New Rule from 1 October 2023 for Low TDS or No TDS Certificate U.S.197 of I-T Act

The Central Board of Direct Taxes (CBDT) has introduced new rules regarding the process of obtaining Low Tax Deduction at Source (TDS) or No TDS certificates from the Income Tax (I-T) department, as per Notification No-2/2023 dated September 27, 2023. These rules, empowered by the Income-tax Rules, 1962, aim to streamline the procedure for electronic filing of Form 13 with Annexure – II and the generation of certificates under section 197.

Section 197 of the Income-tax Act, 1961, enables individuals or entities to request a deduction of income tax at a lower rate or even no deduction at all, depending on their total income. The Assessing Officer, upon a valid application, can issue a suitable certificate for this purpose.

Rule 28 of the Income-tax Rules, 1962 outlines the process of applying for a certificate for deduction of Income-tax at a reduced rate or without any deduction. This application is to be submitted electronically through Form No. 13, following the prescribed procedures and formats set by the Principal Director General of Income-tax (Systems).

Furthermore, under the proviso to sub-rule (4) of Rule 28AA, certificates for a reduced tax rate can be issued when the number of individuals responsible for tax deduction is likely to exceed one hundred, and their details are not available at the time of application. Sub-rule (6) of Rule 28AA grants authority to the Director General of Income-tax (Systems) to establish the procedures, formats, and standards for issuing these certificates.

Starting from October 1, 2023, these guidelines will be in effect, making it more convenient for taxpayers to apply for reduced TDS or exemption from TDS, in compliance with the specified rules and procedures.

Follow the Link to Access the CBDT Notification No.2/2023 Dt.27 September 2023-https://incometaxindia.gov.in/communications/notification/notification-02-2023-27-09-2023.pdf

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