Procedure format and standards for filling an application for grant of certificate under sub rule 4 and its proviso of rule 28AA of income tax rules 1962 for deduction of income tax at any lower rate or no deduction of income tax
Notification No. 02 /2023 was published on 27 September 2023. Its subject is Procedure format and standards for filling an application for grant of certificate under sub rule 4 and its proviso of rule 28AA of income tax rules 1962 for deduction of income tax at any lower rate or no deduction of income tax.
This amends the Income-tax Rules. What it changes is the Rules, not the Act — and a rule can never take away what the section gives.
Issued by the Director General of Income-tax (Systems) under sub-rule (2) of rule 28 and sub-rule (6) of rule 28AA of the Income-tax Rules, 1962, this notification lays down the procedure, format and standards for the electronic filing of Form No. 13 with Annexure-II and for the generation of a certificate under sub-section (1) of section 197 read with the proviso to sub-rule (4) of rule 28AA, through TRACES. The applicant logs in at the TRACES website, registering with his permanent account number if not already registered, and submits Form No. 13 with Annexure-II and supporting documents using a digital signature, an electronic verification code, Aadhaar-based authentication or a mobile one-time password; an applicant accessing the site from outside India uses the non-resident TRACES site and a digital signature only. The status of the application can be tracked under the option for tracking a Form 13 request, and the application is assigned to the TDS assessing officer on the basis of the details furnished in Form No. 13. The procedure is stated to apply from 1 October 2023.
The notification recites that the proviso to sub-rule (4) of rule 28AA provides for a certificate authorising the applicant himself to receive income or sums after deduction at a lower rate where the persons responsible for deducting tax are likely to exceed one hundred and their details are not available when the application is made, and that sub-rule (6) empowers the Director General of Income-tax (Systems) to lay down the procedure for issuing such certificates.
F. No. CPC(TDS)/ 197 Certificate/Annex-11/2023-24
Government of India
Ministry of Finance
Central Board of Direct Taxes
Directorate of Income-tax (Systems)
New Delhi
Notification No.02/2023 New Delhi, the 27th September, 2023
Subject: - Procedure, format and standards for filling an application for grant
of certificate under sub-rule (4) and its proviso of Rule 28AA of
Income Tax Rules, 1962, for deduction of Income-tax at any lower
rate or no deduction ofIncome-tax under sub-section (I) of section
197 of the Income-tax Act, 1961 through TRACES-reg.1. As per sub-section (I) of section 197 of the Income-tax Act, 1961(the
Act), where, in the case of any income of any person or sum payable to any
person, income-tax is required to be deducted at the time of credit or, as the
case may be, at the time of payment at the rates in force under the provisions
of sections 192,193,194, 194A, 194C, 1940, 194G, 194H, 194-1, 194J, 194K,
194LA, [194L8A]' 194L88, 194L8C, 194M, 194-0 and 195, if the Assessing
Officer is satisfied that the total income of the recipient justifies the deduction
of income-tax at any lower rates or no deduction of income-tax, as the case
may be, the Assessing Officer shall, on an application made by the assessee
in this behalf, give to him such certificate as may be appropriate.2. Rule 28 of the Income-tax Rules, 1962 provides for filing an application
for grant of certificate for deduction of Income-tax at any lower rate or no
deduction of Income-tax under sub-section (I) of section 197 of the Act to be
made in Form No. 13 electronically in accordance with the procedures,
formats and standards for ensuring secure capture and transmission of data
and uploading of documents to be laid down by the Principal Director General
of Income-tax (Systems).3. Proviso to sub-rule (4) of Rule 28AA of the Income Tax Rules, 1962,
provides for issuance of certificate for deduction of tax at lower rate, to the
person making such application authorizing him to receive income or sum
after deduction of tax at lower rate, in cases, where the number of persons
responsible for deducting the tax is likely to exceed one hundred and the
details of such persons are not available at the time of making application
with the person making such application, Sub-rule (6) of Rule 28AA of the
Income-tax Rules, 1962, empowers the Director General of Income-tax
(Systems) to lay down procedures, formats and standards for issuance of
certificates under proviso to sub-rule (4) of Rule 28AA of the Income Tax Rules,
