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Business
Who is the payee?
Q: I am sorry to see in your Tax Forum of August 2 a common but unpardonable error of language: the use of the word `payee' to mean the one who pays tax.
Payee means ``The person to whom a sum of money is, or is to be, paid; especially the person to whom a bill or cheque is made payable''— The Shorter Oxford Dictionary. It has no other meaning.
In tax matters, the one who pays is the tax-payer and the payee is always the Government.
A: The above comment obviously refers to the title referring to the `deductee' of tax deducted at source by the deductor, where such tax was not deposited by the deductor.
The payee in the context of tax deduction has been used in the statute as the person who receives a payment subject to deduction of tax in almost all sections relating to provisions for tax deduction at source, the latest being Sec. 194H restored by Finance Act, 2001. Instructions from the Board also use the word `payee' in the same sense.
S. Rajaratnam
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