TCS mechanism under Section 206C of Income-tax Act, 1961

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Income Tax Department
Ministry of Finance, Government of India

Tax Collection at Source (TCS)

Tax Collected at Source (TCS) is a tax mechanism under Section 206C of the Income-tax Act, 1961, requiring sellers to collect tax on specified transactions from buyers/licensees/lessees. The collected tax is deposited with the Central Government.

Applicability of TCS

Sale of Specified Goods [Section 206C(1)]

Alcoholic liquor for human consumption.
Tendu leaves, timber, and other forest produce.
Scrap and minerals such as coal, lignite, and iron ore.

Leasing or Licensing Transactions [Section 206C(1C)]

Licensing/leasing of parking lots, toll plazas, mines, or quarries.

Sale of luxury goods [Section 206C(1F)]

Sale of specified luxury goods of value exceeding Rs. 10 lakhs.
Specified luxury good is motor vehicle, wrist watch, art piece, collectables (such as coin, stamp), yacht, rowing boat, canoe, helicopter, sunglasses, handbag, purse, shoes, sportswear and equipment, home theatre system, horse for horse racing in race clubs, horse for polo.

Overseas Transactions [Section 206C(1G)]

Remittances exceeding Rs. 10 lakhs under the Liberalized Remittance Scheme (LRS).
Purchase of overseas tour program packages.

General Sale of Goods [Section 206C(1H)]

Sale of goods exceeding Rs. 50 lakhs in a financial year to a buyer by a seller whose preceding year’s turnover exceeds Rs. 10 crores. (This provision is withdrawn with effect from 01-04-2025)

TCS Rates

The rates of TCS vary based on the transaction type and buyer’s compliance:

Rates for Specified Transactions
Nature of Transaction	Standard Rate	Rate if PAN/Aadhaar not furnished
Sale of alcoholic liquor	1%	5%
Tendu leaves	5%	10%
Timber	2%	5%
Other forest produce, if obtained under a forest lease	2%	5%
Scrap	1%	5%
Minerals (coal, lignite, iron ore)	1%	5%
Parking lot/toll plaza/mine/quarry leasing	2%	5%
Specified luxury goods of value exceeding Rs. 10 lakhs	1%	5%
Remittances under LRS for education purposes or medical treatment	5%	10%
Remittances under LRS for other purposes	20%	20%
Overseas tour program package	5% on remittance up to Rs. 10 lakh and 20% on the excess amount	10% on remittance up to Rs. 10 lakh and 20% on the excess amount
Sale of goods exceeding Rs. 50 lakhs	0.1%	1%

TCS on Sale of Alcoholic Liquor, Scrap, Forest Produce etc. [Section 206C(1)]

Who collects TCS?

Seller being:

Central/State Govt
Local authority
Corporation/statutory body
Company/firm/co-op society
Individual/HUF (if turnover > Rs. 1 crore business / Rs. 50 lakh profession in prior FY)

From whom is TCS collected?

From the buyer, unless the buyer is:

PSU
Government
Embassy/consulate/foreign trade rep
Club
Person buying for personal use (retail)

Other points

Amount – TCS on full sales consideration.
Time – At the earlier of receipt or account debit.
Declaration (Form 27C) – No TCS if the buyer furnishes a declaration in Form 27Cto the seller that the goods are for manufacturing/power generation (not trading). The seller submits a copy of Form 27C to the tax authorities by the 7th of the next month.

TCS on Leasing of Parking Lot, Toll Plaza, Mine or Quarry [Section 206C(1C)]

Who collects TCS?

Any person who grants lease, license, contract, or transfers right in parking lot, toll plaza, mine, or quarry.

From whom is TCS collected?

From the licensee/lessee using it for business purposes.

No TCS if lessee/licensee is a Public Sector Company.

On what amount TCS is collected?

TCS is collected on the entire amount received from the licensee/lessee.

When to collect TCS?

At the earlier of:

Debiting the buyer’s account
Receipt of payment

TCS on Sale of Motor Vehicle or Specified Luxury Goods (Section 206C(1F))

Who collects TCS?

Seller being:

Central/State Govt
Local authority
Corporation/statutory body
Company/firm/co-op society
Individual/HUF (if turnover > Rs. 1 crore business / Rs. 50 lakh profession in prior FY)

From whom is TCS collected?

From Buyer paying > Rs.10 lakh for specified luxury goods, unless the buyer is:

Central/State Government
Embassy/Consulate
Local authority
PSU engaged in passenger transport
Dealer/distributor of motor vehicles
RBI

On what amount TCS is collected?

TCS is collected on the entire sales consideration if the value of each specified luxury good exceeds Rs. 10 lakh. The Rs. 10 lakh limit applies per item, not on aggregate yearly sales.

When to collect TCS?

TCS is collected at the time of receipt of payment, whether at the time of advance or at delivery.

TCS on Remittance under Liberalized Remittance Scheme (LRS) [Section 206C(1G)(a)]

Who Collects TCS?

TCS is collected by an authorised dealer (person authorised by RBI to deal in foreign exchange). The responsibility for collecting tax on remittances made under LRS lies with the authorized dealer, but the applicability of TCS is based on the remitter, not the authorized dealer.

From whom TCS is Collected?

TCS is collected from the remitter under LRS unless

Amount of remittance < Rs. 10 lakh in the year
Remittance is for overseas tour, and the seller has already collected TCS u/s 206C(1G)(b)
Remitter is a non-resident without PE in India
Remittance is for education from a loan under Section 80E
Remitter is Central/State Govt, Embassy, Consulate, Local Authority, or other notified person
Payment made via international credit card while overseas

Amount on which TCS Applies

TCS applies on aggregate remittances exceeding Rs. 10 lakh in a financial year. The threshold applies across all purposes on a first-come-first-serve basis.

When to Collect TCS?

TCS is collected at the time of debiting the account or on receipt of payment, whichever is earlier.

TCS from Sale of Overseas Tour Package [Section 206C(1G)(b)]

Meaning of Overseas Tour Programme Package

Any tour package that offers a visit to a country or territory outside India.

Includes:

- Expenses for travel,
- Hotel stay,
- Boarding/lodging,
- Other related or similar expenditures.
CBDT clarification [Circular No. 10, dated 30-06-2023]:

Purchase of only an international ticket or only hotel stay is not covered. A package qualifies if it includes at least two of:

International travel ticket,
Hotel accommodation (with or without food)/boarding/lodging,
Any other similar or related expenditure.

Who shall collect TCS

Seller of the overseas tour programme package.

From whom TCS shall be collected

Buyer purchasing the overseas tour programme package unless the buyer is:

Central Government
State Government
Local Authority
Embassy/High Commission/Consulate/Trade Representation of Foreign Government
Non-resident without permanent establishment in India
Any other notified person

Amount on which tax shall be collected

TCS is collected on the total amount received by the seller for the overseas tour package.
TCS applies on entire amount (even if purchase is via LRS).

Time of collection

At the time of debiting the amount or receipt of such sum, whichever is earlier.

Deposit of Tax Collected at Source (TCS)

Due Dates for Depositing TCS

Government Collectors
- Without Challan: TCS must be deposited on the same day it is collected. A statement in Form 24G must be submitted to the income tax department.
- With Challan (ITNS 281): Deposit by the 7th of the next month in which tax is collected.
Other Collectors

TCS collected during a month must be deposited by the 7th of the following month.

How to Deposit TCS

Electronic Payment: Corporate and tax-audited assessees must pay TCS electronically using internet banking or debit cards. Payment is made through Challan No. ITNS 281.
Manual Payment: Other collectors can deposit TCS at authorized branches of the Reserve Bank of India, State Bank of India, or other approved banks.
Third-Party Payment: TCS payment can be made from a third party’s account, provided the PAN of the concerned assessee is mentioned on the challan.

Furnishing of TCS Statement

Persons responsible for collecting tax at source (TCS) must file quarterly statements in Form 27EQ by specified due dates. Government collectors depositing TCS without a challan must file Form 24G.

Forms for Filing TCS Returns

Form 27EQ: Quarterly TCS statement for all collectors.
Form 24G: For Government collectors depositing TCS without challans. A “Book Identification Number” (BIN) is generated upon submission.

Due Dates for Filing TCS Statements

Form 27EQ:
- Q1 (April–June): July 15
- Q2 (July–September): October 15
- Q3 (October–December): January 15
- Q4 (January–March): May 15 (next financial year)
Form 24G:
- March: April 30
- Other months: Within 15 days of the relevant month’s end.

Modes of Filing TCS Statements

Statements can be filed:

Electronically under digital signature.
Electronically with verification in Form 27A.
Paper filing is restricted for government offices, companies, entities requiring tax audit under Section 44AB, and where collectees exceed 20.

Details Required for TCS Statements

The following information is needed:

Collector’s TAN and PAN (if applicable).
PAN/Aadhaar of collectees.
Challan/BIN details for tax deposited.
Details of amounts exempt from TCS under various provisions (e.g., imports, specified notified buyers).

Processing of Statements

Statements are processed to identify errors, calculate interest, and late fees. Adjustments for errors (arithmetical or apparent) are made. Intimations for dues must be cleared within 30 days.

Interest for Late Payment: Charged at prescribed rates.
Late Filing Fees: Rs. 200 per day under Section 234E, up to the total tax collectible.

Correction of TCS Statements

Until March 31, 2025: No time limit for corrections.
From April 1, 2025: Corrections limited to six years from the financial year of the original statement’s due date.

Penalties and Appeals

Penalty for Default: Rs. 10,000 to Rs. 1,00,000 under Section 271Hfor late filing or inaccurate information.
Appeals: Assessees can appeal before CIT(A) or apply for revision if aggrieved by adjustments made at the time of processing of TCS return.

Credit of TCS

Credit for tax collected at source (TCS) is allowed to the person from whom it is collected, provided the collector deposits the tax with the Central Government and files the TCS Statement.

Who Can Claim Credit?

Collectee: Credit is allowed to the person from whom TCS is collected and deposited.
Other Persons(from 01-01-2025): Credit can be transferred to another person if:
- The income of the collectee is assessable in the other person’s hands under the Income-tax Act.
- The collectee files a declaration with the collector specifying details of such other person and reason for giving credit.
- The collector reports this in the TCS statement and issues a TCS certificate in the other person’s name.

