Indemnity for withholding agents protects deductors from civil claims when acting lawfully under the tax statute.
Clause 518 of the Income Tax Bill, 2025 provides a statutory indemnity for persons who deduct, retain, or pay tax in pursuance of the tax statute in respect of income belonging to another person, serving as a defence against civil claims by the income recipient where the agent acts lawfully; the protection is conditional on actions being within the scope of the statute and leaves unresolved issues about consequential losses, claim procedures, and interaction with other legal remedies.