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Case law › Income-tax Act 2025 › Chapter XIX › Section 400
Chapter XIXwas s.194, s.194A, s.194BA, s.194N, s.194Q, s.194R, s.194S, s.195, s.197, s.197A, s.206C

Section 400 of the Income-tax Act, 2025

Section 400 — Power of Central Government to relax provisions of this Chapter. Successor to s.194, s.194A, s.194BA, s.194N, s.194Q, s.194R, s.194S, s.195, s.197, s.197A, s.206C of the 1961 Act.

Where this section sits

Section 400 is in Chapter XIX — Collection and Recovery of Tax, which runs from section 390 to section 430.

← Section 399  ·  Section 401 →

What this section does

Sub-section (1) empowers the Central Government, by notification, to provide that deduction or collection of tax shall not be made, or is to be made at such lower rate, from such payment or receipt and in respect of such person or class of persons.

Sub-section (2), as substituted by Act No. 4 of 2026 with effect from 1 April 2026, empowers the Board, with the previous approval of the Central Government, to issue guidelines to remove any difficulty in giving effect to this Chapter, and provides that such guidelines shall be (a) binding on the income-tax authorities and on the person liable to deduct or collect income-tax, and (b) laid before each House of Parliament. The pre-substitution sub-section (2) provided only that such guidelines be laid before each House; it did not state that they were binding.

Sub-section (3) allows the Board to notify a class of persons or cases where a person responsible for paying any sum to a non-resident, not being a company, or to a foreign company — whether or not the sum is chargeable — is to apply to the Assessing Officer in the prescribed form and manner to determine the appropriate proportion chargeable, tax then being deducted under section 393(2) (Table: Sl. No. 17) on that proportion. Sub-section (4) allows the Board, by notification, to make rules specifying the cases and circumstances in which an application may be made for a certificate under section 395(1) and (3), the conditions for granting it, and all connected matters.

Why it is there

Deduction and collection at source apply mechanically regardless of whether the recipient will finally bear tax, and cross-border remittances often contain a chargeable element far smaller than the gross sum. The section supplies the relief valves — a notification switching deduction off or lowering the rate, an application route for fixing the chargeable proportion, and rule-making for certificates. The substituted sub-section (2) adds the step of making the Board's guidelines binding rather than merely laid before Parliament.

Who it applies to

What this means in practice

Sub-section (1) relaxes the obligation, not the charge: a notification can stop deduction or lower its rate, but the income remains taxable in the ordinary way. The change worth noticing is in sub-section (2), where Act No. 4 of 2026 made the Board's guidelines under this Chapter binding on the income-tax authorities and on the deductor or collector with effect from 1 April 2026. The proportion-determination route is not available on demand — it operates only for a class of persons or cases the Board has notified, and it works even where the sum is not chargeable, with deduction then confined to the chargeable proportion. The conditions for a certificate are not in section 395 itself but in rules notified under sub-section (4).

An example

Illustrative only, and invented for this page. The figures are chosen to show the rule biting, not taken from any real matter.

A person remitting a sum to a foreign company is unsure how much of it is chargeable in India. If the Board has notified his class of case under sub-section (3), he applies to the Assessing Officer in the prescribed form; the Assessing Officer determines the appropriate proportion, and tax is deducted under section 393(2) (Table: Sl. No. 17) on that proportion alone rather than on the gross remittance.

Where you meet this section

In a Central Government notification exempting a payment from deduction or setting a lower rate; in Board guidelines a deductor is now told are binding on him; and in an application to the Assessing Officer to determine the chargeable proportion of a remittance to a non-resident or foreign company.

The words themselves

binding on the income-tax authorities and on the person liable to deduct or, as the case may be, collect income-tax
Section 400(2)(a), Income-tax Act, 2025.

What people get wrong

What this replaced

The correspondence is the Income Tax Department’s own, from its comparison utility for the 1961 and 2025 Acts. A renumbering is the easy half; whether the words changed is the half that decides cases.

See the full 1961 to 2025 concordance.

Rules that serve this section

Rules of the Income-tax Rules, 2026 that work section 400. Where the rule’s own heading names the section we say so; the rest are marked on reading the rule, which is our derivation and not the department’s. A rule that serves the section silently and that we have missed will not appear here.

All of them are in the Rules 2026 index.

Circulars of the Board on this section

A circular binds the department, not you and not a court. Every one below was written under the 1961 Act; it reaches this section because the department’s own concordance carries the provision it names to this one.

See every circular and notification on this section, or the circulars index.

Notifications that reach this section

A notification is made under a power the Act gives and, within that power, is law. These too were made under the 1961 Act and are placed here by the department’s concordance.

See every circular and notification on this section, or the notifications index.

Case law carried across

Read this before you rely on it. Every decision below was decided under the Income-tax Act, 1961. It appears here because it is tagged to a 1961 provision that the department’s own mapping carries to section 400. That is an inference we have drawn, not a holding on the new section: where the words changed in the move, the reasoning may not survive. Treat this as the place to start looking, not as authority on the 2025 Act.

Explainers

Read with

What this page does not tell you. It does not reproduce the section. Everything above was written from the section’s own text as the Income Tax Department publishes it — the text is here, and nothing here is advice on your facts. Where a figure matters, read the sub-section it comes from.