Lower TDS Deduction Certificate

Lower TDS Deduction Certificate


Clause 197 seeks to empower the Assessing Officer to give a certificate for lower or no deduction of tax to the deductee where the deductee is a resident or to the deductor where the deductee is a non-resident, if the Assessing Officer is satisfied that the total income of the deductee justifies deduction of tax at a lower or nil rate. Accordingly, the clause provides that deduction shall be made in accordance with the certificate, until such certificate is cancelled by the Assessing Officer or the expiry of the validity of the certificate, whichever is earlier

197. Certificate for lower or no deduction of tax.

(1) The deductee may make an application, in such form and manner as may be prescribed, to the Assessing Officer seeking a certificate for deduction of income-tax at a lower rate or, as the case may be, no deduction of income-tax from payments to be received by him.

(2) The deductor may make an application, in such form and manner as may be prescribed, to the Assessing Officer seeking a certificate for deduction of income-tax at a lower rate or, as the case may be, no deduction of income-tax from payments to be made by him to a non-resident deductee.

(3) Where the Assessing Officer is satisfied that the total income of the deductee justifies deduction of income-tax at a lower rate or no deduction of income-tax, he shall give to the deductee or the deductor, as the case may be, such certificate as may be appropriate.

(4) The deductor shall deduct income-tax at the rates specified in the certificate issued under sub-section (3), until—

(a) Such certificate is cancelled by the Assessing Officer ; or
(b) The expiry of the validity of the certificate, whichever is earlier.

(5) The Board may prescribe the circumstances and the cases in which an application may be made for the grant of the certificate and the conditions subject to which such certificate may be granted and provide for all other matters connected therewith.