed: section 203 is a mechanical certificate-furnishing duty litigated through the credit provisions. The statutory scheme is offered.
Statutory backdrop — certificate and credit
Form 16/16A as evidence; credit protected independently
Principle: The section 203 certificate evidences the deduction, but credit under section 199 (and the section 205 bar) is available for tax actually deducted even where the certificate/26AS is deficient through the deductor's default; the deductee is not to suffer for that default.
Use: Links the certificate duty to the deductee's substantive credit protection.
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 203 — Certificate for Tax Deducted (Form 16 / 16A) (Tax Deducted at Source)
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Status: Live. The certificate-furnishing duty; mechanical.
Finance Act, 2026: No amendment.
Mechanism: The deductor must furnish to the deductee, within the prescribed time, a certificate (Form 16/16A) of the tax deducted; it evidences the deduction for the section 199 credit.
Litigation profile: Negligible as an independent provision — the candour rule applies.
A. SECTION COMMENTARY
Section 203 requires every person who deducts tax at source to furnish to the person from whose income the deduction was made a certificate, within the prescribed time, specifying the amount deducted, the rate, and the other prescribed particulars — the familiar Form 16 (for salary) and Form 16A (for other payments). The certificate is the deductee's primary evidence of the deduction, on the strength of which (with the tax-credit statement) he claims credit under section 199.
Evidence of deduction — and its limits
The certificate evidences the deduction, but the deductee's right to credit does not stand or fall solely on the certificate: the substantive protection lies in sections 199 and 205, under which credit must be given for tax actually deducted even where the certificate or the tax-credit statement is deficient because of the deductor's default. The certificate obligation is reinforced by the late-furnishing fee/penalty regime, and by the practical reality that Form 16/16A are now generated from the processed TDS statements.
A mechanical compliance provision — candour
Section 203 is mechanical and is rarely litigated on its own terms; the litigation concerns credit (section 199/205), not the certificate duty. In candour, there is no separate body of section 203 merits authority.
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.
203. (1) Every person deducting tax in accordance with the foregoing provisions of this Chapter shall, within such period as may be prescribed from the time of credit or payment of the sum, or, as the case may be, from the time of issue of a cheque or warrant for payment of any dividend to a shareholder, furnish to the person to whose account such credit is given or to whom such payment is made or the cheque or warrant is issued, a certificate to the effect that tax has been deducted, and specifying the amount so deducted, the rate at which the tax has been deducted and such other particulars as may be prescribed.
(2) Every person, being an employer, referred to in sub-section (1A) of section 192 shall, within such period, as may be prescribed, furnish to the person in respect of whose income such payment of tax has been made, a certificate to the effect that tax has been paid to the Central Government, and specify the amount so paid, the rate at which the tax has been paid and such other particulars as may be prescribed.
(3) ***
C. AUTHORITIES
Candour rule observed: section 203 is a mechanical certificate-furnishing duty litigated through the credit provisions. The statutory scheme is offered.
Statutory backdrop — certificate and credit
Form 16/16A as evidence; credit protected independently
Principle: The section 203 certificate evidences the deduction, but credit under section 199 (and the section 205 bar) is available for tax actually deducted even where the certificate/26AS is deficient through the deductor's default; the deductee is not to suffer for that default.
Use: Links the certificate duty to the deductee's substantive credit protection.
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.