Section 395(1) read with 213(1)

Where tax is required to be deducted on any income or sum under this Chapter,

then subject to the rules made under this Act,—

(a) the payee may make an application in form 128 before the AO

for deduction of income-tax at a lower rate or

for no deduction of income-tax, as the case may be; and

(b) the AO on being satisfied that the total income of the payee justifies

deduction of income-tax at a lower rate or

no deduction of income-tax, as the case may be,

shall issue to him a certificate as appropriate; and

(c) when a certificate is issued u/c (b), the payer shall

deduct the tax at the rate specified in such certificate, or

deduct no income-tax, as the case may be,

till its validity.

Section 395(3) read with 213(1)

Where tax is required to be collected on any amount under this Chapter, then subject to the rules made under this Act,–

(a) the buyer or licensee or lessee may make an application in form 128 before the AO for collection of tax at a lower rate or nil rate;

(b) the AO on being satisfied that the total income of the buyer or licensee or lessee justifies collection of tax at a lower rate, shall issue to him a certificate as may be appropriate; and

(c) when a certificate is issued under clause (b), the person responsible for collecting tax shall collect it at the rates specified in such certificate till its validity.

Rule 213(3)

The AO may issue the certificate specified in s/r (1) after taking into consideration the following:

(a) tax payable on the estimated income for the tax year under consideration;

(b) tax paid or payable on the returned, assessed or estimated income, as the case may be, of last 4 tax years;

(c) existing liability under the Act, and the Income-tax Act, 1961;

(d) Advance tax payments, taxes deducted or collected at source at the credit of the taxpayer as on the date of application for the tax year for which application is made.

Rule 213(4)

In case of a person being

a specified entity as referred to in section 263(9)(c) or

a registered non-profit organization,

the AO, before issue of certificate specified u/sr (1),

shall in addition to conditions specified in s/sr (3) above, take into consideration the following: —

(a) the specified entity is approved for the purpose of exemption from income-tax as on the date of application and also as on date of grant of certificate for that tax year; and

(b) The person concerned has furnished the returns of income for last 4 tax years for which such returns became due on or before the date on which the application under sub-rule (1) is made.

Rule 213(5)

In a case where a certificate is to be issued in respect of dividend income referred to in section 393(1) [TSN 7],

the following conditions shall also be required to be fulfilled, in addition to conditions specified in sub-rule (3) above, namely: ––

(a) the shares in respect of which the certificate is sought shall be shares in public companies; and

(b)

(i) such shares stand in the name of the applicant and are beneficially owned by him and the dividends therefrom are not includible in total income of any other person u/s 96 to 99, or

(ii) such shares stand in the name of the applicant and are held by him on behalf of a registered non-profit organization and the dividends therefrom are exempt from tax under Chapter XVII-B

Rule 213(6)

The certificate specified u/sr (5) shall cease to operate from the date of notice to the company for transfer of shares mentioned therein to another person, to the extent of income corresponding to the shares so transferred.

Rule 213(7)

The certificate specified under this rule shall be valid for such period of the tax year as may be specified in the certificate,

unless it is cancelled by the AO at any time before the expiry of the specified period.

Rule 213(8)

The certificate shall be issued in the name of the person responsible for deducting or collecting the tax under advice to the applicant and shall be valid only in respect of––

(a) specified payment from the specified deductor to the extent of the amount specified in the certificate;

(b) Specified receipt from the specified collector to the extent of the amount specified in the certificate.

Rule 213(9)

Where the number of persons responsible for deducting the tax is likely to exceed 100 and details of such persons are not available with the applicant at the time of making application,

the certificate for deduction of income-tax at lower rate may be issued in the name of the applicant authorizing him --

(a) to receive specified payments at appropriate rate of deduction; and

(b) To generate appropriate certificate and provide to the person responsible for deducting tax; and

(c) Such certificate shall be generated from the portal of the Income-tax Department.

Rule 213(2)

The provisions of sub-rule (1) may not be applicable to the person who is eligible for a certificate of no deduction of tax in respect of income or sum specified u/r 209.

