The Income-Tax Act, 1961

197. Certificate for deduction at lower rate.-

(1) ⁴[Subject to rules made under sub-section (2A), ⁵[where, in the case of ⁶[any income of any person or sum payable to 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, ⁷[194,] ⁸[194A, ⁹[194C, 194D ,194G ,194H ,194-I, 194J , 194K , 194LA ¹⁰[, 194LBB, 194LBC]]] and 195, the Assessing Officer is satisfied]] that the total income 11*** of the recipient justifies the deduction of income-tax 12*** at any lower rates or no deduction of incometax 12***, as the case may be, the 1³[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-tax14*** 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.]

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4. Subs. by Act 11 of 1987, s. 51, for "Where in the case of any income of any person other than a company" (w.e.f. 1-6-1987).

5. Subs. by Act 18 of 1992, s. 76, for certain words (w.e.f. 1-6-1992).

6. Subs. by Act 32 of 2003, s. 84, for "any income of any person" (w.e.f. 1-6-2003).

7. Ins. by Act 38 of 1993, s. 29 (w.e.f. 1-6-1993).

8. Subs. by Act 32 of 2003, s. 84, for "194A, 194D, 194H, 194-I, 194K, 194L" (w.e.f. 1-6-2003).

9. Subs. by Act 23 of 2004, s. 39, for "194C, 194D, 194G, 194H, 194-I, 194J, 194K" (w.e.f. 1-10-2004).

10. Ins. by Act 28 of 2016, s. 85 (w.e.f. 1-6-2016).

11. The words "or the total world income" omitted by Act 10 of 1965, s. 48 (w.e.f. 1-4-1965).

12. The words "or super-tax" omitted by s. 48, ibid. (w.e.f. 1-4-1965).

13. Subs. by Act 4 of 1988, s. 2, for "Income-tax Officer" (w.e.f. 1-4-1988).

14. The words "and super-tax" omitted by Act 10 of 1965, s. 48 (w.e.f. 1-4-1965).

15. Ins. by Act 11 of 1987, s. 51 (w.e.f. 1-6-1987).

16. Sub-section (3) omitted by Act 23 of 1986, s. 39 (w.e.f. 1-4-1987).

¹[197A. No deduction to be made in certain cases.-

(1) Notwithstanding anything contained in 2*** section 194 3*** ⁴[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 2*** section 194 ⁵[ 3*** 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 ⁶[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.]

⁷[(1A)Notwithstanding anything contained in ⁸[section 192A or section 193 or section 194A ⁹[or section 194D] or section 194DA] ¹⁰[or section 194-I] or section 194K, no deduction of tax shall be made under 1¹[any 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 ⁸[section 192A or section 193 or section 194A ⁹[or section 194D] or section 194DA] ¹⁰[or section 194-I] or section 194K, as the case may be, a declaration in writing in duplicate in the prescribed form 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.]

1²[(1B) The provisions of this section shall not apply where the amount of any income of the nature referred to in sub-section (1) or sub-section (1A), as the case may be, or the aggregate of the amounts of such incomes credited or paid or likely to be credited or paid during the previous year in which such income is to be included exceeds the maximum amount which is not chargeable to income-tax.]

1³[(1C) Notwithstanding anything contained in 1⁴[section 192A or section 193 or section 194 or section 194A ⁹[or section 194D] or section 194DA] or section 194EE ¹⁰[or section 194-I] or section 194K or sub-section (1B) of this section, no deduction of tax shall be made in the case of an individual resident in India, who is of the age of 1⁵[sixty years] or more at any time during the previous year16***, if such individual furnishes to the person responsible for paying any income of the nature referred to in 1⁴[section 192A or section 193 or section 194 or section 194A ⁹[or section 194D]or section 194DA] or section 194EE ¹⁰[or section194-I] or section 194K, as the case may be, a declaration in writing in duplicate in the prescribed formand 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.]

