CBDT guideline for procedure to deduct income tax at lower rate

In accordance with section 197(1) of the Income-tax Act, 1961, if there is a requirement to deduct income tax on any income or payment to an individual, as stipulated under various sections such as 192, 193, 194, 194A, 194C, 194D, 194G, 194H, 194-1, 194J, 194K, 194LA, 194L8A, 194L88, 194L8C, 194M, 194-0, and 195, the Assessing Officer has the authority to consider deducting income tax at a lower rate or even exempting it entirely if they are convinced that the recipient’s total income justifies such a reduction or exemption. To avail of this benefit, the assessee may apply to the Assessing Officer, who will then issue the appropriate certificate accordingly.

Under the provisions of the Income-tax Rules, 1962, Rule 28 outlines the process for submitting an application requesting a certificate for the reduced deduction of income tax or exemption from income tax deductions as per Section 197(1) of the Income-tax Act. This application should be submitted electronically using Form No. 13. The electronic submission must adhere to the specified procedures, formats, and security standards to ensure the safe capture and transmission of data, as well as the uploading of relevant documents. These standards are determined and enforced by the Principal Director General of Income-tax (Systems).