Section 395(5)

The AO may cancel the certificate granted u/sssection (1) or (3) after giving reasonable opportunity to the applicant.

Rule 209(1)

Any person, as mentioned in column B of the following Table,

entitled to receive any interest or any other sum of the nature specified in S-393(2) [TSN 17],

on fulfilment of the conditions specified in column C thereof,

may make an application in Form No. 126, for grant of a certificate u/s 395(1) authorising him to receive without deduction of tax, any such income or sum as specified in column D thereof

SN

Person

Conditions

Nature of income

A

B

C

D

1.

Banking company or

an insurer (as defined in S-(2)(9)(d) of Insurance Act,

which is not a domestic company, and

which carries on operations in India through a branch.

(a) The person concerned

has been regularly assessed to income-tax in India and

has furnished the returns of income for last 5 tax years for which such returns became due on or before the date on which the application under this rule is made;

(b) he is not in default or deemed to be in default in respect of any tax (including advance tax and tax payable u/s 266), interest, penalty, fine, or any other sum payable under the Act; and

(c) the interest or other sum is receivable by the branches on their own account and not on behalf of its head office or any branch situated outside India, or any other person.

Interest, not being interest on securities

(other than

interest on

securities referred to in

S-393(4) [TSN

 6]), or

any other sum,

not being dividends.

2.

Any person other than the person referred to in SN 1 who carries on a business or profession in India through a branch.

(a) The conditions specified in Sl. No. 1;

(b) he has been carrying on business or profession in India continuously for a period of not less than 5 years immediately preceding the date of the application; and

(c) the value of the fixed assets in India of such business or profession as shown in his books of account for the tax year, which ended immediately before the date of the application, or where the accounts in respect of such tax year have not been made up before the said date, the tax year immediately preceding that year, exceeds Rs.50 lacs.

Any sum not being interest or dividends.

Rule 209(2)

The certificate granted by the AO u/s 395(1)

shall be valid for the tax year specified therein,

unless it is cancelled by him at any time before the expiry of the said tax year.

Rule 209(3)

An application for a fresh certificate may be made, if required,

after the expiry of validity of the earlier certificate, or

within 3 months before the expiry thereof.

Section 395(2)

(a) Person responsible for paying to a non-resident any sum as mentioned in section 393(2) (TSN 17),

may make an application to the AO in form 129 and manner as may be prescribed,

where he considers that the whole of such sum would not be chargeable in the case of the recipient;

(b) the application u/c (a) shall be for determination of the appropriate proportion of the sum chargeable to tax, by the AO in the manner as may be prescribed; and

(c) when the determination is made by the AO as per clause (b), the tax shall be deducted u/s 393(2) (TSN 17) only on that proportion of sum which is chargeable to tax under the Act.

Rule 214(1)

An application by a person for determination of appropriate proportion of sum chargeable in the case of non-resident recipient u/s 395(2) or 400(3), shall be made in Form No. 129.

Rule 214(2)

The AO shall examine, whether the sum being paid or credited by such person to the non-resident

is chargeable to tax under the Act read with the relevant Double Taxation Avoidance Agreement, if any, and—

(a) where the whole of such sum would not be the income chargeable in case of the non-resident recipient, he shall proceed to determine the appropriate proportion of such sum chargeable to tax; and

(b) Issue a certificate thereof for tax deduction u/s 393(2) [TSN 17].

Rule 214(3)

The AO shall issue the certificate specified in s/r (2), after taking into consideration the following in relation to the recipient:—

(a)  tax payable on estimated income of the relevant tax year;

(b) tax payable on the assessed or returned or estimated income, as the case may be, of preceding four tax years;

(c) existing liability under the Act, and the Income-tax Act, 1961 (as it existed prior to its repeal); and

(d) Advance tax payment, tax deducted at source and tax collected at source for the relevant tax year, till the date of making application or till the date of issuance of certificate.

Rule 214(4)

The certificate shall be valid only for the payment to non-resident named therein and for such period of the tax 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.