When Is Tax Credit Allowed?

Credit is given in the assessment year when the corresponding income is assessable.
For certain cases (e.g., TCS on motor vehicles, overseas remittances, tour packages, and sale of goods), credit is allowed in the year of collection.

Conditions for Allowing Credit

Credit is allowed if:

The collector deposits the TCS with the Central Government.
The collector files the TCS Statement, reporting the tax collected.

Verification of Credit

Credits are reflected in Form 26AS.
If not displayed in Form 26AS, it indicates non-deposit or non-reporting by the collector.
Collectees are advised to obtain a TCS certificate for verification.

TCS Certificate

A person required to collect tax at source (TCS) must issue a TCS certificate to the collectee, detailing the amount, rate, and other prescribed particulars. These certificates are generated and downloaded from the TRACES website after processing of TCS statement.

Form and Due Dates:

Form: The TCS certificate is issued in Form 27D, downloadable from TRACES. The collector must authenticate it with a digital or manual signature. It includes key details like:
- PAN of the collectee.
- TAN of the collector.
- Challan or Book Identification Number.
- Receipt number of the TCS statement filed in Form 27EQ.
Duplicate Certificate: A duplicate can be issued upon request, marked as “Duplicate.”

Due Dates:

The TCS certificate must be issued within 15 days from the due date of filing Form 27EQ.
Quarterly due dates:
- Q1: July 30
- Q2: October 30
- Q3: January 30
- Q4: May 30 of the next financial year.

Consequences of Failure to Collect or Pay Tax Collected at Source (TCS)

A person responsible for collecting tax at source (TCS) and failing to collect or deposit the tax to the credit of the Central Government is deemed an assessee-in-default under the Income-tax Act.

Assessee-in-Default

When collector is deemed to be in default: A collector is deemed an assessee-in-default if TCS is not collected or deposited.
When collector is not deemed to be in default: The collector is not deemed in default if:
- The collectee has paid tax on such income and filed the return of income under Section 139.
- A certificate from a Chartered Accountant in Form 27BA is submitted electronically.

However, this relief does not apply if the collector fails to collect TCS in the following cases:

– Sale of motor vehicle / notified luxury goods exceeding threshold (Section 206C(1F))

– Remittance outside India under LRS exceeding threshold (Section 206C(1G))

– Sale of overseas tour package (Section 206C(1G))

– Sale of goods exceeding threshold in other cases (Section 206C(1H))

Time Limit for Default Orders: An order of default cannot be passed after:
- Six years from the end of the financial year in which TCS was collectible; or
- Two years from the end of the financial year in which a correction statement was furnished, whichever is later.

Interest for Default

Failure to Collect TCS:
- Interest is charged at 1% per month or part thereof, from the date TCS was required to be collected to the actual date of collection.
Failure to Deposit TCS:
- Interest is charged at 1.5% per month or part thereof, from the date of collection to the actual date of deposit.
Assessment Officer’s Order: Interest must be paid as per the Assessing Officer’s computation unless rectified or appealed.

Penalty and Prosecution

Penalty:
- Failure to collect TCS attracts a penalty under Section 271CA.
- Failure to deposit TCS attracts penalties under Section 221, except where the Assessing Officer is satisfied with the reasons for default.
Prosecution:
- Under Section 276BB, failure to deposit TCS may lead to prosecution.
- Repeat offenses under Section 278A attract harsher penalties unless reasonable cause is proven (Section 278AA).

Charge on Assets

If the collector fails to deposit TCS, the unpaid tax and interest create a charge on all assets of the defaulter.

Appeal Against Default Order

An appeal against an order treating the collector as an assessee-in-default can be filed before the Commissioner of Income-tax (Appeals) [CIT(A)].

Certificate for Collection of TCS at A Lower Rate

Collectee (Buyers, licensees, or lessees) can apply for a certificate to collect Tax Collected at Source (TCS) at a lower rate. The Assessing Officer issues this certificate if the applicant’s tax liability justifies the lower rate.

Eligible Applicants

The application can be made by any buyer, licensee, or lessee for TCS under the following provisions:

Sale of alcoholic liquor, scrap, etc. [Section 206C(1)]
Lease/licensing of parking lots, toll plazas, mines, or quarries [Section 206C(1C)]
Sale of goods exceeding Rs. 50 lakh [Section 206C(1H)]

Ineligible Applicants

Applications cannot be made for TCS reduction under:

Sale of motor vehicles or notified goods [Section 206C(1F)]
Liberalized Remittance Scheme [Section 206C(1G)]
Sale of overseas tour packages [Section 206C(1G)]

Application Process

Submit Form 13online using a Digital Signature or Electronic Verification Code.
PAN is mandatory; alternatively, Aadhaar can be used if linked to PAN or in cases where PAN is unavailable.

Assessment of Eligibility

The Assessing Officer evaluates the following before issuing the certificate:

Tax on estimated income for the current year.
Tax on assessed or returned income for the last four years.
Existing tax liability.
Advance tax, TDS, and TCS for the current year.

Issuance and Validity of Certificate

The certificate is issued to the tax collector, based on the applicant’s request.
It is valid for the specified period unless cancelled earlier.
After expiration, a fresh application can be made.

Prior Approvals

Approval from the Additional/Joint CIT is needed before issuing the certificate.
If the cumulative tax foregone exceeds Rs. 50 lakh in major cities (Delhi, Mumbai, Chennai, Kolkata, Bangalore, Hyderabad, Ahmedabad and Pune) or Rs. 10 lakh in other locations, approval from the CIT (TDS) is required.
For international buyers, approvals must be obtained from the relevant international taxation authorities.

Requirement to Furnish PAN (For TCS)

Every person responsible for payments subject to Tax Collected at Source (TCS) must furnish their Permanent Account Number (PAN) to the collector. Failure to provide PAN results in TCS being collected at a higher rate.

Requirement for TCS

As per Section 206CC, if the collectee fails to provide PAN, tax will be collected at the higher of:
- Twice the rate specified under Section 206C.
- 5%.
- Cap on TCS Rates: From July 1, 2023, the maximum TCS rate is 20%, including under Section 206C(1G).
Under Section 206C(1H):
- Tax is collected at the higher of:
  - Twice the specified rate under Section 206C(1H).
  - 1%.

It must be noted that Section 206C(1H) is withdrawn with effect from 01-04-2025.

Other Requirements

a) Lower or Nil TCS Certificate:

- PAN is mandatory to apply for a lower/nil TCS certificate in Form 13.
- Aadhaar may be used in place of PAN if linked.

b) Declaration for Nil TCS (Form 27C):

- Resident buyers can declare goods purchased are for manufacturing or production to avoid TCS.
- Declaration requires PAN or Aadhaar.

c) Invalid PAN:

- If PAN is invalid or does not belong to the collectee, it is treated as not furnished, and TCS is collected at a higher rate.

Consequences of Inoperative PAN

PAN must be linked with Aadhaar by March 31, 2022, to remain operative.
From July 1, 2023, if PAN is inoperative:
- Higher TCS rates apply.
- Lower TCS certificates cannot be obtained.
- Refunds and interest on refunds are disallowed.

Income Tax Rules

Rule – 31AA

Statement of collection of tax under proviso to sub-section (3) of section 206C.

31AA. (1) Every collector, shall, in accordance with the provisions of the proviso to sub-section (3) of section 206C, deliver, or cause to be delivered, to the Director General of Income-tax (Systems) or the person authorised by the Director General of Income-tax (Systems), a quarterly statement in Form No. 27EQ.

(2) Statements referred to in sub-rule (1) for the quarter of the financial year ending with the date specified in column (2) of the Table below shall be furnished by the due date specified in the corresponding entry in column (3) of the said Table:—

TABLE

Sl. No.	Quarter of the financial year ended	Due date
(1)	(2)	(3)
1.	30th June	15th July of the financial year
2.	30th September	15th October of the financial year
3.	31st December	15th January of the financial year
4.	31st March	15th May of the financial year immediately following the financial year in which collection is made

(3) (i) The statement referred to in sub-rule (1) may be furnished in any of the following manners, namely:—

(a) furnishing the statement in paper form;

(b) furnishing the statement electronically under digital signature in accordance with the procedures, formats and standards specified under sub-rule (5);

(c) furnishing the statement electronically along with the verification of the statement in Form 27A or verified through an electronic process in accordance with the procedures, formats and standards specified under sub-rule (5).

(ii) Where,—

a. the collector is an office of the Government; or

b. the collector is the principal officer of a company; or

c. the collector is a person who is required to get his accounts audited under section 44AB in the immediately preceding financial year;

d. the number of collectee’s records in a statement for any quarter of the financial year are twenty or more, the collector shall furnish the statement in the manner specified in [item (b) or item (c) of clause (i)].

(iii) Where the collector is a person other than the person referred to in clause (ii), the statement referred to in sub-rule (1) may, at his option, be delivered or cause to be delivered in the manner specified in [item (b) or item (c) of clause (i)].

(4) The collector at the time of preparing statements of tax collected shall,—

(i) quote his tax deduction and collection account number (TAN) in the statement;

(ii) quote his permanent account number (PAN) in the statement except in the case where the collector is an office of the Government;

(iii) quote the permanent account number of all collectees;

(iv) furnish particulars of the tax paid to the Central Government including book identification number or challan identification number, as the case may be;

(v) furnish particulars of amount received or debited on which tax was not collected in view of the furnishing of declaration under sub-section (1A) of section 206C by the buyer;]

³⁹ [(vi) furnish particulars of amount received or debited on which tax was not collected,—

a. by the authorised dealer from the buyer under the first proviso to sub-section (IG) of section 206C;

b. by the authorised dealer under ^39a[fifth proviso] to sub-section (1G) of section 206C; and

c. by the authorised dealer or seller of an overseas tour program from the buyer under clause I D or clause (ii) of the ^39b[sixth proviso] of sub- section (IG) of section 206C or in view of any notification issued under clause (ti) of the [sixth proviso] of sub-section (IG) of section 206C;

(vii) furnish particulars of amount received or debited on which tax was not collected from the buyer,—

a. under second proviso to sub-section (1H) of section 206C; and

b. under sub-clause (A) or sub-clause (B) or sub-clause (C), or in view of any notification issued under sub-clause (C), of clause (a) of the Explanation to sub-section (1H) of section 206C ^39c[j]

^39d [(viii) furnish particulars of amount received or debited on which tax was not collected or tax was collected at a lower rate in view of any notification issued under sub-section (12) of section 206C.]

