Certificate For Deduction OF Tax At a Lower Rate [Section 197] | AY 2019-20 onwards

Applicability

This section applies where, in the case of any income of any person or sum payable to any person, income-tax is required to be deducted at the time of credit or payment, as the case may be at the rates in force as per the provisions of sections  -

• Salary (Section 192)
• Interest on Securities (Section 193)
• Dividends (Section 194)
• Interest other than interest on securities (Section 194A)
• Payment to Contractors and Sub-Contractors (Section 194C)
• Insurance Commission (Section 194D)
• Commission on sale of lottery tickets (Section 194G)
• Commission or Brokerage (Section 194H)
• TDS on Rent (Section 194I)
• TDS on Professional service, Technical Service, Remuneration to Director, Royalty, Non-compete fees (Section 194J)
• Income in respect of units (Section 194K) - Omitted by the Finance Act, 2016, w.e.f 01.06.2016
• Payment on transfer of certain immovable property other than agricultural land (Section 194LA)
• Income in respect of units of investment Fund (Section 194LBB)
• Income in respect of investment in securitization trust (194LBC)
• Payment made to Non-Residents (Section 195)

Provision

1. In such cases, the assessee can make an application to the Assessing Officer for deduction of tax at a lower rate or for non-deduction of tax.
2. If the Assessing Officer is satisfied that the total income of the recipient justifies the deduction of income-tax at lower rates or no deduction of income-tax, as the case may be, he may give to the assessee such certificate, as may be appropriate.
3. Where the Assessing Officer issues such a certificate, then the person responsible for paying the income shall deduct income-tax at such lower rates specified in the certificate or deduct no tax, as the case may be, until such certificate is cancelled by the Assessing Officer.
4. Enabling powers have been conferred upon the CBDT to make rules for prescribing the procedure in this regard.