Rule 214(5)

An application for a fresh certificate may be made by the assessee

after the expiry of the period of validity of the earlier certificate, or

within 3 months before the expiry thereof.

Section 395(4)(a)

Every person deducting or collecting tax shall issue a certificate to the deductee or collectee, as the case may be, specifying–

(i) the amount of tax that has been deducted or collected;

(ii) the rate at which tax has been deducted or collected; and

(iii) any other particulars, as may be prescribed,

within such period as may be prescribed;

Section 395(4)(b)

An employer referred to in section 392(2)(a) shall issue a certificate to the employee, in respect of whose income payment of tax has been made by the employer, that the tax has been paid to the CG, and specify–

(i) the amount of tax so paid;

(ii) the rate at which tax has been paid; and

(iii) any other particulars, as may be prescribed,

within such period, as may be prescribed.

Rule 215(1)

The certificate of

deduction or collection of tax at source by any person under Chapter XIX-B of the Act or

payment of tax by the employer on behalf of the employee u/s 392(2)(a),

corresponding to sections under which deductions, payments or collections are made as referred to in column B of the following table,

shall be furnished to the employee, or payee, or buyer, or licensee, or lessee, as the case may be,

after generating and downloading the same from the web portal specified by the DGIT (Systems) or the person authorised by him,

in the Form as referred in column C thereof and

within the time specified in corresponding entry in column D of the said Table:

SN

Section under which tax deducted, paid or collected

Form

Due date

A

B

C

D

1

Deduction under section

392 - Salaries

393(1) [TSN 8(iii)] - Payment by Specified Bank to specified senior citizen

Other than

392(7) - Payment of accumulated bal. from EPFS

130

By the 15th June of FY immediately following the tax year in which the income was paid and tax deducted.

2

Deduction under section

392(7) - Payment of accumulated bal. from EPFS

393(1) - Payment to Resident

393(2) - Payment to Non Resident

393(3) - Payment to any person

Other than

[TSN (2)(i), (3)(i), (6)(ii), and (8)(vi)]

131

Within 15 days from the due date for furnishing statement of tax deducted at source u/r 219.

 3

Deduction u/s 393(1)–

(a) TSN (2)(i) – Rent by person other than specified person

(b) TSN (3)(i) - Consideration for transfer of any immovable property^[S-402(9)]

(c) TSN (6)(ii) – Works contract, professional fees, commission by individual, HUF other than specified person

(d) TSN (8)(vi) - Consideration for transfer of a virtual digital asset

132

Within 15 days from the due date for furnishing challan-cum statement in Form No. 141.

4

Collection u/s 394(1).

133

Within 15 days from the due date for furnishing statement of tax collected at source u/r 219.

Rule 215(2)

If an assessee is employed by more than one employer during the year, each of the employers shall issue Parts A and B of the certificate in Form No. 130, pertaining to the period for which such assessee was employed with each of the employers

and Part C may be issued by each of the employers or the last employer at the option of the assessee.

Rule 215(3)

The deductor or collector may issue a duplicate certificate in Form No. 130 or Form No. 131 or Form No. 133, as the case may be,

if the deductee or collectee has lost the original certificate so issued and makes a request for issuance of a duplicate certificate

and such duplicate certificate is certified as duplicate by the deductor or collector.

Rule 215(4)

Where a certificate is to be furnished in Form No. 130, 131, 132, or 133,

the deductor may, at his option, use digital signatures to authenticate such certificates.

Rule 215(5)

In case of certificates issued u/sr (4), the person furnishing the certificate shall ensure that—

(a) once the certificate is digitally signed, the contents of the certificates are not amenable to change; and

(b) the certificates have a control number and a log of such certificates is maintained by the deductor.

Rule 215(6)

For the purposes of this rule, challan identification number means the number comprising

the Basic Statistical Returns (BSR) Code of the Bank branch where the tax has been deposited,

the date on which the tax has been deposited and

Challan Serial Number given by the bank.

Rule 215(7)

The certificate shall be generated and downloaded in accordance with the procedures, formats and standards specified u/r 332.