Quick Summary
The government has proposed to enable electronic filing and issuance of certificates for deduction of income-tax at a lower rate or nil rate. This amendment relates to Section 395 of the Income-tax Act and is aimed at reducing procedural hurdles, particularly for small taxpayers. Existing Framework under Section 395 Currently, Section 395 of the Act governs the issuance of certificates allowing lower or no deduction of tax at source (TDS) and tax collection at source (TCS). Under the existing
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FAQ :
From 1st April 2026, applications for lower or nil TDS certificates can be filed and issued electronically, replacing the current manual process.
The proposed amendment is set to take effect from 1st April 2026, subject to enactment.
The amendment relates to Section 395 of the Income-tax Act.
Small taxpayers and businesses are expected to benefit most, as the electronic process aims to ease compliance and reduce cash-flow constraints caused by higher TDS deductions.
The prescribed income-tax authority will review the application and may issue the certificate electronically if conditions are met, or reject it if conditions are not fulfilled or the application is incomplete.
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