Section 197 - Certificate for no or lower deduction of tax - Income Tax - Ready Reckoner - Income Tax

Certificate for no or lower deduction of tax - Section 197 For which section can apply Certificate for no or lower deduction tax certificate Where the total income of the recipient of income is not liable to tax or is taxable at lower rates, then such recipient of income can make an application to assessing officer to issue a certificate for no deduction/ lower deduction of TDS from his income under the provisions of sections 192 , 193 , 194 , 194A , 194C , 194D , 194G , 194H , 194-I , 194J , 194K , 194LA , 194LBA [Inserted by FA, 2023 ] , 194LBB , 194LBC , 194M , 194-O , 194Q [Inserted by FA, 2024 w.e.f. 01.10.2024] and 195 ,. The Assessing Officer shall, on an application made by the assessee in this behalf, give to him such certificate as may be appropriate. Validity of Certificate In such a case, the payer shall deduct income tax as per the rates specified in the certificate till such time the certificate is cancelled by Assessing Officer. No certificate u/s 197 for deduction of tax at NIL rate or lower rate shall be granted unless the application made under the section contains the PAN of the applicant. Application made doe Lower rate or no deduction certificate Procedure, format and standards for filling an application for grant of certificate under rule 28AA(4) and its proviso of Rule 28AA of Income Tax Rules, 1962, for deduction of Income-tax at any lower rate or no deduction of Income-tax u/s 197(1). [ Notification No. 02/2023 Dated 27.09.2023 ] Procedure of filling application completely electronically, Filling of Form 13 with annexure-II shall be as follows: For making an application in Form 13 with Annexure II the taxpayer/ Deductee shall login into the TRACES website (www.tdscpc.gov.in), for grant of certificate for deduction of Income-tax at any lower rate or no deduction of Income-tax under section 197(1) of the Income-tax Act, 1961. The tax-payer/ Deductee who is not registered at TRACES website shall have to first register with his Permanent Account Number ( PAN ) at TRACES (www.tdscpc.gov.in) for login and filling application in Form 13 along-with Annexure II. The tax-payer/Deductee shall login at TRACES website ( www.tdscpc.gov.in) and submit the Form No. 13 along-with Annexure II with supporting documents using any of the following, (i) Digital Signature, (ii) Electronic Verification Code, (iii) Aadhar based Authentication, (iv) Mobile OTP. Applicants accessing TRACES website from outside of India shall login at TRACES website (www.nriservices.tdscpc.gov.in) and submit application in Form No. 13 along with supporting documents using Digital Signature only. The applicant can track the status of the application through option Track Request for Form 13 / 15C / 15D under the tab Statements/Forms . Following documents required to be attached with the application made in form 13 for successfully submittion Processed data of Income Tax Returns of previous 4 financial years (if available). PAN Demand. E-filed Income-Tax Returns of previous 4 financial years. Audit Report (along with form 3CD if accounts are audited) of previous 4 financial years. Assessment Orders of previous 4 financial years (if available). For application filed in Delhi, Mumbai, Chennai, Kolkata, Bangalore, Hyderabad, Ahmedabad and Pune, cases where revenue forgone exceeds a sum of Rs. 50 Lakh, the applications shall be assigned to the DCIT/ACIT exercising jurisdiction over TDS matters, and in other cases, the applications shall be assigned to the ITO exercising jurisdiction over TDS matters. If the jurisdiction orders are otherwise, the applications shall be assigned in accordance to such jurisdiction orders. The applications shall be assigned to the TDS AO exercising jurisdiction over TDS matters in such applicant . However, if the jurisdiction orders are otherwise, the assigned AO can transfer the applications to the AO concerned on AO Portal. For application filed in remaining cities/ towns/jurisdictions, the application where revenue foregone exceeds a sum of Rs. 10 Lakh, application shall be assigned to the DCIT/ACIT exercising jurisdiction over TDS matters, and in other cases, the applications shall be assigned to the ITO exercising jurisdiction over TDS matters. If the jurisdiction orders are otherwise, the applications shall be assigned in accordance to such jurisdiction orders. The applications shall be assigned to the TDS AO exercising jurisdiction over TDS matters in respect of the applicant as explained in para 6.2 and 6.3. However, if the jurisdiction orders are otherwise, the assigned AO can transfer the applications to the AO concerned on AO Portal. Additional condition for in case of certain entities who claims exemption under section 11 or 12 and referred in section 139(4C) [ Rule 28AB ] If recipient is following two entities ( a ) in receipt of income or deemed income derived from property held under trust wholly for charitable or religious purposes and who claims exemption under section 11 or 12; or ( b ) required to file a return in respect of a scientific research association, news agency, association or institution, fund or trust or university or other educational institution or any hospital or other medical institution or trade union referred to in sub-section 139(4C), may make an application to the Assessing Officer for the grant of a certificate u/s 197(1) authorizing him to receive incomes without deduction of tax at source. Additional Condition The person concerned has furnished the returns of income for all assessment years for which such returns became due on or before the date on which the application under rule 28AB(1) is made and The trust, scientific research association, news agency, association or institution, fund or trust or university or other educational institution or any hospital or other medical institution or trade union referred to in rule 28AB(1) is for the time being approved for the purpose of exemption from income-tax