(5) The Director General of Income-tax (Systems) shall specify the procedures, formats and standards for the purposes of furnishing and verification of the statements and shall be responsible for the day-to-day administration in relation to furnishing and verification of the statements in the manner so specified.

(6) Where a statement of tax collected at source is to be furnished for tax collected before the 1st day of April, 2010, the provisions of this rule shall apply as they stood immediately before their substitution by the Income-tax (Sixth Amendment) Rules, 2010.]

Notes:

³⁹Clauses (vi) and (vii) inserted by the IT (Seventeenth Amdt.) Rules, 2020, w.e.f. 1-10-2020.

^39a Substituted for “fourth proviso” by the IT (Ninth Amdt.) Rules, 2024, w.e.f. 16-10-2024.

^39bSubstituted for “fifth proviso” by the IT (Ninth Amdt.) Rules, 2024, w.e.f. 16-10-2024.

^39cSubstituted for “.” by the IT (Ninth Amdt.) Rules, 2024, w.e.f. 16-10-2024.

^39dInserted by the IT (Ninth Amdt.) Rules, 2024, w.e.f. 16-10-2024.

Rule – 37C

PART VIA

COLLECTION OF TAX AT SOURCE

Declaration by a buyer for no collection of tax at source under section 206C(1A).

37C. (1) A declaration under sub-section (1A) of section 206C to the effect that any of the goods referred to in the Table in sub-section (1) of that section are to be utilised for the purposes of manufacturing, processing or producing articles or things and not for trading purposes shall be in Form No. 27C and shall be verified in the manner indicated therein.

(2) The declaration referred to in sub-rule (1) shall be furnished in duplicate to the person responsible for collecting tax.

(3) The person referred to in sub-rule (2) shall deliver or cause to be delivered to the Chief Commissioner or Commissioner, one copy of the declaration referred to in sub-rule (1) on or before the seventh day of the month next following the month in which the declaration is furnished to him.

Explanation.—For the purposes of sub-rule (3), the Chief Commissioner or Commissioner means the Chief Commissioner or Commissioner to whom the Assessing Officer, having jurisdiction to assess the person referred to in sub-rule (2), is subordinate.

Rule – 37CA

Time and mode of payment to Government account of tax collected at source under section 206C.

37CA. (1) All sums collected in accordance with the provisions of ⁵²[***] section 206C by an office of the Government shall be paid to the credit of the Central Government—

(a) on the same day where the tax is so paid without production of an income-tax challan; and

(b) on or before seven days from the end of the month in which the collection is made, where tax is paid accompanied by an income-tax challan.

(2) All sums collected in accordance with the provisions of ⁵²[***] section 206C by collectors other than an office of the Government shall be paid to the credit of the Central Government within one week from the last day of the month in which the collection is made.

(3) In the case of an office of the Government, where tax has been paid to the credit of the Central Government without the production of a challan, the Pay and Accounts Officer or the Treasury Officer or the Cheque Drawing and Disbursing Officer or any other person by whatever name called to whom the collector reports the tax so collected and who is responsible for crediting such sum to the credit of the Central Government, ⁵³[shall submit a statement in Form No. 24G to the agency authorised by the Principal Director of Income-tax (Systems) in respect of tax collected by the collectors and reported to him.]

⁵⁴[(3A) Statement referred to in sub-rule (3) shall be furnished—

(a) on or before the 30th day of April where the statement relates to the month of March; and

(b) in any other case, on or before 15 days from the end of relevant month.

(3B) Statement referred to in sub-rule (3) shall be furnished in the following manner, namely:—

(a) electronically under digital signature in accordance with the procedures, formats and standards specified under sub-rule (4); or

(b) electronically along with the verification of the statement in Form No. 27A or verified through an electronic process in accordance with the procedures, formats and standards specified under sub-rule (4).]

⁵⁵[(4) The Principal Director General of Income-tax (Systems) shall specify the procedures, formats and standards for the purposes of furnishing and verification of the statements and shall be responsible for the day-to-day administration in relation to furnishing of the information and verification of the statements.]

(5) (i) Where tax has been deposited accompanied by an income-tax challan, the tax collected under ⁵⁶[***] section 206C shall be deposited to the credit of the Central Government by remitting it within the time specified in clause (b) of sub-rule (1) or in sub-rule (2) into any branch of the Reserve Bank of India or of the State Bank of India or of any authorised bank.

(ii) Where tax is to be deposited in accordance with clause (i), by persons referred to in sub-rule (1) of rule 125, the amount collected shall be electronically remitted into the Reserve Bank of India or the State Bank of India or any authorised bank accompanied by an electronic income-tax challan.

(6) For the purpose of this rule, the amount shall be construed as electronically remitted to the Reserve Bank of India or to the State Bank of India or to any authorised bank, if the amount is remitted by way of—

(a) internet banking facility of the Reserve Bank of India or of the State Bank of India or of any authorised bank; or

(b) debit card.

(7) Where tax is collected before the 1st day of April, 2010, the provisions of this rule shall apply as they stood immediately before their substitution by the Income-tax (Sixth Amendment) Rules, 2010.

Notes:

⁵²Words “sub-section (1) or sub-section (1C) of” omitted by the IT (Seventeenth Amdt.) Rules, 2020, w.e.f. 1-10-2020.

⁵³Substituted by the IT (Eleventh Amdt.) Rules, 2016, w.e.f. 1-6-2016.

⁵⁴Inserted by the IT (Eleventh Amdt.) Rules, 2016, w.e.f. 1-6-2016.

⁵⁵Substituted by the IT (Eleventh Amdt.) Rules, 2016, w.e.f. 1-6-2016.

⁵⁶Words “sub-section (1) or sub-section (1C) of” omitted by the IT (Seventeenth Amdt.) Rules, 2020, w.e.f. 1-10-2020.

Rule – 37D

Certificate of tax collected at source under section 206C(5).

37D. (1) The certificate of collection of tax at source under sub-section (5) of section 206C to be furnished by the collector shall be in Form 27D.

(2) The certificate referred to in sub-rule (1) shall specify:—

(a) valid permanent account number (PAN) of the collectee;

(b) valid tax deduction and collection account number (TAN) of the collector;

(c) (i) book identification number or numbers where deposit of tax collected is without production of challan in case of an office of the Government;

(ii) challan identification number or numbers in case of payment through bank;

(d) receipt number of the relevant quarterly statement of tax collected at source which is furnished in accordance with the provisions of rule 31AA.

(3) The certificate in Form No. 27D referred to in sub-rule (1) shall be furnished to the collectee within fifteen days from the due date for furnishing the statement of tax collected at source specified under sub-rule (2) of rule 31AA.

(4) The collector may issue a duplicate certificate in Form No. 27D if the collectee has lost the original certificate so issued and makes a request for issuance of a duplicate certificate and such duplicate certificate is certified as duplicate by the collector.

(5) Where a certificate is to be furnished for tax collected before the 1st day of April, 2010, it shall be furnished in the Form in accordance with the provisions of the rules as they stood immediately before their substitution by the Income-tax (Sixth Amendment) Rules, 2010.

Rule – 37G

⁵⁸[Application for certificate for collection of tax at lower rates under sub-section (9) of section 206C.

37G. (1) An application by the buyer or licensee or lessee for a certificate under sub-section (9) of section 206C shall be made in Form No. 13 electronically,—

(i) under digital signature; or

(ii) through electronic verification code.

(2) The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be, shall lay down procedures, formats and standards for ensuring secure capture and transmission of data and uploading of documents and the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) shall also be responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to the furnishing of Form No.13.]

Note:

⁵⁸ Substituted by the IT (Eleventh Amdt.) Rules, 2018, w.e.f. 25-10-2018

Rule – 37H

Certificate for collection of tax at lower rates from buyer or licensee or lessee under sub-section (9) of section 206C.

37H. ⁵⁹[(1) Where the Assessing Officer, on an application made by a person under sub-rule (1) of rule 37G is satisfied that existing and estimated tax liability of a person justifies the collection of tax at lower rate, the Assessing Officer shall issue a certificate in accordance with the provisions of sub-section (9) of section 206C for collection of tax at such lower rate.

(1A) The existing and estimated tax liability referred to in sub-rule (1) shall be determined by the Assessing Officer after taking into consideration the following, namely: —

(i) tax payable on estimated income of the previous year relevant to the assessment year;

(ii) tax payable on the assessed or returned or estimated income, as the case may be, of the last four previous years;

(iii) existing liability under the Act and the Wealth-tax Act, 1957 (27 of 1957);

(iv) advance tax payment, tax deducted at source and tax collected at source for the relevant assessment year relevant to the previous year till the date of making application under sub-rule (1) of rule 37G.]

(2) The certificate given under sub-rule (1) shall be valid for the assessment year specified in that certificate, unless it is cancelled by the Assessing Officer at any time before the expiry of the specified period.

(3) An application for a fresh certificate may be made, if required, after the expiry of the period of validity of the earlier certificate given under sub-rule (1).

(4) The certificate shall be valid only for the person named therein.

(5) The certificate shall be issued direct to the person responsible for collecting the tax under advice to the buyer who made an application for issue of such certificate.

⁶⁰[(6) The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be, shall lay down procedures, formats and standards for issuance of certificate under sub-rule (5) and the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) shall also be responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to the issuance of said certificate.]

Notes:

⁵⁹Sub-rules (1) and (1A) substituted for sub-rule (1) by the IT (Eleventh Amdt.) Rules, 2018, w.e.f. 25-10-2018.

⁶⁰Inserted by the IT (Eleventh Amdt.) Rules, 2018, w.e.f. 25-10-2018.

Rule – 37-I

[Credit for tax collected at source for the purposes of sub-section (4) of section 206C.

37-I. (1) Credit for tax collected at source and paid to the Central Government in accordance with provisions of section 206C of the Act, shall be given to the person from whom the tax has been collected, ^60a[(hereinafter referred to as the collectee)] on the basis of the information relating to collection of tax furnished by the person responsible for collection of tax at source (hereinafter referred to as the collector) to the income-tax authority or the person authorised by such authority.

