Author.
In a recent Instruction No. 01/2014, dated 15-01-2014, Central Board of Direct Taxes has directed all the Assessing Officers to dispose of all applications filed by the Assessees for lower deduction of tax at source or no deduction of tax at source within a period of one month. This period of one has been prescribed under Citizen Charter of Income-tax department.
The above instructions have been issued in the light of the fact that normally Assessing Officers take too much time in disposing off these applications.
Background of the Matter:
Under the provisions of Income-tax Act, 1961, if a person receives Salary, Professional Fees, Rent, and some other fees, his/client, employer is required to deduct tax at source, that we commonly know as Tax Deduction At Source or TDS.
This TDS can be adjusted in final income tax liablity of the person whose tax has been so deducted.
In some case, the amount of TDS far increases the probable income tax liability of the person and he/she has to go for income tax refund in such a case.
There is a provision in Income Tax to facilitate such types of eventualities , that is under Section 197 of the Income Tax Act, 1961
Under Section 197 of the Income-tax Act, 1961 an assessee may apply to the Assessing Officer to issue a Certificate of Lower Deduction of Tax at Source or a Certificate of No Deduction of Tax at Source. If the Assessing officer is satisfied that Total Income of the applicant is such , that justifies the lower or no deduction of tax, then he may issue such certificate.