COLLECTEE PAID RS.4,00,000/- TO THE COLLECTOR ( FOREST DEVELOPMENT CORPORATION ) FOR SUPPLY OF FOREST PRODUCTS. THE COLLECTOR COLLECTS INCOME TAX FOR RS.8,240/- AND DEPOSIT IT TO THE CREDIT OF CENTRAL GOVT. ACCOUNT. WHAT WOULD BE THE PURCHASE AMOUNT OF THE COLLECTEE .I.E. ASSESSEE- EITHER RS.4,00,000/- OR RS.391,760/-.


Admin’s Response:

Any amount collected in accordance with the provisions of Section 206 C of the Income Tax Act 1961 and paid to the credit of the Central Government shall be deemed to be a payment of tax on behalf of the person from whom the amount has been collected and credit shall be given to such person for the amount so collected in a particular assessment year in accordance with the rules. The purchase amount in the above case, therefore, is Rs. 4.00 lacs.