Income-tax Act,1961
Act No : 43
Section :
Certificate for deduction at lower rate 1.
197. Certificate for deduction at lower rate 1 (1) 2 [Subject to rules made under sub-section (2A),] 3[where, in the case of any income of any person, income-tax is required to be deducted at the time of credit or, as the case may be, at the time of payment at the rates in force under the provisions of sections 192, 193, 4[194,] 194A, 194D, 5[, 194-I] 6[, 194K] and 195, the Assessing Officer is satisfied] that the total income 7[* * *] of the recipient justifies the deduction of income-tax 8[* * *] at any lower rates or no deduction of income-tax 9[* * *], as the case may be, the 10[Assessing] Officer shall, on an application" made by the assessee in this behalf, give to him such certificate as may be appropriate." (2) Where any such certificate is given, the person responsible for paying the income shall, until such certificate is cancelled by the 13 [Assessing] Officer, deduct income-tax 14[* * *] at the rates specified in such certificate or deduct no tax, as the case may be. 15[(2A) The Board may, having regard to the convenience of assessees and the interests of revenue, by notification in the Official Gazette, make rules specifying the cases in which, and the circumstances under which, an application may be made for the grant of a certificate under sub-section (1) and the conditions subject to which such certificate may be granted and providing for all other matters connected therewith.] ---------------------------------------------------------------------- 2 Inserted by the Finance Act, 1987, w.e.f. 1-6-1987. See also rules 28, 28AA and Form No. 15AA. 3 Substituted for "where, in the case of any income of any person other than a company,- (a) income-tax is required to be deducted at the time of credit or, as the case may be, at the time of payment at the rates in force under the provisions of sections 192, 193, 194A, 194D and 195, (b) being a non-resident, income-tax is required to be deducted at the time of payment at the rates in force under the provisions of section 194. the Assessing Officer is satisfied" by the Finance Act, 1992, w.e.f. 1-6-1992. Earlier, the substituted words were amended by the Finance Act, 1965, w.e.f 1-4-1965; Finance (No. 2) Act, 1967, w.e.f. 1-4-1967; Finance Act, 1972, w.e.f. 1-4-1972; Finance Act, 1973, w.e.f. 1-4- 1973; Finance Act, 1978, w.e.f. 1-4-1978; Finance Act, 1986, w.e.f. 1- 4-1987 and the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 4 Inserted by the Finance Act, 1993, w.e.f. 1-6-1993. 5 Inserted by the Finance Act, 1994, w.e.f. 1-6-1994. 6 Inserted by the Finance Act, 1995, w.e.f. 1-7-199.5. 7 The words "or the total world income" omitted by the Finance Act, 1965, w.e.f. 1-4-1965. 8 The words "or super-tax" omitted by the Finance Act, 1965, w.e.f. 1-4-1965. 9 ]bid. 10 Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 13 Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 14 The words "and super-tax" omitted by the Finance Act, 1965, w.e.f. 1-4-1965. 15 Inserted by the Finance Act, 1987, w.e.f. 1-6-1987. ----------------------------------------------------------------------- 1.635 1[(3) Omitted by the Finance Act, 1986, w.e.f. 1-4-1987.] 2[ 197A. No deduction to be made in certain cases3 4( 1) Notwithstanding anything contained in section 193 or section 194 5[* * *] 6[or section 194EE], no deduction of tax shall be made under any of the said sections in the case of an individual, who is resident in India, if such individual furnishes to the person responsible for paying any income of the nature referred to in section 193 or section 194 7[8[* * *] or, as the case may be, section 194EE], a declaration in writing in duplicate in the prescribed form and verified in the prescribed manner to the effect that 9[the tax on his estimated total income of the previous year in which such income is to be included in computing his total income will be nil]. 10[(1A) Notwithstanding anything contained in section 194A or section ---------------------------------------------------------------------- 1 Prior to the omission, sub-section (3), as substituted by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1968, read as under: "(3) Where the principal officer of a company considers that, by reason of the provisions of section 80K, the whole or any portion of the dividend referred to in section 194 will be deductible in computing the total income of the recipient, he may, before paying the dividend to the shareholder or issuing any cheque or warrant in respect thereof, make an application to the Income-tax Officer to determine the appropriate proportion of the dividend to be deducted under the provisions of section 80K; and on such determination by the Income-tax Officer no tax shall be deducted on such proportionate amount."_ Inserted by the Finance Act, 1982, w.e.f. 1-6-1982. 5 The words "or section 194A" omitted by the Finance Act, 1992, w.e.f. 1-6-1992. 6 Inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991. 7 Substituted for "or, as the case may be, section 194A" by the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991. 8 The words "or section 194A" omitted by the Finance Act, 1992, w.e.f. 1-6-1992. 9 Substituted for "his estimated total income of the previous year in which such income is to be included in computing his total income will be less than the minimum liable to income-tax" by the Finance Act, 1990, w.e.f. 1-4-1990. 10 Substituted by the Finance Act, 1995, w.e.f. 1-7-199.5. Prior to the substitution, subsection (1A), as inserted by the Finance Act, 1992, w.e.f. 1-6-1992, read as under: "(1A) Notwithstanding anything contained in section 194A, no deduction of tax shall be made under that section in the case of a person (not being a company or a firm), if such person furnishes to the person responsible for paying any income of the nature referred to in that section, a declaration in writing in duplicate in the prescribed form and verified in the prescribed manner to the effect that the tax on his > -> ----------------------------------------------------------------------- 1.636 194K, no deduction of tax shall be made under either of the said sections in the case of a person (not being a company or a firm), if' such person furnishes to the person responsible for paying any income of the nature referred to in section 194A or section 194K, as the case may be, a declaration in writing in duplicate in the prescribed form I and verified in the prescribed manner to the effect that the tax on his estimated total income of the previous year in which such income is to be included in computing his total income will be nil.] (2) The person responsible for paying any income of the nature referred to in sub-section ( 1 ) 2 [or sub-section (1A)] shall deliver or cause to be delivered to the 3[Chief Commissioner or Commissioner] one copy of the declaration referred to in sub-section (1) 4[or sub- section (1A)] on or before the seventh day of the month next following the month in which the declaration is furnished to him.]
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