^60a[(1A) (a) Where under any provisions of the Act, the income of the collectee is assessable in the hands of any person other than the collectee, the credit for the tax collected at source, shall be given to such other person and not to the collectee:

Provided that the collectee shall file a declaration with the collector and the collector shall report the tax collection in the name of the other person in the information relating to collection of tax referred to in sub-rule (1).

(b) The declaration filed by the collectee under the proviso to clause (a) shall contain the name, address, permanent account number of the person to whom credit for the tax collectible at source is to be given, amount of payment in relation to which credit is to be given and reasons for giving credit to such person.

(c) The collector shall issue the certificate for collection of tax at source under sub-section (3) of section 206C of the Act, in the name of the person in whose name credit is shown in the information relating to collection of tax referred to in sub-rule (1) and shall keep the declaration in his safe custody.]

(2) (i) Where tax has been collected at source and paid to the Central Government, credit for such tax shall be given for the assessment year for which the income is assessable to tax.

(ii) Where tax has been collected at source and paid to the Central Government and the lease or license is relatable to more than one year, credit for tax collected at source shall be allowed across those years to which the lease or license relates in the same proportion.

⁶¹[(2A) Notwithstanding anything contained in sub-rule (2), for the purposes of sub- section (1F) or, sub-section (1G) or, sub-section (1H) of section 206C, credit for tax collected at source shall be given to the person from whose account tax is collected and paid to the Central Government account for the assessment year relevant to the previous year in which such tax collection is made.]

(3) Credit for tax collected at source and paid to the account of the Central Government shall be granted on the basis of—

(i) the information relating to collection of tax furnished by the collector to the income-tax authority or the person authorised by such authority; and

(ii) the information in the return of income in respect of the claim for the credit,

subject to verification in accordance with the risk management strategy formulated by the Board from time to time.]

Notes:

^60aInserted by the IT (Ninth Amdt.) Rules, 2024, w.e.f. 16-10-2024.

⁶¹Inserted by the IT (Seventeenth Amdt.) Rules, 2020, w.e.f. 1-10-2020

Rule – 37J

Form for furnishing certificate of accountant under the first proviso to sub-section (6A) of section 206C.

37J. (1) The certificate from an accountant under the first proviso to sub-section (6A) of section 206C shall be furnished in Form 27BA to the Director General of Income-tax (Systems) or the person authorised by the Director General of Income-tax (Systems) in accordance with the procedures, formats and standards specified under sub-rule (2) and verified in accordance with the procedures, formats and standards specified under sub-rule (2).

(2) The Director General of Income-tax (Systems) shall specify the procedures, formats and standards for the purposes of furnishing and verification of the Form 27BA and be responsible for the day-to-day administration in relation to furnishing and verification of the Form 27BA in the manner so specified.

Rule – 114A

Application for allotment of a tax deduction and collection account number.

114A. (1) An application under sub-section (1) of section 203A for the allotment of a tax deduction and collection account number shall be made in duplicate in Form No. 49B :

⁴[Provided that an applicant may apply for allotment of a tax deduction and collection account number through a common application form notified by the Central Government in the Official Gazette, and the Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems) shall specify the classes of persons, applicable forms and formats along with procedure for safe and secure transmission of such forms and formats in relation to furnishing of tax deduction and collection account number.]

(2) An application referred to in sub-rule (1) shall be made,—

i. in cases where the function of allotment of tax deduction and collection account number under section 203A has been assigned by the Chief Commissioner or Commissioner to any particular Assessing Officer, to that Assessing Officer;

ii. in any other case, to the Assessing Officer having jurisdiction to assess the applicant.

(3) The application referred to in sub-rule (1) shall be made,—

i. in a case where a person has deducted tax or collected tax in accordance with the provisions of Chapter XVII under the heading ‘B.—Deduction at source’ or ‘BB.—Collection at source’, as the case may be, prior to the 1st day of October, 2004, on or before the 31st day of January, 2005;

ii. in a case where a person has,—

a. deducted or deducts tax in accordance with the provisions of Chapter XVII under the heading ‘B.—Deduction at source’; or

b. collected or collects tax in accordance with the provisions of Chapter XVII under the heading ‘BB.—Collection at source’,

on or after the 1st day of October, 2004, within one month from the end of the month in which the tax was deducted or collected, as the case may be, or the 31st day of January, 2005, whichever is later.

Note:

⁴Substituted by the IT (Second Amdt.) Rules, 2017, w.e.f. 9-2-2017.

Rule – 114-I

^50-51[Annual Information Statement.

114-I. (1) The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) or any person authorised by him shall, under section 285BB of the Income-tax Act,1961, upload in the registered account of the assessee an annual information statement in Form No. 26AS containing the information specified in column (2) of the table below, which is in his possession within three months from the end of the month in which the information is received by him :

Sl. No.	Nature of information
(1)	(2)
(i)	Information relating to tax deducted or collected at source
(ii)	Information relating to specified financial transaction
(iii)	Information relating to payment of taxes
(iv)	Information relating to demand and refund
(v)	Information relating to pending proceedings
(vi)	Information relating to completed proceedings

(2) The Board may also authorise the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) or any person authorised by him to upload the information received from any officer, authority or body performing any function under any law or the information received under an agreement referred to in section 90 or section 90A of the Income-tax Act,1961 or the information received from any other person to the extent as it may deem fit in the interest of the revenue in the annual information statement referred to in sub-rule (1).

(3) The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) shall specify the procedures, formats and standards for the purposes of uploading of annual information statement referred to in sub-rule (1).]

Note:

^50-51Inserted by the IT (Eleventh Amdt.) Rules, 2020, w.e.f. 1-6-2020.

Rule – 119A

Procedure to be followed in calculating interest.

119A. In calculating the interest payable by the assessee or the interest payable by the Central Government to the assessee under any provision of the Act,—

(a) where interest is to be calculated on annual basis, the period for which such interest is to be calculated shall be rounded off to a whole month or months and for this purpose any fraction of a month shall be ignored; and the period so rounded off shall be deemed to be the period in respect of which the interest is to be calculated;

(b) where the interest is to be calculated for every month or part of a month comprised in a period, any fraction of a month shall be deemed to be a full month and the interest shall be so calculated;

(c) the amount of tax, penalty or other sum in respect of which such interest is to be calculated shall be rounded off to the nearest multiple of one hundred rupees and for this purpose any fraction of one hundred rupees shall be ignored and the amount so rounded off shall be deemed to be the amount in respect of which the interest is to be calculated.

Income Tax Forms

Form No. : 1

¹[Appendix IV

FORM NO. 1

[See rule 11UE (1)]

Undertaking under sub-rule (1) of rule 11UE of the Income-tax Rules, 1962

To,
Principal Commissioner/Commissione
………………….. ………………………. ……………………

Sir/Madam,

I …………………………………….. (name in block letters) son/daughter of …………………………………………. designation ………………………………….. and nationality …………………………………. and related passport number………………………………….. (hereinafter referred to as “signatory”) having Permanent Account Number/Aadhaar Number (see Note 1) …………………………………………………………………. on behalf of ………………………………………… (name of the declarant) having Permanent Account Number/Aadhaar number/Tax Deduction Account Number (see Note 2) ……………………………………….. and being duly authorised and competent to represent the declarant in this regard pursuant to Board Resolution and legal authorisation (see Note 3), as the case may be ,hereby declare as follows:

a. That specified orders have been passed or made in respect of income accruing or arising through or from the transfer of an asset or a capital asset situate in India in consequence of the transfer of a share or interest in a company or entity registered or incorporated outside India made before the 28th day of May, 2012 and particulars of such specified orders are provided in Part A of the Annexure.

b. The declarant has (strike off the options that are not applicable),

i. not filed any appeal or application or petition or proceeding before any Income-tax authority or Authority for Advance Rulings constituted under section 245-O of the Act or the Board for Advance Rulings constituted under section 245-OB or Income-tax Settlement Commission constituted under section 245B or the Interim Board for Settlement constituted under section 245AA or any tribunal or court against the relevant orders, and hereby undertakes that it shall not file any appeal, application, petition or proceeding in future against the relevant order or orders. Particulars of such relevant order or orders are provided in Part B of the Annexure;

ii. filed one or more appeals or applications or petitions or proceeding before any Income-tax authority or Authority for Advance Rulings constituted under section 245-O of the Act or the Board for Advance Rulings under section 245-OB or Income-tax Settlement Commission constituted under section 245B or the Interim Board for Settlement constituted under section 245AA or any tribunal or court against the relevant orders and has irrevocably withdrawn, on a with prejudice basis, all such appeals or applications or petitions or proceeding and evidence thereof is furnished herewith and hereby undertakes that it shall not file any appeal, application, petition or proceeding in future against the relevant order or orders. Particulars of such appeals or applications or petitions or proceeding filed and irrevocably withdrawn with prejudice by the declarant, are provided in Part C of the Annexure;

iii. filed one or more appeals or applications or petitions or proceeding before any Income-tax authority or Authority for Advance Rulings constituted under section 245-O of the Act or the Board for Advance Rulings under section 245-OB or Income-tax Settlement Commission constituted under section 245B or the Interim Board for Settlement constituted under section 245AA or any tribunal or court against the relevant order or orders and all the appeals or applications or petitions or proceeding filed by the declarant have been disposed of and no further appeal or application or petition or proceeding has been filed by the declarant and evidence thereof is furnished herewith and hereby undertake that it shall not file any appeal, application, petition or proceeding in future against the relevant order or orders. Particulars of such appeals or applications or petitions or proceeding filed and disposed of, are provided in Part C of the Annexure;

iv. filed appeals or applications or petitions or proceeding before any Income-tax authority or Authority for Advance Rulings constituted under section 245-O of the Act or the Board for Advance Rulings under section 245-OB or Income-tax Settlement Commission constituted under section 245B or the Interim Board for Settlement constituted under section 245AA or any tribunal or court against the relevant orders and one or more of such appeals or applications or petitions or proceeding are pending as on the date of this undertaking and hereby undertakes to irrevocably withdraw, terminate and discontinue any and all such appeals or applications or petitions or proceeding that are pending as on the date of signing this undertaking, on a with prejudice basis, in accordance with clause (e) below. The declarant further undertakes that it shall not file any such appeal, application, petition or proceeding in future against the relevant order or orders. Particulars of such pending appeals or applications or petitions or proceeding filed by the declarant and their status as on the date of this undertaking, are provided in Part D of the Annexure;