1962,4. In exercise of the powers conferred under sub-rule (2) of Rule 28 & subrule (6) of 28AA of the Income-tax Rules, 1962, the Director General of Incometax (Systems) hereby specifies the procedure, format and standards for the
purpose of electronic filing of Form 13 with Annexure - II and generation of
certificate under sub-section (1) of section 197 r,w, proviso to sub-rule(4) of
Rule 28AA of Income Tax Rules, 1962 through TRACES as per procedure in
the succeeding paragraphs which will be applicable from 01.10,2023,5. Procedure for electronic filling of Form 13 with annexure-II shall be as
follows:5.1 For making an application in Form 13 with Annexure II the taxpayerjDeductee shall login into the TRACES website (www,tdscpc,gov.in), for
grant of certificate for deduction of Income-tax at any lower rate or no
deduction of Income-tax under sub-section (1) of Section 197 of the Incometax Act, 1961.5.2 The tax-payer jDeductee who is not registered at TRACES website shall
have to first register with his Permanent Account Number ("PAW) at TRACES
(www,tdscpc,gov.in) for login and filling application in Form 13 along-with
Annexure II, Detailed procedure for registration can be accessed through the
link https:llcontents, tdscpc,gov.inl en I taxpayer-registration-Ioginetutorial.html5.3 The tax-payerjDeductee shall login at TRACES website
(www,tdscpc.gov.in) and submit the Form No. 13 along-with Annexure II with
supporting documents using any of the following,
(i) Digital Signature,
(ii) Electronic Verification Code,
(iii) Aadhar based Au thentication,
(iv) Mobile OTP.5.4 Applicants accessing TRACES website from outside of India shall login
at TRACES website (www.nriservices.tdscpc.gov.in) and submit application in
Form No. 13 along with supporting documents using Digital Signature only.5.5 The applicant can track the status of the application through option
'Track Request for Form13/ lSC/ lSD' under the tab ·Statements/Forms'.6. Procedure for assignment of application to the TDS Assessing Officer
(AO):6.1 The application will be assigned to the TDS AO on the basis of details
furnished by the applicant in Form 13. Such applications can be accessed by
the AO through the path 'AO Loqin->LowerINo Deduction Certificate->
Generate Certificate->Certificate ul s 197f111206C (9)-> Open Request (5)'.6.2 For application filed in Delhi, Mumbai, Chennai, Kolkata, Bangalore,
Hyderabad, Ahmedabad and Pune, cases where revenue forgone exceeds a
sum of Rs. 50 Lakh, the applications shall be assigned to the DCIT / ACIT
exercising jurisdiction over TDS matters, and in other cases, the applications
shall be assigned to the ITO exercising jurisdiction over TDS matters. If the
jurisdiction orders are otherwise, the applications shall be assigned in
accordance to such jurisdiction orders.6.3 For application filed in remaining cities/townsfjurisdictions, the
application where revenue foregone exceeds a sum of Rs. 10 Lakh, application
shall be assigned to the DCIT / ACIT exercising jurisdiction over TDS matters,
and in other cases, the applications shall be assigned to the ITO exercising
jurisdiction over TDS matters. If the jurisdiction orders are otherwise, the
applications shall be assigned in accordance to su ch jurisdiction orders.6.4 Once the application in form 13 has been successfully submitted, the
following data will be obtained by CPC-TDS:
(i) Processed dat~ of Income Tax Returns of previous 4 financial years (if
available) .
(ii) PAN Demand.
(iii) E-filed Income-Tax Returns of previous 4 fmancial years.
(iv) Audit Report (along with form 3CD if accounts are audited) of previous
4 financial years.
(v) Assessment Orders of previous 4 financial years (if available).6.5 The applications shall be assigned to the TDS AO exercising jurisdiction
over TDS matters in respect of the applicant as explained in para 6.2 and 6.3.
However, if the jurisdiction orders are otherwise, the assigned AO can transfer
the applications to the AO concerned on AO Portal.7. Processing of the tax-payer /Deductee's request by the AO, Range Heads
and Commissioners of Income-tax:7.1 Role of AO:
The AO shall process the application through TRACES-AO Portal after login
using his/her credentials.7.1.1 By navigating through the
Certiticate>Generate Certiticate> Certificate
path 'LowerlNo Deduction
u s/197(1 V206C (9) and select
'Open Request (s)', the AO shall be able to access following information:
(i) Information furnished by the tax-payer /Deductee.
(ii) Documents submitted by the tax-payer /Deductee.
(iii) Information essential for processing the request in respect of the taxpayer/Deductee, as received from other modules.
(iv) Information essential for processing the request in respect of the taxpayer/Deductee, as available at CPC(TDS).
