Certificate of tax u/s194C(4). - Income Tax - 1434/CBDT

INSTRUCTION NO. 1434/CBDT Dated: December 2, 1981 The Board have occassion to review the working of sec.194 C of the I.T.Act in the context of maximising the collection of tax. In accordance with the provisions of sub section 1 and 2 of the said section tax at the rates prescribed by the Finance Act of the relevant year has to be deducted by the person responsible for making the payment to the contractors/sub-contractors for carrying out anywork. The ITO can issue a certificate on the application for making the payment to deduct tax at a lower rate of not to deduct tax from such payments if he is satisfied that the total income of the applicant justifies it. 2. While present practice regarding issue of certificates to contractors/ sub-contractors who are registered firms, for deductions of tax at source at a lower rate worked out on the basis of the firms tax alone may continue but the board desires that the field officers should ensure that certificate u/s.194C(4) is issued after satisfying themselves inter alia that partners have paid their proper tax. 3. These instructions may please be brought to the notice of all the officers working in your charge.