Collection of tax at source applies on specified receipts, with declarations, education-loan relief and safeguards against double collection.

Section 394 requires collection of tax at source on specified receipts at prescribed rates, at the earlier of account debit or actual receipt. Resident buyers may seek non-collection through Form 127 where goods are intended for manufacturing, processing, production or power generation rather than trading. The collector must submit the declaration copy to the jurisdictional income-tax authority within the prescribed period. Collection is not required for specified foreign remittances already subjected to collection, qualifying education loans, or receipts on which the buyer has deducted tax at source.

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