Quick Summary
Section 197 of the Act relates to grant of a certificate of tax deduction at lower or nil rate. It provides for assessee to apply to the Assessing Officer for TDS at zero rate or lower rate, if the tax is required to be deducted under sections 192, 193, 194, 194A, 194C, 194D, 194G, 194H, 194-I, 194J, 194K, 194LA, 194LBB, 194LBC, 194M, 194-O and 195 of the Act. If the Assessing Officer is satisfied that the total income of the recipient justifies the deduction of income-tax at any lower rates or
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FAQ :
Section 197 of the Act allows assessees to apply to the Assessing Officer for a certificate to have tax deducted at source (TDS) at a zero or lower rate, provided certain conditions regarding total income are met.
The proposal is to amend Section 197 to include sums on which tax is required to be deducted under Section 194LBA of the Act, making them eligible for a certificate for lower rate tax deduction.
This amendment is intended to remove difficulties faced by entities such as Sovereign Wealth Funds and Pension Funds, who are exempt under Section 10(23FE) but could not get the benefit of lower TDS rates under Section 194LBA previously.
This amendment will take effect from 1st April 2023.
The tax deduction under Section 194LBA of the Act is now included.
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