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Under section 197(1) of the Income Tax Act, 1961, a person who is in receipt of any income on which tax is required to be deducted at source at the rates prescribed under the provisions of sections 192, 193, 194, 194A, 194C, 194D, 194G, 194H, 194I, 194J, 194K, 194LA and 195, can make an application in Form No. 13 to the Income Tax Assessing Officer for issue of a certificate for deduction of TDS at rates lower than prescribed. If the Assessing Officer is satisfied that existing and estimated tax liability on the total income of the applicant justifies the deduction at lower rates or at no deduction at all, he/she may issue such certificate. When the recipient furnishes such certificate to the person responsible for paying the income, the payer, until the certificate is revoked/cancelled by the Assessing Officer, shall deduct tax as per rates / deduct no tax as specified in the certificate. Rule 28AA of the Income tax Rules, 1962, prescribes the rules to be observed in this regard. Sub Rule (2) provides that the existing and estimated tax liability shall be determined by the Assessing officer after taking into the consideration, the following:
1. tax payable on estimated income of the previous year relevant to the assessment year The certificate can be issued for part of or complete previous year. Sub Rule (3) provides that the certificate issued by the Assessing Officer shall be valid for such period of the previous year as specified unless cancelled before the expiry of such period.
Sub rule (4) and (5) of Rule 28AA has been substituted and new sub rule (6) has been added as under
The certificate for lower deduction could now be a general one, issued to the applicant directly. The previous requirement of issue to and naming the person responsible in the certificate has now been restricted only to certificate for no or nil-deduction of tax. Form 13 has also been amended accordingly. Download the Notification No 46/2014 Click Here >> |