Tax deducted at source: gross income includes domestic and creditable foreign withholding, subject to specified exclusions.

Section 396 deems tax deducted at source to be income received by the assessee, requiring inclusion of the deducted amount in gross income despite receipt of only the net amount. Creditable foreign income-tax deducted is similarly included in gross income. Specified employer-paid tax on non-monetary perquisites and specified tax deductions are excluded. The provision is a computation mechanism for grossing up income and does not impose additional tax.

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