Rule 28AA - Certificate for deduction at lower rates or no deduction of tax from income other than dividends - Income-tax Rules, 1962

1 [ Certificate for deduction at lower rates or no deduction of tax from income other than dividends. 28AA. (1) Where the Assessing Officer, on an application made by a person under sub-rule (1) of rule 28 is satisfied that existing and estimated tax liability of a person justifies the deduction of tax at lower rate or no deduction of tax, as the case may be, the Assessing Officer shall issue a certificate in accordance with the provisions of sub-section (1) of section 197 for deduction of tax at such lower rate or no deduction of tax. (2) The existing and estimated liability referred to in sub-rule (1) shall be determined by the Assessing Officer after taking into consideration the following:- (i) tax payable on estimated income of the previous year relevant to the assessment year; (ii) tax payable on the assessed or returned 3 [ or estimated income, as the case may be, of last four ] previous years; (iii) existing liability under the Income-tax Act,1961 and Wealth-tax Act,1957; (iv) advance tax payment 4 [ tax deducted at source and tax collected at source ] for the assessment year relevant to the previous year till the date of making application under sub-rule (1) of rule 28; 5 [*****] (3) The certificate shall be valid for such period of the previous year as may be specified in the certificate, unless it is cancelled by the Assessing Officer at any time before the expiry of the specified period. 6 [ (4) The certificate for deduction of tax at any lower rates or no deduction of tax, as the case may be, shall be issued direct to the person responsible for deducting the tax under advice to the person who made an application for issue of such certificate: Provided that where the number of persons responsible for deducting the tax is likely to exceed one hundred and the details of such persons are not available at the time of making application with the person making such application, the certificate for deduction of tax at lower rate may be issued to the person who made an application for issue of such certificate, authorising him to receive income or sum after deduction of tax at lower rate. (5) The certificates referred to in sub-rule (4) shall be valid only with regard to the person responsible for deducting the tax and named therein and certificate referred to in proviso to the sub-rule (4) shall be valid with regard to the person who made an application for issue of such certificate. (6) The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be, shall lay down procedures, formats and standards for issuance of certificates under sub-rule (4) and proviso thereto and the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) shall also be responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to the issuance of said certificate. ] ] ************ Notes: 1. Substituted vide notification no. 16/2011 dated 29-3-2011 , before it was read as, Certificate of no deduction of tax or deduction at lower rates from income other than dividends. 28AA. (1) The Assessing Officer, on an application made by a person under sub-rule (1) of rule 28, may issue a certificate in accordance with the provisions of sub-section (1) of section 197 for deduction of tax at source at the rate or rates calculated in the manner specified below :- ( i ) at such average rate of tax as determined by the total tax payable on estimated income, as reduced by the sum of advance tax already paid and tax already deducted at source, as a percentage of the payment referred to in section 197 for which the application under sub-rule (1) of rule 28 has been made; or ( ii ) at the average of the average rates of tax paid by the assessee in the last three years; whichever is higher. (2) The certificate shall be valid for the assessment year to be specified in the certificate, unless it is cancelled by him at any time before the expiry of the specified period. An application for a fresh certificate may be made, if required, after the expiry of the period of validity of the earlier certificate. (3) The certificate shall be valid only for the person named therein. (4) The certificate shall be issued direct to the person responsible for paying the income under advice to the applicant. 2. Substituted vide NOTIFICATION NO 46/2014 dated 24th September, 2014 before it was read as, (4) The certificate shall be valid only with regard to the person responsible for deducting the tax and named therein. (5) The certificate shall be issued direct to the person responsible for deducting the tax under advice to the person who made an application for issue of such certificate. 3. Substituted vide Notification No. 74/2018 dated 25-10-2018 before it was read as income, as the case may be, of the last three 4. Inserted vide Notification No. 74/2018 dated 25-10-2018 5. Omitted vide Notification No. 74/2018 dated 25-10-2018 before it was read as v) tax deducted at source for the assessment year relevant to the previous year till the date of making application under sub-rule (1) of rule 28; and (vi) tax collected at source for the assessment year relevant to the previous year till the date of making application under sub-rule (1) of rule 28. 6. Substituted vide Notification No. 74/2018 dated 25-10-2018 before it was read as 2 [(4) The certificate for no deduction of tax shall be valid only with regard to the person responsible for deducting the tax and named therein. (5) The certificate referred to in sub-rule (4) shall be issued direct to the person responsible for deducting the tax under advice to the person who made an application for issue of such certificate. (6) The certificate for deduction of tax at lower rate shall be issued to the person who made an application for issue of such certificate, authorising him to receive income or sum after deduction of tax at lower rate.]