Statement–Assumption — “The Government has decided to hold employers responsible for deducting tax at source (TDS) for all employees.” Assumptions: I) Employers may still not arrange TDS for their employees. II) Employees may not allow employers to deduct TDS. Choose the implicit assumption(s).

Introduction / Context:Assigning legal responsibility to employers for TDS clarifies accountability and compliance. We test whether the decision hinges on either fear of continued non-compliance or presumed employee resistance.

Given Data / Assumptions:

• Policy change: employers are responsible for TDS.
• Employees are payees; employers are deductors under the mandate.

Concept / Approach:The decision does not require assuming that employers “may still not” deduct (I) after being made responsible; rather, it is intended to ensure they do. Nor must the government assume that employees will not “allow” deduction (II); statutory deduction at source does not depend on individual consent once mandated.

Step-by-Step Solution:

Verification / Alternative check:In withholding regimes, legal obligation and penalties drive compliance irrespective of employee permission.

Why Other Options Are Wrong:Choosing I or II imputes unnecessary (and in II’s case, irrelevant) beliefs.

Common Pitfalls:Confusing ex-ante rationale (tightening compliance) with pessimistic assumptions about post-policy behavior.

Final Answer:Neither Assumption I nor II is implicit.