c. The declarant has (strike off the options that are not applicable),

i. not initiated any proceeding for arbitration, conciliation or mediation, and no notice has been given thereof under any law for the time being in force or under any agreement entered into by India with any other country or territory outside India, whether for protection of investment or otherwise against the relevant orders, and hereby undertakes that it shall not initiate any such arbitration, conciliation or mediation in future. Particulars of such relevant order or orders are provided in Part B of the Annexure;

ii. initiated proceeding for arbitration, conciliation or mediation, or notices thereof has been given, under any law for the time being in force or under any agreement entered into by India with any other country or territory outside India, whether for protection of investment or otherwise against the relevant order or orders and has irrevocably, on a with prejudice basis, withdrawn any such proceeding for arbitration, conciliation or mediation, and notices given thereof and evidence thereof is furnished herewith. The declarant hereby undertakes that it shall not reopen in future any such proceeding or initiate or file any such arbitration, conciliation or mediation in future arising out of or in connection with the relevant order or orders. Particulars of such proceeding for arbitration, conciliation or mediation and notices given thereof, initiated and irrevocably withdrawn with prejudice by the declarant, are provided in Part E of the Annexure;

iii. initiated proceeding for arbitration, conciliation or mediation, or notices thereof has been given, under any law for the time being in force or under any agreement entered into by India with any other country or territory outside India, whether for protection of investment or otherwise against the relevant order or orders and all the arbitration, conciliation or mediation filed by the declarant have been disposed of and no further proceeding has been initiated by the declarant and evidence thereof is furnished herewith. The declarant hereby undertakes that it shall not reopen in future any such proceeding or initiate or file any such arbitration, conciliation or mediation in future arising out of or in connection with the relevant order or orders. Particulars of such proceeding for arbitration, conciliation or mediation and notices given thereof, initiated and disposed of, are provided in Part E of the Annexure;

iv. initiated proceeding for arbitration, conciliation or mediation, or notices thereof has been given, under any law for the time being in force or under any agreement entered into by India with any other country or territory outside India, whether for protection of investment or otherwise against the relevant order or orders and one or more of such proceeding or notices are pending on the date of undertaking and hereby undertakes to irrevocably withdraw, terminate and discontinue any and all such proceeding or notices for arbitration, conciliation or mediation that are pending as on the date of signing this undertaking, on a with prejudice basis, in accordance with clause (e) below. Particulars of such pending proceeding and notices filed by the declarant are provided in Part F of the Annexure. The declarant hereby further undertakes that it shall not initiate any such arbitration, conciliation or mediation in future arising out of or in connection with the relevant order or orders;

v. received or got any awards, orders, judgments or any other reliefs issued in favour of the declarant, arising out of or in any way relating to the imposition of tax, interest and penalty based on the relevant order or orders, under any agreement entered into by India with any other country or territory outside India, whether for protection of investment or otherwise and hereby undertakes to irrevocably waive any right to seek or pursue any claim or costs or declaratory relief in relation to or arising out of such awards, orders or judgments or any other relief that may have been ordered, issued or passed against India and any Indian affiliate, whether it is in proceeding initiated by the declarant or by India and any Indian affiliate. The declarant also undertakes to irrevocably waive any right to seek or pursue any claim for costs or relief in respect of any proceeding initiated by the Republic of India to set aside such award, order or judgment or any other relief issued in favour of the declarant. The declarant hereby undertakes that it shall not initiate or file any such arbitration, conciliation or mediation in future. Particulars of such awards, orders, judgment or any other relief are provided in Part G of the Annexure;

.d. The declarant has (strike off the options that are not applicable),

i. not initiated any proceeding to enforce or pursue attachments in connection with any awards, orders, judgments, any other relief that may have been ordered, issued or passed by any tribunal or court or other judicial, quasi-judicial or administrative authority in relation to the said arbitration, conciliation or mediation proceeding in favour of the declarant as referred in clause (c) of this undertaking either against the Republic of India and any Indian affiliate, and hereby undertakes that it shall not initiate any such proceeding in future. Particulars of such award, order or judgment are provided in Part B of the Annexure;

ii. initiated proceeding to enforce or pursue attachments in connection with any awards, orders, judgments or any other relief that may have been ordered, issued or passed by any tribunal or court or other judicial, quasi-judicial or administrative authority in relation to the said arbitration, conciliation or mediation proceeding in favour of the declarant, as referred to in clause (c) of this undertaking against the Republic of India and any Indian affiliate. The declarant has irrevocably and with prejudice withdrawn or discontinued any such proceeding and hereby undertakes that it shall not reopen any such proceeding in future or file or initiate fresh proceeding to enforce or pursue attachments and evidence thereof is furnished herewith. Particulars of such proceeding, initiated and withdrawn or discontinued by the declarant, are provided in Part H of the Annexure;

iii. initiated proceeding to enforce or pursue attachments in connection with any awards, orders, judgments or any other relief that may have been ordered, issued or passed by any tribunal or court or other judicial, quasi-judicial or administrative authority in relation to the said arbitration, conciliation or mediation proceeding in favour of the declarant, as referred to in clause (c) of this undertaking against the Republic of India and any Indian affiliate. All such proceeding filed by the declarant have been disposed of and no further proceeding has been filed by the declarant and evidence is herewith furnished and hereby undertakes that it shall not reopen any such proceeding in future or file or initiate fresh proceeding to enforce or pursue attachments. Particulars of such proceeding, initiated and disposed of, are provided in Part H of the Annexure;

iv. initiated proceeding to enforce or pursue attachments in connection with any awards, orders, judgments, or any other relief that may have been ordered, issued or passed by any tribunal or court or other judicial, quasi-judicial or administrative authority in relation to the said arbitration, conciliation or mediation proceeding in favour of the declarant as referred to in clause (c) of this undertaking, either against the Republic of India and any Indian affiliate and one or more of such proceeding are pending on the date of undertaking and, the declarant has obtained one or more orders from any court or other authority which remain outstanding against India and any Indian Affiliate. The declarant hereby undertakes that it shall not file in future any such proceeding to enforce or pursue attachments regarding any awards, orders, judgments, or any other relief that may have been ordered , issued or passed by any tribunal or court or other judicial, quasi-judicial or administrative authority in relation to the said arbitration, conciliation or mediation proceeding in favour of the declarant as referenced in clause (c) of this undertaking or to enforce the orders from any court or other authority which remain outstanding against Republic of India and any Indian Affiliate. The declarant further undertakes to fully cooperate with the Republic of India or any Indian affiliate which is subject to such outstanding order, in order to set-aside or otherwise nullify any such outstanding order, and irrevocably and with prejudice waives any rights or remedies arising from such outstanding order. Particulars of such proceeding are provided in Part I of the Annexure. The declarant also undertakes to irrevocably withdraw, terminate and discontinue with prejudice any and all such proceeding to enforce or pursue attachments in accordance with clause (e).

e. The declarant hereby undertakes as follows:

i. to irrevocably and with prejudice withdraw, discontinue, terminate and take all necessary steps to irrevocably and with prejudice close the pending proceeding referred in sub-clause (iv) of clause (b), sub-clause (iv) of clause (c), sub-clause (v) of clause (c) and sub-clause (iv) of clause (d) of this undertaking, as well as any other pending proceeding against India or Indian affiliates relating to the relevant order or orders and not referenced in clauses (b), (c) and (d) above, and not to pursue in any way and by any means in future the pending proceeding as referenced in clauses (b), (c), and (d) above, and any other pending proceeding relating to the relevant order or orders not referred in the above clauses and any other fresh proceeding relating to the relevant order or orders. In so acting, declarant shall act in accordance with this undertaking and in full cooperation with the Republic of India;

ii. to irrevocably terminate, release, discharge, and forever irrevocably waive any right, whether direct or indirect, and any claims, demands, liens, actions, suits, causes of action, obligations, controversies, debts, costs, attorneys’ fees, court’s fees, expenses, damages, judgments, orders, declaratory reliefs and liabilities of whatever kind or nature at law, in equity, or otherwise, whether now known or unknown previously (or in future discovered), suspected or unsuspected, and whether or not concealed or hidden, which have existed or may have existed, or do exist or which hereafter can, shall or may exist , in relation to any award, order, judgment, or any other relief as referred in clauses (b), (c) and (d) of this undertaking, against the Republic of India and all Indian affiliates, ordered, issued or passed in connection with the relevant order or orders, whether it is in proceeding initiated by the declarant or by Republic of India and any Indian Affiliate. The declarant further undertakes to fully cooperate with the Republic of India or any Indian affiliate which is subject to any outstanding order referenced in clause (d), in order to set-aside or otherwise nullify any such outstanding order, and irrevocably and with prejudice waives any rights or remedies arising from such outstanding order. For the avoidance of doubt, the declarant’s irrevocable waiver includes irrevocable waiver of any right provided by any existing ex parte, provisional, or other kind of court order permitting enforcement or attachment against the Republic of India and any Indian affiliate, in furtherance of any award, order judgment, or any other relief that may have been ordered or issued or passed by any arbitral tribunal as referred in clauses (b), (c) and (d) above. For further avoidance of doubt, the declarant also undertakes to irrevocably waive any right to seek or pursue any claim for costs in respect of any proceeding initiated by Republic of India and any Indian affiliate to set aside such award, order or judgement ordered, issued or passed in favour of the declarant. Such irrevocable waiver includes, but is not limited to, any right under any relevant ex parte order;

iii. to irrevocably waive any right to seek or pursue any claim for costs in respect of any proceeding initiated by the Republic of India to set aside such award, order or judgment, or any other relief issued in favour of the declarant.

f. The declarant specifically represents that all Parts of the Annexure as described in this undertaking are full and complete to the best of its knowledge.

