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Section 197A - Self declaration for Non-deduction of TDS - Income Tax - Ready Reckoner - Income TaxExtract Self declaration in Form 15G / 15H for Non-deduction of TDS [ Section 197A ] Enabling provision for filling of declaration for recipient of dividend (Section 194) and National Saving Scheme Account (NSS) payment (Section 194EE) without deduction of Tax [ Section 197A(1) ] In case of an individual who is resident in India :- No tax will be deducted at source u/s 194 , 194EE , in case of an individual who is resident in India, if such furnishes to the payer a declaration in writing in duplicate in Form No. 15G to the effect that tax on his estimated total income will be nil. Enabling provision for filling of declaration for non-deduction of tax 192A, 193, 194A, 194D, 194DA, 194I or 194K, by person, other than company of firm [ Section 197A(1A) ] In case of a person not being a company or a firm ( Section 197A(1A) ):- No tax shall be deducted at source u/s 192A , 193 , 194A , 194D , 194DA , 194I or 194K , if such person furnishes to the payer a declaration in writing in duplicate in new Form No. 15G to the effect that the tax on the estimated income including such income will be nil. Filling declaration not permissible if Income / aggregate of income exceed basic exemption Limit [ Section 197A(1B) ] The provisions of section 197A shall not apply where the amount of any income or the aggregate of the amounts of such incomes of the nature referred to in section 197A(1) or (1A) credited or paid or likely to be credited or paid during the previous year such income is to be included exceeds the maximum amount which is not chargeable to income-tax. Enabling the provision for filling of declaration by resident senior citizens for non-deduction of tax at source [ Section 197A(1C) ] No deduction `of tax shall be made from the income of a resident individual who is of the age of 60 years or more at any time during the previous year. If such individual furnishes to the payer, a declaration in writing in Form No. 15H to the effect that the tax on his estimated total income of the previous year in which such income is to be included in computing his total income will be nil. The restriction contained in section 197A(1B ) will not apply to resident senior citizen. Declaration in Form 15H can also be made in case where income of the assessee, who is eligible for rebate of income-tax u/s 87A, is higher than the basic exemption limit after allowing for deduction under chapter VI-A , if any or set off of loss , if any under the head Income from House Property for which, the declaration is eligible but his tax liability would be Nil after taking into account the rebate available to him u/s 87A. [ Notification No. 41/2019 dated 22.05.2019 ] Non-deduction of tax in certain cases Interest payment by an Offshore Banking Unit to non-resident/ not ordinarily resident in India [ Section 197A(1D) ] ( a ) on deposit made on or after the 1st day of April, 2005, by a non-resident or a person not ordinarily resident in India; or ( b ) on borrowing , on or after the 1st day of April, 2005, from a non-resident or a person not ordinarily resident in India. The CBDT circular clarifies that in accordance with the provisions of section 197A(1D), tax is not required to be deducted on interest paid by the IFSC banking units on deposit made on or before 01.04.2005 by a non resident or a person who is not ordinarily resident in India, or on borrowing made on or after 01.04.2005 from such person. [ Circular No. 26/2016 dated 04.07.2016 ] Payment to any person on behalf of the NPS Trust [ Section 197A(1E) ] No deduction of tax at source shall be made from any payment to any person for or on behalf of , the New Pension system trust in section 10(44) . Payment to notified institution/ Class of institution etc. [ Section 197A(1F) ] No deduction of tax shall be made, or deduction of tax shall be made at such lower rate, from such payment to such person or class of persons, including institution, association or body or class of institutions, associations or bodies, as may be notified by the Central Government in the Official Gazette, in this behalf. No deduction of tax shall be made under the TDS provisions of the Income-tax Act as specified in the notification in respect of the payments specified in the notification, made by any payer to a person being a Unit of International Financial Services Centre, as specified in such notification. [ Notification No. 28/2024 dated 07.03.2024 ] No deduction of tax shall be made under section 194-I of the Income-tax Act on payment in the nature of lease rent or supplemental lease rent, as the case may be, made by a person, to a