(v) Information about the history of previous TAN less certificate issued to
the applicant where the number of deductors who consumed the said
certificate did not reach up to 100 during the last financial year, if
available.7.1.2 If the AO requires any further information or documents or clarification
from the applicant for arriving at a decision, the same shall be obtained online
using the option "Seek Clarification" available within the functionality through
the path 'AO Loqin-> Lower/No Deduction Certificate-> Generate Certificate->
Certificate u/s 197(1V206C(91->Open Requests->Request Number->Seek
Clarification'.7.1.3 The query raised by the AO shall be forwarded to the applicant through
systems for furnishing a suitable response. The query will be available to the
applicant at TRACES Portal through the path 'Taxpayer Loqin-
>Statements/ Forms->Track Request for Form 13/15C/15D->Request Number-
>Status->Clarification required by AO'.7.1.4 The response submitted by the applicant shall be visible to the AO
within the functionality for taking a decision on the application through the
path 'AO Loqin-> Lower/No Deduction Certificate-> Generate Certificate->
Certificate u/s 197(1 V206C(91->Open Requests->Request Number-
>Communication History -> Comments'.7.1.5 Based on the parameters defined in rule 28AA/28AB of the Income-tax
Rules, 1962 an estimated rate of tax will be suggested by the system
functionality. However, the AO shall be free to arrive at independent rate based
on his/her method of calculation or by taking into consideration any other
information available with him/her. The AO shall allow the deduction at such
rate as evidenced in the "Permitted Tax Rate Table" by making any
adjustments in respect of the rate, if required. The AO may state the reason
for arriving at a modified rate, if so, is the case.7.1.6 The AO shall approve/reject the application based on the parameters
defined in rule 28AA/28AB of the Income-tax Rules, 1962 as well as any other
instructions/ guidelines in this regard.7.1.7 After approval/rejection of the application, as the case may be, it will
be forwarded to the supervisory authority, i.e., the Range Head or Range Head
& CIT for according administrative approval.7.2 Role of Range head:
7.2.1 The Range head shall process the application through TRACES-AO
Portal after login using their credentials for granting administrative approval
to the recommendation of the AO or otherwise.7.2.2 The Range Head can view the application details, received for
administrative approval at TRACES-AO Portal through the path 'Range Head
Login->Lower/No Deduction Certificate- > Generate Certificate -> Certificate u/s
197f11/206c(9)->Open ReguestfsJ'. The following information will be available
for viewing to the Range Head:
(i) Information furnished by the tax-payer /Deductee.
(ii) Documents submitted by the tax-payer/Deductee.
(iii) Information essential for processing the request in respect of the taxpayer /Deductee received from other modules.
(iv) Information essential for processing the request in respect of the taxpayer/Deductee, as available at CPC(TDS).
(v) Information about the history of previous TAN less certificate issued to
the applicant where the number of deductors who consumed the said
certificate did not reach up to 100 during the last financial year, if
available.
(vi) Recommendation of the TDS AO.7.2.3 If any clarification is required by the Range Head, the application may
be sent back to the AO through TRACES - AO Portal. After submission of
clarification by the AO through the AO Portal, the Range Head shall take a
decision on the application.7.2.4 After a decision on the application has been taken by the Range Head,
if the revenue foregone is within the powers conferred upon the Range Head
(as per CBDTs Instructions on the subject) to accord administrative approval,
the application will be marked back electronically on TRACES-AO Portal to
the AO for issuance of the certificate or rejection of the application. However,
if the revenue foregone is within the powers conferred upon the CIT (as per
CBDTs instructions on the subject) to accord administrative approval, the
application shall be forwarded to the CIT for a decision in the matter.7.3 Role of the CIT:
7.3.1 The CIT shall process the application through TRACES-AO Porta l after
login using their credentials for granting administrative approval to the
recommendation of the AO/Range Head or otherwise.7.3.2 The CIT can view the application details, received for administrative
approval at TRACES-AO Portal through the path 'CIT Loqin->LowerINo
Deduction Certificate- > Generate Certificate-> Certificate u/ s 197f1}I 206C
(9J->Open Request(s)'. The following information will be available for
viewing to the CIT:
(i) Information furnished by the tax-payer /Deductee.
(ii) Documents submitted by the tax-payer /Deductee.
(iii) Information essential for processing the request in respect of the taxpayer /Deductee received from other modules.
(iv) Information essential for processing the request in respect of the taxpayer/Deductee, as available at CPC(TDS).