g. The declarant hereby undertakes to irrevocably terminate, release, discharge and forever irrevocably waive any right, whether direct or indirect, and any remedies, claims, demands, liens, actions, suits, causes of action, obligations, controversies, debts, costs, attorneys’ fees, court’s fees, expenses, damages, judgments, orders, compensation, and liabilities of whatever kind or nature at law, in equity, or otherwise, whether now known or unknown, suspected or unsuspected, and whether or not concealed or hidden, which have existed or may have existed, or do exist or which hereafter can, shall or may exist, based on pursuit of any remedy or any and all claims, demands, damages, judgments, awards, costs, expenses, compensation or liabilities of any kind (whether asserted or unasserted) in relation to any facts, events, or omissions occurring from the beginning of time to the date of this undertaking and thereafter in future in relation to taxation of said income or relevant order or orders, or any related award, judgment or court order, which may otherwise be available to the declarant under any law for the time being in force, in equity, under any statute or under any agreement entered into by Republic of India with any country or territory outside Republic of India, whether for protection of investment or otherwise , whether it is in proceeding initiated by the declarant or by Republic of India and any Indian affiliate. For the avoidance of doubt, the declarant’s above waiver includes an irrevocable waiver of any claim against India and any Indian Affiliate to costs incurred or interest accrued in relation to the relevant order or orders, or any related ongoing or completed litigation, arbitration, conciliation or mediation. Moreover, for the avoidance of any doubt, the declarant hereby undertakes (for itself and on behalf of all related parties) to forgo any reliance on any right under any award, judgment, or court order pertaining to the relevant order or orders or under the relevant order or orders.

h. The declarant further represents that as of the date of this undertaking, it has not transferred any of its claims under any award, judgment, or court order pertaining to the relevant order or orders or under the relevant order or orders, or granted any rights, to third parties, and further undertakes to not transfer any of its claims to third parties after entering this undertaking. Where any such claim or right is transferred, the declarant confirms that it has provided the particulars of all the interested parties in Part L, and the undertakings from each of such interested parties is attached with this undertaking in accordance with Part M of the Annexure.

i. In the event that, notwithstanding the foregoing, any person asserts, brings, files or maintains any claim against the Republic of India or Indian affiliates (hereinafter collectively referred to as “releasees”) at any time on or after the date of furnishing this undertaking, the declarant shall indemnify, defend and hold harmless such releasees from and against any and all costs, expenses (including attorney’s fees and court’s fees), interest, damages, and liabilities of any nature arising out of or in any way relating to the assertion or, bringing, filing or maintaining of such claim. The declarant specifically represents that, to the best of its knowledge, after—

i. the execution of this undertaking;

ii. the execution of any separate related undertaking by any other party in connection with the relevant order or orders; and

iii. irrevocable withdrawal of all pending proceeding as outlined in this undertaking, no other claim regarding the said relevant order or orders referenced above, or any related award, judgment, or court order, shall remain outstanding against the Republic of India or any Indian affiliates. To avoid any doubt, the declarant’s indemnity of releasees under this clause shall include any claim brought by any third party alleging that it has obtained the declarant’s claims under an award, judgment or court order or the relevant order or orders. An indemnity bond to this effect is attached in Part N of the undertaking.

j. For the removal of any doubt, the declarant fully assumes the risk through the indemnity in clause (i) of any omission or mistake with respect to securing releasees against any related claim by any person. If the declarant fails to obtain any release from such person, the declarant warrants that it will indemnify the Republic of India or any Indian affiliates from any defense costs, court costs, and damages. An indemnity bond to the effect of clauses (i) and (j) is annexed to the undertaking.

k. The declarant further undertakes to refrain from facilitating, procuring, encouraging or otherwise assisting any person (including but not limited to any related party or interested party) from bringing any proceeding or claims of any kind referred to in the above clauses, or any proceeding or claim of any kind related to any relevant order or orders referred to above (whether in respect of tax, interest or penalty). The declarant shall notify by a public notice or press release, at any time before furnishing intimation in Form No. 3 where this Form is required to be furnished under rule 11UF and before furnishing this undertaking in other cases, that by signing this undertaking any claims arising out of or relating to the relevant order or orders or any related award, judgment or court order, no longer subsist. Such public notice or press release shall include, among other things, confirmation that,—

i. the declarant (and its related parties) forever irrevocably forgo any reliance on any right and provisions under any award, judgment or court order pertaining to the relevant order or orders or under the relevant order or orders;

ii. the declarant has provided this undertaking, which includes a complete release of the Republic of India and any Indian Affiliates with respect to any award, judgment or court order pertaining to the relevant order or orders or under the relevant order or orders, and with respect to any claim pertaining to the relevant order or orders;

iii. the undertaking also includes an indemnity against any claims brought against the Republic of India or any India affiliate, including by related parties or interested parties, contrary to the release; and

iv. the declarant confirms it will treat any such award, judgment or court order as null and void and without legal effect to the same extent as if it had been set aside by a competent court and will not take any action or initiate any proceeding or bring any claim based on that.

l. The declarant confirms that the undertakings given herein are intended to be enforceable by the Republic of India, including so as to secure the irrevocable waiver, withdrawal or discontinuance (as appropriate) of all the proceeding and claims referred to in any of the clauses of this undertaking.

m. The declarant represents and warrants that:

i. it has full legal power and authority to execute and deliver this undertaking (including but not limited to the issuance of the indemnity described in clauses (i) and (j)under applicable law;

ii. the execution, delivery and performance of this undertaking (including but not limited to the issuance of the indemnity described in clauses (i) and (j) has been duly authorised by all necessary corporate action, including but not limited to any board resolution or similar authorisation under applicable law (see Note 3);

iii. this undertaking constitutes the legal, valid and binding obligation of the declarant, enforceable against the declarant in accordance with its terms;

iv. such authorisations described in the above sub-clauses (i), (ii) and (iii) are effective under applicable law, and to this end, letters from local counsel in the relevant jurisdictions are attached to this undertaking which confirm the legality of such authorisations under applicable law.

n. The declarant confirms that by submitting the present undertaking, it fulfills the conditions specified in the Explanation below the sixth proviso to Explanation 5 to clause (i) of sub-section (1) of section 9.

o. The details of the bank account in which the refund may be credited are provided in Part J of the Annexure.

p. The details of all the interested parties are provided in Part K and Part L of the Annexure. The undertaking in Part M of the Annexure by each of such persons is attached with this undertaking. The declarant represents and warrants that:

i. all such undertakings have been executed and delivered by the person who has full legal power and authority to execute and deliver such undertakings;

ii. the execution, delivery and performance of this undertaking has been duly authorised by all necessary corporate action; and

iii. this undertaking constitutes the legal, valid and binding obligation of the declarant, enforceable against such person in accordance with its terms. Such separate, related undertakings may take the same form as this undertaking.

q. The declarant is or is not covered under sub-rule (6) of rule 11UF and in case if the declarant is not covered under said sub-rule all the conditions provided under sub-rule (2) of rule 11UE have been fulfilled.

r. This undertaking is governed by relevant Indian law and any dispute with respect to this undertaking shall be subject to Indian laws and be decided in accordance with the procedures specified in the Act under the exclusive jurisdiction of the relevant income-tax authorities, tribunals or courts in Republic of India, as the case may be, which are empowered to decide disputes under the Act.

I also confirm that I am aware of all the consequences and implications of this undertaking.

Place:…………………………………

Signature:………………………………….

Date: …………………………………………………………………………………………………………………………….

Attachments

1. The Board Resolution or legal authorisation, as the case may be, as referred to in clause (m) of the undertaking

2. An indemnity bond to the effect of clause (i) and clause (j) of the undertaking attached in Part N of the undertaking.

3. Copy of the public notice referred to in clause (k) of the undertaking, where Form No. 3 is not required to be furnished under sub-rule (6) of rule 11UF.

4. Attachments as required in different parts of the Annexure to this undertaking.

Notes

1. This information is required to be furnished where the Permanent Account Number or Aadhaar Number of the signatory is available.

2. Company Identification Number and Taxpayer Identification Number are to be provided where Permanent Account Number or Aadhaar Number or Tax Deduction Account Number of the declarant are not available.

3. The Board Resolution or legal authorisation, as referred to in clause (m) of the undertaking shall, among other things:

a. record the signatory’s power and authority to give the undertaking on behalf of the declarant; and

b. record the declarant’s power and authority to indemnify defend and hold harmless the Republic of India and the Indian affiliates in accordance with clause (i) of the undertaking.

VERIFICATION

Verified that the contents of this undertaking are true to the best of my knowledge and belief. No part of the undertaking is false and nothing has been concealed or misstated therein.

Verified at________________ place_______________ on this the_________ day________________ of ______ month_______________ , year .

Place: ……………………

Date:……………………..

Signature…………………………

Annexure

Part A– Particulars of the relevant order or orders:

Sl. No.	Assessment Year or Financial year	Income-tax Authority passing the order	Details of the order under consideration		Taxes or penalty determined	Interest	Total demand	Relief, provided in any appeal proceeding , if any	Demand recovered from the declarant	Pending demand or refund due as on date	Details of the attachments made by any Income-tax Authority
			Section and sub-section of the Income-tax Act, 1961	Date of order
(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)	(10)	(11)	(12)

Part B– Particulars of the relevant order or orders covered by sub-clause (i) of clauses (b), (c) and (d) of the undertaking:

Sl. No.	Sl. No. in Part A where the relevant order is mentioned	No appeal or application or petition or proceeding before any Income-tax authority or Authority for Advance Rulings constituted under section 245-O of the Act or the Board for Advance Rulings under section 245-OB or Income-tax Settlement Commission constituted under section 245B or the Interim Board for Settlement constituted under section 245AA or any tribunal or court has been filed(refer clause (b)(i) of the undertaking).	No proceeding has been initiated for arbitration, conciliation or mediation, and no notice has been given thereof under any law for the time being in force or under any agreement entered into by India with any other country or territory outside India, whether for protection of investment or otherwise (refer clause (c)(i) of the undertaking).	No proceeding initiated to enforce or pursue attachments in connection with any award, order or judgment, any other relief that may have been ordered or issued or passed by any tribunal or court or other judicial or administrative authority in relation to the said arbitration, conciliation or mediation proceeding in favour of the declarant against the Republic of India and Indian affiliates (refer clause (d)(i) of the undertaking).
(1)	(2)	(3)	(4)	(5)
		Applicable or Not applicable	Applicable or Not applicable	Applicable or Not applicable

Part C: Particulars of the appeals or applications or petitions or proceeding under sub-clauses (ii) and (iii) of clause (b) of the undertaking:

Sl. No.