person being a Unit of an International Financial Services Centre for lease of a ship subject to specified terms and condition. [ Notification No. 57/2023 Dated:- 1-8-2023 ] No deduction of tax shall be made under section 194-I of the Income-tax Act on payment in the nature of lease rent or supplemental lease rent, as the case may be, made by a person to a person being a Unit located in International Financial Services Center for lease of an aircraft subject to specified terms conditions. [ Notification no. 65/2022 Dated:- 16-6-2022 ] No deduction of tax shall be made on the following payment u/s 194A of the said Act , namely payment in the nature of interest, other than interest on securities, made by a scheduled bank located in a specified area, to a member of Scheduled Tribe residing in any specified area, as referred to in clause (26) of section 10 of the said Act . [ Notification No. 110/2021 dated 17.09.2021 ] No deduction of tax shall be made from payments of the nature specified in section 193 or section 194A or section 194-I of the said Act to the Tirumala Tirupati Devasthanams, Tirupati, Andhra Pradesh. [ Notification No. 81 /2016 dated 09.09.2016 ] No deduction of tax under Chapter XVII of the income tax act shall be made on the payments of the nature specified in the notification, in case such payment is made by a person to a bank listed in the Second Schedule to the Reserve Bank of India Act, 1934, excluding a foreign bank, or any payment systems company authorised by the Reserve Bank of India u/s 4(2) of the Payment and Settlement Systems Act, 2007. [ Notification No. 47/2016 , 17th June, 2016 ] Time Limit for delivery of one copy of declaration [ Section 197A(2) ] On receipt of the declaration to in section 197A(1)/ (1A)/ (1C), the person responsible for making the payment will be required to deliver or cause to be delivered to Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, one copy of the declaration on or before the 7th of the month following the month in which the declaration is furnished to him. Retain of declaration Form 15G/15H [ Rule 29C(6) ] An income-tax authority may, before the end of seven years from the end of the financial year in which the declaration in Form No. 15G/15H has been received, require the person responsible to furnish or make available the declaration for the purposes of verification or any proceeding under the act. Furnishing the declaration in Form No. 15G/15H to the income-tax authority [ Rule 29C(3) ] The person responsible for paying any income of the nature section 197A(1)/ (1A)/ (1C) , shall allot a unique identification number to each declaration received by him in Form No.15G/15H respectively during every quarter of the financial year in accordance with the procedures, formats and standards specified. Manner of furnishing of Form No. 15G/15H [ Rule 29C(2) ] The declaration in Form no. 15G/15h may be furnished in any of the following manners, namely:- (a) in paper form; (b) electronically after duly verifying through an electronic process. Note: Any declaration under section 197A by the payee shall be valid only if it contains the PAN of the payee. Lower deduction in certain cases for a limited period in case of sections 193 , 194 , 194A , 194C , 194D , 194DA , 194EE , 194F , 194G , 194H , 194I , 194IA , 194IC , 194J , 194K , 194LA , 194LBA , 194LBB , 194LBC , 194M , 194O requires TDS to be deducted at 3/4th rate for period commencing from 14-5-2020 to 31-03-2021. Relaxation for Furnishing of UID in case of Form 15G / 15H for certain quarters. [ Circular No 18/2016 dated 23.05.2016 ] Whose income is unconditionally exempt under section 10 of the Income-tax Act and who are statutorily not required to file return of income as per section 139 of the Income-tax Act, there would be no requirement for tax deduction at source since their income is anyway exempt under the Income-tax Act. [ Circular No. 4/2002 dated 16-7-2002 ] An assessee being a resident individual, who is the original subscriber of a Deep Discount Bond, may furnish a declaration in Form No. 15H in accordance with section 197A, if he has been declaring income on the bond from year to year on accrual basis, and no tax is payable on his total income, including the interest. [ Circular No. 4/2004 , dated 13-5-2004 ] Declaration in Form 15G/15H to be furnished to the Deductor/Payer for each Financial Year [ Notification No. 6/2017 dated 30.05.2017 ] Whether a depositor should submit only one declaration in respect of the income each year before each person responsible for making the payment (Deductor) or Form 15G / 15H has to be submitted each and every time the payment is due to be received from the deductor.
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