Court dismisses writ petition on tax deductions, upholding employer's duty to deduct tax at source.

The court dismissed the writ petition regarding tax deductions on salary payments, emphasizing the employer's obligation to deduct tax at source. The employer initially deducted tax based on loan repayments but later deducted tax on the full salary due to doubts on the petitioner's eligibility for a specific deduction under the Income Tax Act. The excess tax deducted would be credited to the Income Tax Department for assessment, with any surplus refunded to the petitioner if it exceeded their tax liability, clarifying that relief through the writ petition was not warranted.

---

---

Issues:
1. Deduction of tax at source on salary payments.
2. Entitlement to deduction under Section 80C (2) (xviii) of the Income Tax Act.
3. Employer's obligation to deduct tax at source.
4. Grievance regarding deductions made by the employer.

Analysis:
1. The petitioner, an assessee under the Income Tax Act, availed a loan and made monthly repayments. Initially, the employer deducted tax at source considering the loan repayments. However, later, the employer began deducting tax on the entire salary amount due to doubts on the petitioner's eligibility for deduction under Section 80C (2) (xviii). The petitioner sought relief through a writ petition to assess income tax after deducting the loan repayments.

2. The 1st respondent argued that lower tax deduction could only be permitted if the petitioner qualified for exemption under Section 80C (2) (xviii). It was contended that the petitioner did not meet the criteria for this deduction, leading to the employer deducting tax on the full salary payments.

3. After hearing both parties, the court noted the employer's obligation to deduct tax at source as per the Income Tax Act. The employer initially deducted lesser amounts based on the loan repayments but later began deducting tax on the full salary due to doubts on the petitioner's eligibility for deduction under Section 80C (2) (xviii) due to joint ownership of the house constructed with the loan.

4. The court dismissed the writ petition as the excess tax deducted would be credited to the Income Tax Department and considered in the petitioner's assessment. Any excess tax collected would be refunded to the petitioner if it exceeded his tax liability under the Income Tax Act. The judgment clarified that relief was not warranted in the writ petition, emphasizing the employer's obligation to deduct tax at source and the subsequent assessment process to rectify any excess deductions.

---