Sl. No. in Part A where the relevant order is mentioned

Nature of appeals or applications or petitions or proceeding

Income-tax authority or Authority for Advance Rulings constituted under section 245-O of the Act or the Board for Advance Rulings under section
245-OB or Income-tax Settlement Commission
constituted under section 245B or the Interim Board for Settlement constituted under section 245AA or any tribunal or court before whom such appeals or applications or petitions or proceeding has been filed

Date of filing the appeals or applications or petitions or proceeding

Date of disposing of or withdrawal such appeals or applications or petitions or proceeding (Please attach a copy of order by the Income-tax
authority or Authority for Advance Rulings constituted
under section 245-O of the Act or the Board for Advance Rulings under section 245-OB or Income-tax Settlement
Commission constituted under section 245B or the Interim
Board for Settlement constituted
under section 245AA or any
tribunal or court accepting the
withdrawal or disposing of)

(1)

(2)

(3)

(4)

(5)

(6)

Part D – Particulars of the appeals or applications or petitions or proceeding under sub-clause (iv) of clauses (b) of the undertaking:

Sl. No.	Sl. No. in Part A where the relevant order is mentioned	Nature of appeals or applications or petitions or proceeding	Income-tax authority or Authority for Advance Rulings constituted under section 245-O of the Act or the Board for Advance Rulings under section 245-OB or Income-tax Settlement Commission constituted under section 245B or the Interim Board for Settlement constituted under section 245AA or any tribunal or court before whom such appeals or applications or petitions or proceeding has been filed	Date of filing the appeals or applications or petitions or proceeding
(1)	(2)	(3)	(4)	(5)

Part E – Particulars of the proceeding for arbitration, conciliation or mediation, or notices under sub-clause (ii) and (iii) of clause (c) of the undertaking:

Sr. No.

Sl. No in Part A where the
relevant
order is mentioned

Nature of proceeding for arbitration,
conciliation or mediation, or notices
thereof with
case number or Notice given

Particulars (including the name of the country) where such proceeding for
arbitration,
conciliation or
mediation are
pending or
notices thereof
have been
issued

Date of initiating the proceeding for arbitration, conciliation or
mediation/issue of notice

Name of the agreement entered into
by India
under which the proceeding for arbitration, conciliation or mediation are pending

Status of the proceeding for arbitration,
conciliation or mediation

Date of disposing of or withdrawal of such proceeding
for arbitration,
conciliation or mediation, or
notices (Please
attach evidence of
such disposing of or withdrawal,
including order of
the Tribunal or court or other
judicial or
quasi-judicial or administrative
authority).

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

Part F – Particulars of the proceeding for arbitration, conciliation or mediation, or notices under sub-clause (iv) of clause (c) of the undertaking:

Sl. No.	Sl. No in Part A where the relevant order is mentioned	Nature of proceeding for arbitration, conciliation or mediation, or notices thereof with case number or Notice given	Particulars (including the name of the country where such proceeding for arbitration, conciliation or mediation are pending or notices thereof have been issued)	Date of initiating the proceeding for arbitration, conciliation or mediation/issue of notice	Name of the agreement entered into by India under which proceeding for arbitration, conciliation or mediation are pending	Status of the proceeding for arbitration, conciliation or mediation
(1)	(2)	(3)	(4)	(5)	(6)	(7)

Part G – Particulars of the award, order or judgment or any other relief under sub-clause (v) of clause (c) of the undertaking:

Sl. No.	Sl. No. in Part A where the relevant order is mentioned	Nature of such award, order or judgment or any other relief	Particulars (including the name of the country) where proceeding related to such award, order, judgment or any other relief were held	Date of such award, order, judgment or any other relief along with reference number	Status of the award, order, judgment or any other relief
(1)	(2)	(3)	(4)	(5)	(6)

Part H – Particulars of the proceeding to enforce any award, order or judgment or any other relief under sub-clauses (ii) and (iii) of clause (d) of the undertaking:

Sl. No.	Sl. No. in Part A where the relevant order is mentioned	Nature of proceeding to enforce such award, order or judgment or any other relief	Particulars (including the name of the country where such proceeding to enforce any award, order or judgment or any other relief are taking place)	Date of filing proceeding to enforce any award, order or judgment or any other relief	Nature of such award, order or judgment or any other relief (Attach copy thereof)	Status of the proceeding to enforce such award, order or judgment or any other relief	Date of disposing of or withdrawal of proceeding to enforce such award, order or judgment or any other relief (Please attach a copy of evidence of such disposing of/withdrawal, including order of the Court or other judicial authority)
(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)

Part I – Particulars of the proceeding to enforce any award, order or judgment or any other relief under sub-clause (iv) of clause (d) of the undertaking:

Sl. No.	Sl. No in Part A where the relevant order is mentioned	Nature of proceeding to enforce such award, order or judgment or any other relief	Particulars (including the name of the country where such proceeding to enforce any award, order or judgment or any other relief are taking place)	Date of filing proceeding to enforce any award, order or judgment or any other relief	Nature of such award, order or judgment or any other relief (Attach copy thereof)	Status of the proceeding to enforce such award, order or judgment or any other relief
(1)	(2)	(3)	(4)	(5)	(6)	(7)

Part J – Details of bank account in Republic of India to which the refund is to be remitted

Sl. No.	Bank Name and Address	Account Number and other required details for remittance
(1)	(2)	(3)

Part K– Details of all the companies or entities in the entire chain of holding of the declarant till the ultimate holding company or entity of the declarant:

Sl. No.	Name of holding company	Percentage of the ownership by such holding company in the declarant as on the date of undertaking	If the ownership in the declarant is not held directly by such holding company, the chain of ownership with the names of all the companies in the chain of ownership
(1)	(2)	(3)	(4)

Part L- Details of all the interested parties other than the interested parties covered under Part K

Sl. No.	Name of such persons whose interest may be affected directly or indirectly by this undertaking	Nature of interest of such person	Amount of interest of such person (Rs), if available
(1)	(2)	(3)	(4)

PART M Undertaking by person(s) declared in Part K and Part L of the Undertaking

To,
Principal Commissioner/Commissioner
……………….. ……………………… ………….

Sir/Madam,

I………………….. (name in block letters) son/daughter of…………………………………………….. designation ……………….. .and nationality …………………………. .and related passport number……………………………… (hereinafter referred to as “signatory”) having Permanent Account Number/Aadhaar Number (see Note 1) ………………………………. on behalf of …………………………………. . (name of the interested party) having Permanent Account Number/Aadhaar number/Tax Deduction Account Number (see Note 2) …………………………………………. . and being duly authorised and competent to represent the interested party in this regard pursuant to Board Resolution and legal authorisation (see Note 3), as the case may be , hereby declare as follows:

(a) The particulars of specified orders that have been passed or made in respect of income accruing or arising through or from the transfer of an asset or a capital asset situate in India in consequence of the transfer of a share or interest in a company or entity registered or incorporated outside Republic of India made before the 28th day of May, 2012 in the case of declarant and the nature of interest of the interested party in such specified orders are provided in Part MA of the Annexure.

(b) The interested party has (strike off options that are not applicable):

i. not filed any appeal or application or petition or proceeding before any Income-tax authority or Authority for Advance Rulings constituted under section 245-O of the Act or the Board for Advance Rulings under section 245-OB or Income-tax Settlement Commission constituted under section 245B or the Interim Board for Settlement constituted under section 245AA or any tribunal or court against the relevant order or orders, and hereby undertakes that it shall not file any appeal, application, petition or proceeding in future against the relevant order or orders. Particulars of such relevant order or orders are provided in Part MB of the Annexure;

ii. filed one or more appeals or applications or petitions or proceeding before any Income-tax authority or Authority for Advance Rulings constituted under section 245-O of the Act or the Board for Advance Rulings under section 245-OB or Income-tax Settlement Commission constituted under section 245B or the Interim Board for Settlement constituted under section 245AA or any tribunal or court against the relevant order or orders and has irrevocably, on a with prejudice basis, withdrawn all such appeals or applications or petitions or proceeding or such appeals or applications or petitions or proceeding have been disposed at any time before the date of filing Form No. 1, and hereby undertake that it shall not file any appeal, application, petition or proceeding in future against the relevant order or orders. Particulars of such appeals or applications or petitions or proceeding filed and irrevocably withdrawn with prejudice by the interested party, are provided in Part MC of the Annexure.

iii. filed one or more appeals or applications or petitions or proceeding before any Income-tax authority or Authority for Advance Rulings constituted under section 245-O of the Act or the Board for Advance Rulings under section 245-OB or Income-tax Settlement Commission constituted under section 245B or the Interim Board for Settlement constituted under section 245AA or any tribunal or court against the relevant order or orders and all the appeals or applications or petitions or proceeding filed by the interested party have been disposed of and no further appeal or application or petition or proceeding has been filed by the interested party and evidence thereof is furnished herewith and hereby undertake that it shall not file any appeal, application, petition or proceeding in future against the relevant order or orders. Particulars of such appeals or applications or petitions or proceeding filed and disposed of, are provided in Part MC of the Annexure.

iv. filed appeals or applications or petitions or proceeding before any Income-tax authority or Authority for Advance Rulings constituted under section 245-O of the Act or the Board for Advance Rulings under section 245-OB or Income-tax Settlement Commission constituted under section 245B or the Interim Board for Settlement constituted under section 245AA or any tribunal or court against the relevant order or orders and one or more of such appeals or applications or petitions or proceeding are pending as on the date of this undertaking and hereby undertakes to irrevocably withdraw, terminate and discontinue any and all such appeals or applications or petitions or proceeding that are pending as on the date of signing this undertaking, on a with prejudice basis, in accordance with clause (e) below. The interested party further undertakes that it shall not file any such appeal, application, petition or proceeding in future against the relevant order or orders. Particulars of such pending appeals or applications or petitions or proceeding filed by the interested party and their status as on the date of this undertaking, are provided in Part D of the Annexure. Particulars of any appeals or applications or petitions or proceeding as described in this clause (b) which are not covered by the sub-clauses (i) and (ii) are also provided in Part MD of the Annexure.

