A procedure, format, and standards for filling an application for grant of certificate under sub-rule (4) and its proviso of Rule 28AA of Income Tax Rules, 1962 (“the IT Rules”), for deduction of Income-tax at any lower rate or no deduction of Income-tax under sub-section (I) of section 197 of the Income-tax Act, 1961 (“the IT Act”) through TRACES is been provided by the CBDT, Directorate of Income-tax (Systems) vide Notification No.02/2023 on September 27, 2023.
For the case of any income of any individual or sum obligated to pay before anyone, under sub-section (I) of section 197 of the Income-tax Act, 1961(the Act) an income tax needed to be deducted during the time of credit or as per the case might be during the period of payment on the rates in force under the provisions of sections 192,193,194, 194A, 194C, 1940, 194G, 194H, 194-1, 194J, 194K, 194LA, [194LBA] 194LBB, 194LBC, 194M, 194-0 and 195, when the assessing officer is pleased that the total income of the receiver explains the deduction of the income tax at any lower rates or no deduction of the income tax as per the case the assessing officer will for the application that the taxpayer incurred in this grounds provided to him such certificate as might be suitable.
Rule 28 of the Income-tax Rules, 1962 stipulates the process for submitting an application to obtain a certificate for either reducing the rate of Income-tax deduction or exempting it entirely under section 197(I) of the Act. This application should be filed electronically using Form No. 13, following the secure data capture and transmission procedures, formats, and standards determined by the Principal Director General of Income-tax (Systems).
In addition, the proviso within sub-rule (4) of Rule 28AA of the Income Tax Rules, 1962, outlines the issuance of certificates for lower tax deductions. These certificates authorize the applicant to receive income or payments with reduced tax deductions.
This provision applies in cases where the number of individuals responsible for deducting tax is expected to exceed one hundred, and their details are unavailable at the time of the application. Furthermore, sub-rule (6) of Rule 28AA of the Income-tax Rules, 1962, empowers the Director General of Income-tax (Systems) to establish the procedures, formats, and standards for issuing certificates as outlined in the proviso to sub-rule (4) of Rule 28AA of the Income Tax Rules, 1962.
Pursuant to the authority granted under sub-rule (2) of Rule 28 and sub-rule (6) of Rule 28AA of the Income-tax Rules, 1962, the Director General of Income-tax (Systems) hereby defines the process, format, and standards for the electronic submission of Form 13 with Annexure – II and the subsequent issuance of certificates under sub-section (1) of section 197 in conjunction with the proviso stated in sub-rule (4) of Rule 28AA of the Income Tax Rules, 1962, utilizing the TRACES platform. The procedures outlined in the following sections will become effective from October 01, 2023.
- Process for electronic filing of Form 13 with annexure-II
- Method for assignment of application to the TDS Assessing Officer (AO)
- Functioning of the tax-payer /Deductee’s request by the AO, Range Heads, and Commissioners of the Income-tax department:
- Role of AO
- Role of Range head
- Role of the CIT
- Issuance of Certificate
- Consumption/ Tracking of Certificate