¹[(1D) Notwithstanding anything contained in this section, no deduction of tax shall be made by the Offshore Banking Unit from the interest paid-

(a) on deposit made on or after the 1st day of April, 2005, by a non-resident or a person not ordinarily resident in India; or

(b) on borrowing, on or after the 1st day of April, 2005, from a non-resident or a person not ordinarily resident in India.

Explanation.-For the purposes of this sub-section "Offshore Banking Unit" shall have the same meaning as assigned to it in clause (u) of section 2 of the Special Economic Zones Act, 2005.]

²[(1E) Notwithstanding anything contained in this Chapter, no deduction of tax shall be made from any payment to any person for, or on behalf of, the New Pension System Trust referred to in clause (44) of section 10.]

³[(1F) Notwithstanding anything contained in this Chapter, no deduction of tax shall be made from such specified payment to such institution, association or body or class of institutions, associations or bodies as may be notified by the Central Government in the Official Gazette, in this behalf.]

(2) The person responsible for paying any income of the nature referred to in sub-section (1) ⁴[or sub-section (1A)] ⁵[or sub-section (1C)] shall deliver or cause to be delivered to the ⁶[ ⁷[Principal Chief Commissioner or Chief Commissioner] or ⁸[Principal Commissioner or Commissioner]] one copy of the declaration referred to in sub-section (1) ⁴[or sub-section (1A)] ⁵[or sub-section (1C)] on or before the seventh day of the month next following the month in which the declaration is furnished to him.]

1. Ins. by Act 14 of 1982, s. 26 (w.e.f. 1-6-1982).

2. The words and figures "section 193 or" omitted by Act 27 of 1999, s. 77 (w.e.f. 1-6-1999).

3. The words and figures "or section 194A" omitted by Act 18 of 1992, s. 77 (w.e.f. 1-6-1992).

4. Ins. by Act 49 of 1991, s. 59 (w.e.f. 1-10-1991).

5. Subs. by s. 59, ibid., for "or, as the case may be, section 194A" (w.e.f. 1-10-1991).

6. Subs. by Act 12 of 1990, s. 50, 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" (w.e.f. 1-4-1990).

7. Subs. by Act 22 of 1995, s. 39, for sub-section (1A) (w.e.f. 1-7-1995).

8. Subs. by Act 20 of 2015, s. 50, for "section 193 or section 194A" (w.e.f. 1-6-2015).

9. Ins. by Act 7 of 2017, s. 70 (w.e.f. 1-6-2017).

10. Ins. by Act 28 of 2016, s. 86 (w.e.f. 1-6-2016).

11. Subs. by Act 27 of 1999, s. 77, for "either of" (w.e.f. 1-6-1999).

12. Ins. by Act 20 of 2002, s. 85 (w.e.f. 1-6-2002).

13. Ins. by Act 32 of 2003, s. 85 (w.e.f. 1-6-2003).

14. Subs. by Act 20 of 2015, s. 50, for "section 193 or section 194 or section 194A" (w.e.f. 1-6-2015).

15. Subs. by Act 23 of 2012, s. 78, for "sixty-five years" (w.e.f. 1-7-2012).

16. The words, figures and letter "and is entitled to a deduction from the amount of income-tax on his total income referred to in section 88B" omitted by Act 22 of 2007, s. 58 (w.e.f. 1-4-2006).

1. Ins. by Act 28 of 2005, s. 27 and the Second Schedule (w.e.f. 10-2-2006).

2. Ins. by Act 33 of 2009, s. 63 (w.e.f. 1-4-2009).

3. Ins. by Act 23 of 2012, s. 78 (w.e.f. 1-7-2012).

4. Ins. by Act 18 of 1992, s. 77 (w.e.f. 1-6-1992).

5. Ins. by Act 32 of 2003, s. 85 (w.e.f. 1-6-2003).

6. Subs. by Act 4 of 1988, s. 2, for "Commissioner" (w.e.f. 1-4-1988).

7. Subs. by Act 25 of 2014, s. 4, for "Chief Commissioner" (w.e.f. 1-6-2013).

8. Subs. by s. 4, ibid., for "Commissioner" (w.e.f. 1-6-2013).

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