When does the liability to deduct tax at source arise:

While most of the sections dealing with deductions of tax at source stipulate that tax should be deducted at source at the time of credit or payment of the amount whichever is earlier, Section 192 on account of usage of the term "at the time of payment". Therefore, in the case of "Salaries", the tax liability to deduct taxes arises only at the time of payment and not in cases where the employee's account is though credited with the salary due to him, but for some reason was not paid.

PLEASE NOTE:

• It is to be noted that the ultimate responsibility of deducting tax lies on the employer himself, or if the employer is a company, the company itself, including the principal officer thereof. It is to be noted that the liability of the employer to deduct tax is absolute; hence any agreement between the employer and employee, wherein the employee undertakes to discharge his own tax liability, will not affect the employer's liability in any manner.