Lower Deduction Certificate
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Lower Deduction Certificate
Given the tendency of taxpayers to evade taxes, Income Tax provisions provide for the collection of tax from the very source of income. Under this system, the person liable to make the payment (payer) is responsible for deducting tax before making the payment to the recipient at the rates specified by the revenue department.
Such tax has to be deducted either at the time of crediting the amount in the books or when making payment to the recipient, whichever is earlier. It ensures the timely collection of revenues by the government and controls tax evasion.