(v) Information about the history of previous TAN less certificate issued to
the applicant where the number of deductors who consumed the said
certificate did not reach up to 100 during the last financial year, if
available.
(vi) Recommendation of the TDS AO.
(vii) Recommendation of the Range Head.7.3.3 If any clarification is required by the CIT, the application may be sent back
to the Range Head through TRACES-AO Portal.7.3.4 The Range Head may either send back the application to the AO for
obtaining the clarification or submit the case to CIT along with the
clarifications as required by the CIT through TRACES-AO Portal.7.3.5 Based on the information available and the report of the Range Head and
the AO, the CIT shall take a decision in the case.7.3.6 After a fmal decision in the application has been taken by the CIT, the
application will be marked back electronically on TRACES-AO Portal to the
AO for issuance of the certificate or rejection of the application.8. Issuance of Certificate:
8.1 On receipt of administrative approval of the competent authority, the
AO shall generate a certificate on TRACES-AO Portal through the path 'AO
login->Lower/No Deduction Certificate-> Certificate u/s 197fl1/206C (91-
>Receiued from Range Head/ CIT-> Request Number->Generate
Certificate/ Close Reguest'.8.2 The issued certificates shall be available to the AO for view through the
path 'Lower / No Deduction Certificate -> History -> Certificate issued'.8.3 The status of request/application shall be available to the Range Head
through the path 'Range Head login->Lower / No Deduction Certificate->
History-> Certificate Requests'.8.4 The generated certificates shall be available for download to the
applicant on the TRACES through the path 'Taxpayer login->Downloads->
Download 197, 206C(91 or 195(31 Certificate'. The certificate will be system
generated and hence will not require a signature.9. The onus of sharing the certificate to the respective deductor(s) will be on the
applicant.10. Consumption/ Tracking of Certificate:
10.1 The certificate reported by deductor(s) (who have received certificate
from the applicant) in the TDS statements, will be consumed on the basis of
processing of TDS statements as per FIFO (First in First Out) principle.10.2 The deductor(s) is/are advised to verify/track consumption status of
the certificate before furnishing certificate details in TDS statement(s) through
the path 'Deductor loqin->Statement I Payments-> Historu- > Validate Lower
Deduction Certificate uls 1971195(3)1195(2)' to avoid any defaults.10.3 The consumption status of the certificate can be viewed by the
applicant at his login at TRACES website.11. This issues with prior approval of the Director General of Income-tax
(Systems).(Sunil Sharma)
Add!. Commissioner of Income Tax (CPC-TDS)
0/0 The Director General of Income -tax (Systems)Copy for kind information to:
1. PPS to the Chairman and all Members, CBDT, North Block, New Delhi.
2. All Pro Chief Commissioners/ Pro Director Generals of income-taxi Chief
Commissioners of Income-tax / Pro Commissioners of Income-tax /
Commissioners of Income-tax / Commissioners of Income-tax(TDS) - with a
request to circulate amongst all officers in their regions/ charges.
3. JS (TPL)-I&II / Media coordinator and Official spokesperson of CBDT.
4. ADG (IT)/ADG(Audit)/ ADG (Vig.)/ ADG (Systems)-l,2,3,4,5 /ADG(TPS)-
1,2/ CIT(CPC-ITR) /Bangalore.
5. ADG (PR,PP &OL) with a request for advertisement campaign for the
notification.
6. TPL and ITA Divisions of CBDT
7. The Institute of Chartered Accountants of India, IP Estate, New Delhi.
8. The Web Manager, 'incometaxindia.gov.in' for hosting on the website.
9. Database cell for uploading on www.irsofficersonline.gov.in and in DGIT
System's comer.
10. ITBA publisher for uploading on ITBA Portal
11. ITO (CPC-TDS)-2/ 3 for uploading on TRACES Website/ AO Portal.Add!. Commissioner of Income-Tax (CPC-TDS)
0/0 The Director General of Income-tax (Systems)
Forms it touches. Form No. 13
1 October 2023.
On TRACES, in making an application in Form No. 13 with Annexure-II for a lower or nil deduction certificate, and in the certificate the TDS assessing officer generates on it.
Forms it names. Form No. 13
Rules it names. Rule 28, 28AA of the Income-tax Rules, 1962. The 1962 Rules were replaced by the Income-tax Rules, 2026, which renumbered nearly everything: a rule number quoted here almost never means the same rule today.
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Source: the Income Tax Department’s own published text — its page for this instrument.