CPC(TDS) Advisory Communication regarding Certificate u/s 197/197A for Lower or No Deduction of Tax

CPC(TDS) has issued a letter to all deductors regarding clarification of Lower Deduction/No deduction u/s 197 or 197A

The letter produced is here as under:

Date of communication: 04/02/2014   

Dear Deductor,

Greetings from CPC(TDS) team!   

CPC(TDS) team feels glad to constantly update our stakeholders with relevant advisory communications from time to time. This communication seeks to provide important information related to a Certificate issued for Deduction of Tax at Lower/ NIL Rates under section 197/197A of the Income Tax Act, 1961.

About Certificate u/s 197/ 197A:

Assessing Officer can issue a certificate for lower or no deduction of tax:

  • To the deductee, if is a resident or
  • To the deductor, where the deductee is a non-resident
  • If the Assessing Officer is satisfied that the total income of the deductee justifies deduction of tax at a lower or nil rate.

Accordingly, the clause provides that the deduction shall be made in accordance with the certificate, until such certificate is cancelled by the Assessing Officer or the expiry of the validity of the certificate, whichever is earlier.

Actions to be taken on receipt of the certificate:

  • Please validate the PAN of the deductee submitting the certificate
  • The Certificate should be valid for the PAN, Section and Rate which has been mentioned in the statement fiiled.
  • Check that the certificate is valid for the relevant Financial Year
  • Verify that the threshold limit for the certificate has not been exceeded in previous quarters.
  • Correct certificate number should be quoted in the statement. Example of Correct Certificate Number – 2XXXAH7XXE
  • Raise the Flag “A” in the statement for a certificate u/s 197 and Flag “B” for certificate u/s 197A.
  • Please ensure that the Certificate Number is mentioned in the Deductee detail of the statement. (For F.Y. 2013-14 Onwards)
  • If you are in receipt of a CPC(TDS) Intimation u/s 200A/ 154 for Short Deduction, you are requested to download the Justification report. The details of the Short Deduction due to an issue with the 197/197A certificate can be checked under the TAB “Short Deduction due to 197 Certificates”. You may verify the details and correct in accordance with the above guidelines.
  •  If a Correction Statement is being submitted, please ensure that the above has been taken care of for the Conso File downloaded from TRACES.

Please refer to our e-tutorial <https://www.tdscpc.gov.in/en/download-nsdl-conso-file-etutorial.html> for any assistance with Conso File.

Caution to be exercised for the following:

  •  Please ensure that Flag A/B is not raised for any Invalid PAN.
  •  Please do not raise Flag A/ B for a PAN which does not have the above certificate.
  •  Avoid mentioning Section code in the “Certificate Number” field of the statement.
  •  Expired certificates are not to be used.
  • Please check that the threshold limit has not been exceeded in the previous quarter.

For any further assistance, you can also write to ContactUs@tdscpc.gov.in or call our toll-free number 1800 103 0344.   

CPC (TDS) is committed to provide best possible services to you.   

CPC (TDS) TEAM

 

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13 thoughts on “CPC(TDS) Advisory Communication regarding Certificate u/s 197/197A for Lower or No Deduction of Tax

  1. prashantha k shetty

    I want to file application for certificate, u/s 197 for the f.Y: 2014-15, for deduction of lower TDS.

    What is the time limit. Is it 15 days / 30 days from start of the financial year 2014-15.

    Please advice.

    Regards,
    Prashantha.

    Reply
  2. Kishor R Shah

    Pl give me full text of circular or instsruction or notification alongwith

    annexures or other attchments narrating full particulars about issuance of

    single certificate for multiple deductors, because all the deductors now

    ask for original certificate u/s 197 whereas I have been issued only one

    and the deductors are five banks.

    Reply
  3. haresh jethva

    can i apply for lower deduction certificate for company.
    and also answer for if co. income is taxable than i get certificate.

    Please it’s urgent……

    Reply
  4. RAM AUTAR PRASAD

    It is very helpful. I request some guidance.I applied in prescribed form 13 for no deduction certificate with ITO (TDS)varanasi on 03.09.2014. reminder given on 31.10.14 some quarry made orally replied on 15.11.14. Grivance application filed on 16.01.2015 ASK no.710160115023212.
    Now letter received today dated 31.12.2014 from TDS -2 Varanasi asking for copy of Rent Agreement and calculation of interest with proof.I am Senior citizen 77 yrs old also orthopedically handicap claiming deduction 80U after adding 80C there is no tax liability up to Taxable income 5 Lacs. For last several years I am claiming total refund of TDS over Rs.42000/-I filed Three years IT returns filed and details as under
    AS Year Total Income Taxable Income Tax Refund Rec./claim

    2011-12 414177 264180 42670 Received
    2012-13 305337 205340 43680 Recd.
    2013-14 415387 260710 42730 Recd.
    2014-15 369448 213200 48920 claimed not Rec.
    the main TDS was RS.42000/- on rental income . My estimated income for 2015-16 reported was Gross rent 420000/- net 295000/- after 30% deduction allowed under law and Interest Rs.2,00000/- total 4.95.
    my request is to know the time lmit given 30 days not followed and raiseing unnecessary quarry to give documentary evidence of rental and interest income with proof is how far justified. Whom should I approach now. Last year also I applied for Certificate no reply received and matter reported to Commissioner TDS Lucknow no reply. Now I find it is sent to Addl Commissioner TDS Allahabad. I shall be grateful for your valuable advise.
    Ram Autar Prasad Retired Dy. Zonal Manager (FCI) cum Regional Director Food (GOI) Eastern Zone Mobile 9336906725 / 05422220479.

    Reply
  5. Pankaj Sultania

    I had filed the TDS return of Q4 in form 24Q. I had not filed anything in Annexure I in the coloum of Remarks (Reason for non-deduction/ lower deduction/ higher deduction) and Certificate no. issued by AO u/s 197 for non-deduction/ lower deduction.

    Non of the deductee has taken 197 certificate.

    After processing of TDS statement Department has send a demand for Short Deduction for 197 Certificate.

    What to do?/

    Reply
  6. Niranjan Sutar

    I have a query. Can you clarify this.
    I am a service receiver. One service provider provided lower TDS certificate for FY 2015-16 which was valid till 31.03.2016. The bill of the vendor for March’16 was not processed. I had kept provision for the same but did not deduct TDS at that time. Now I want to process the invoice deducting TDS. Can I process the invoice applying Lower TDS or full TDS will be applicable while processing the invoice. Party has not submitted certificate for FY 2016-17.
    Please advice!!!!

    Reply
  7. anil

    I have a problem, for F.Y-2009-10 and 2010-11 i have received 197/1 Exemption certificate from Deductee at that time there is no certificate No. now i am getting notices from department for short deduction. please solve my problem

    Reply

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