Where the Assessing Officer, on an application made by a person under sub-rule (1) of rule 28 is satisfied that existing and estimated inome tax (IT) liability of a person justifies the deduction of income tax at lower rate or no deduction of tax, as the case may be, the Assessing Officer shall issue a certificate in accordance with the provisions of sub-section (1) of section 197 for deduction at a lower rate or no deduction.
The existing and estimated liability referred to in sub-rule (1) shall be determined by the Assessing Officer after taking into consideration the following:—
- IT payable on estimated income of the previous year relevant to the assessment year;
- IT payable on the assessed or returned income, as the case may be, of the last three previous years;
- existing liability under the IT Act, 1961 and Wealthtax Act, 1957;
- advance tax payment for the assessment year relevant to the previous year till the date of making application under sub-rule (1) of rule 28;
- TDS for the assessment year relevant to the previous year till the date of making application under sub-rule (1) of rule 28; and
- TCS for the assessment year relevant to the previous year till the date of making application under sub-rule (1) of rule 28.
The certificate of deduction of IT at lower rate or no deduction of tax shall be valid for such period of the previous year as may be specified in the certificate, unless it is cancelled by the Assessing Officer at any time before the expiry of the specified period.
The certificate shall be valid only with regard to the person responsible for deducting the TDS and named therein.
The certificate shall be issued directly to the person responsible for deducting it under advice to the person who made an application for issue of such certificate.