i. not initiated any proceeding for arbitration, conciliation or mediation, and no notice has been given thereof under any law for the time being in force or under any agreement entered into by Republic of India with any other country or territory outside India, whether for protection of investment or otherwise against the relevant order or orders, and hereby undertakes that it shall not initiate any such arbitration, conciliation or mediation in future. Particulars of such relevant order or orders are provided in Part MB of the Annexure;

ii. initiated proceeding for arbitration, conciliation or mediation, or notices thereof has been given, under any law for the time being in force or under any agreement entered into by India with any other country or territory outside India, whether for protection of investment or otherwise against the relevant order or orders and has irrevocably, on a with prejudice basis, withdrawn any such proceeding for arbitration, conciliation or mediation, and notices given thereof. The interested party hereby undertakes that it shall not reopen in future any such proceeding or initiate or file any such arbitration, conciliation or mediation in future arising out of or in connection with the relevant order or orders. Particulars of such proceeding for arbitration, conciliation or mediation and notices given thereof, initiated and irrevocably withdrawn with prejudice by the interested party, are provided in Part ME of the Annexure.

iii. initiated proceeding for arbitration, conciliation or mediation, or notices thereof has been given, under any law for the time being in force or under any agreement entered into by Republic of India with any other country or territory outside India, whether for protection of investment or otherwise against the relevant order or orders and all the arbitration, conciliation or mediation filed by the interested party have been disposed of and no further proceeding has been initiated by the interested party and evidence thereof is furnished herewith. The interested party hereby undertakes that it shall not reopen in future any such proceeding or initiate or file any such arbitration, conciliation or mediation in future arising out of or in connection with the relevant order or orders. Particulars of such proceeding for arbitration, conciliation or mediation and notices given thereof, initiated and disposed of, are provided in Part ME of the Annexure.

iv. has initiated proceeding for arbitration, conciliation or mediation, or notices thereof has been given, under any law for the time being in force or under any agreement entered into by Republic of India with any other country or territory outside Republic of India, whether for protection of investment or otherwise against the relevant order or orders and one or more of such proceeding or notices are pending on the date of undertaking and hereby undertakes to irrevocably withdraw, terminate and discontinue any and all such proceeding or notices for arbitration, conciliation or mediation that are pending as on the date of signing this undertaking, on a with prejudice basis, in accordance with clause (e). Particulars of such pending proceeding and notices filed by the interested party are provided in Part F of the Annexure. The interested party hereby further undertakes that it shall not initiate any such arbitration, conciliation or mediation in future arising out of or in connection with the relevant order or orders. Particulars of any proceeding for arbitration, conciliation or mediation, or notices thereof, which are not covered by the sub-clause (i) and sub- clause (ii), are also provided in Part MF of the Annexure.

v. received or got any awards, orders, judgements or any other reliefs issued in favour of the interested party, arising out of or in any way relating to the imposition of tax, interest and penalty based on the relevant order or orders, under any agreement entered into by India with any other country or territory outside India, whether for protection of investment or otherwise and hereby undertakes to irrevocably waive any right to seek or pursue any claim or costs or declaratory relief in relation to or arising out of such awards, orders or judgments or any other relief that may have been ordered, issued or passed against India and any Indian affiliate, whether it is in proceeding initiated by the interested party or by India and any Indian affiliate. The interested party also undertakes to irrevocably waive any right to seek or pursue any claim for costs in respect of any proceeding initiated by the Republic to set aside such award, order or judgment issued in favour of the interested party. The interested party hereby undertakes that it shall not initiate or file any such arbitration, conciliation or mediation in future. Particulars of such awards, orders, judgment or any other relief are provided in Part MG of the Annexure.

(d) The interested party has (strike off options that are not applicable):

i. not initiated any proceeding to enforce or pursue attachments in connection with any awards, orders, judgments, or any other relief that may have been ordered, issued or passed by any tribunal or court or other judicial, quasi-judicial or administrative authority in relation to the said arbitration, conciliation or mediation proceeding in favour of the interested party as referred in clause (c) of this undertaking either against the Republic of India and any Indian affiliate, and hereby undertakes that it shall not initiate any such proceeding in future. Particulars of such award, order or judgment are provided in Part MB of the Annexure.

ii. initiated proceeding to enforce or pursue attachments in connection with any awards, orders, judgements or any other relief that may have been ordered, issued or passed by any tribunal or court or other judicial, quasi-judicial or administrative authority in relation to the said arbitration, conciliation or mediation proceeding in favour of the interested party, as referred to in clause (c) of this undertaking against the Republic of India and any Indian affiliate. The interested party has irrevocably and with prejudice withdrawn or discontinued any such proceeding and hereby undertakes that it shall not reopen any such proceeding in future or file fresh proceeding to enforce or pursue attachments. Particulars of such proceeding, initiated and withdrawn or discontinued by the interested party, are provided in Part MH of the Annexure.

iii. initiated proceeding to enforce or pursue attachments in connection with any awards, orders, judgements or any other relief that may have been ordered, issued or passed by any tribunal or court or other judicial, quasi-judicial or administrative authority in relation to the said arbitration, conciliation or mediation proceeding in favour of the interested party, as referred to in clause (c) of this undertaking against the Republic of India and any Indian affiliate. All such proceeding filed by the interested party have been disposed of and no further proceeding has been filed by the interested party and evidence is herewith furnished and hereby undertakes that it shall not reopen any such proceeding in future or file or initiate fresh proceeding to enforce or pursue attachments. Particulars of such proceeding, initiated and disposed of, are provided in Part MH of the Annexure.

iv. initiated proceeding to enforce or pursue attachments in respect of any awards, orders, judgments, or any other relief that may have been ordered, issued or passed by any tribunal or court or other judicial, quasi-judicial or administrative authority in relation to the said arbitration, conciliation or mediation proceeding in favour of the interested party as referred to in clause (c) of this undertaking, either against the Republic of India and any Indian affiliate and one or more of such proceeding are pending on the date of undertaking and, interested party has obtained one or more orders from any court or other authority which remain outstanding against India and any Indian affiliate. The interested party hereby undertakes that it shall not file in future any such proceeding to enforce or pursue attachments regarding any awards, orders, judgments, or any other relief that may have been ordered , issued or passed by any tribunal or court or other judicial, quasi-judicial or administrative authority in relation to the said arbitration, conciliation or mediation proceeding in favour of the interested party as referenced in clause (c) of this undertaking or to enforce the orders from any court or other authority which remain outstanding against India and any Indian affiliate. The interested party further undertakes to fully cooperate with the Republic of India or any Indian affiliate which is subject to such outstanding order, in order to set-aside or otherwise nullify any such outstanding order, and irrevocably and with prejudice waives any rights or remedies arising from such outstanding order. Particulars of such proceeding, are provided in Part MI of the Annexure. Particulars of any such proceeding, to enforce or pursue attachments in connection with any awards, orders, judgments, or any other relief, which are not covered by the sub-clauses (i) and (ii), are also provided in Part MI of the Annexure. The interested party also undertakes to irrevocably withdraw, terminate and discontinue with prejudice any and all such proceeding to enforce or pursue attachments in accordance with clause (e) below.

(e) The interested party hereby undertakes as follows: –

i. to irrevocably and with prejudice withdraw, discontinue, terminate and take all necessary steps to irrevocably and with prejudice close the pending proceeding referred in sub-clause (iv) of clause (b), sub-clause (iv) of clause (c), sub-clause (v) of clause (c) and sub-clause (iv) of clause (d) of this undertaking, as well as any other pending proceeding against Republic of India or Indian affiliates relating to the relevant order or orders and not referenced in clauses (b), (c) and (d) above, and not to pursue in any way and by any means in future the pending proceeding as referenced in clauses (b), (c) and (d) and any other pending proceeding relating to the relevant order or orders not referred in the above clauses and any other fresh proceeding relating to the relevant order or orders. In so acting, interested party shall act in accordance with this undertaking and in full cooperation with the Republic of India.

ii. to irrevocably terminate, release, discharge, and forever irrevocably waive any right, whether direct or indirect, and any claims, demands, liens, actions, suits, causes of action, obligations, controversies, debts, costs, attorneys’ fees, court’s fees, expenses, damages, judgments, orders, declaratory reliefs, and liabilities of whatever kind or nature at law, in equity, or otherwise, whether now known or unknown previously (or in future discovered), suspected or unsuspected, and whether or not concealed or hidden, which have existed or may have existed, or do exist or which hereafter can, shall or may exist , in relation to any award, order, judgment, or any other relief as referred in clauses (b), (c) and (d) of this undertaking, against the Republic of India and all Indian affiliates, ordered, issued or passed in connection with the relevant order or orders, whether it is in proceeding initiated by the interested party or by India and any Indian affiliate. For the avoidance of doubt, the interested party’s irrevocable waiver includes irrevocable waiver of any right provided by any existing ex parte, provisional, or other kind of court order permitting enforcement or attachment against the Republic of India and any Indian affiliate, in furtherance of any award, order, judgment, or any other relief that may have been ordered or issued or passed by any arbitral tribunal as referred in clauses (b), (c) and (d). The interested party further undertakes to fully cooperate with the Republic of India or any Indian affiliate which is subject to any outstanding order referenced in clause (d), in order to set aside or otherwise nullify any such outstanding order, and irrevocably and with prejudice waives any rights or remedies arising from such outstanding order. For further avoidance of doubt, the interested party also undertakes to irrevocably waive any right to seek or pursue any claim for costs in respect of any proceeding initiated by Republic of India and any Indian Affiliate to set aside such award, order or judgment ordered, issued or passed in favour of the interested party. Such irrevocable waiver includes, but is not limited to, any right under any relevant ex parte order.

(f) The interested party specifically represents that all Parts of the Annexure as described in this undertaking are full and complete to the best of its knowledge.

(g) The interested party hereby undertakes to irrevocably terminate, release, discharge, and forever irrevocably waive any right, whether direct or indirect, and any remedies, claims, demands, liens, actions, suits, causes of action, obligations, controversies, debts, costs, attorneys’ fees, court’s fees, expenses, damages, judgments, orders, compensation and liabilities of whatever kind or nature at law, in equity, or otherwise, whether now known or unknown, suspected or unsuspected, and whether or not concealed or hidden, which have existed or may have existed, or do exist or which hereafter can, shall or may exist, based on pursuit of any remedy or any and all claims, demands, damages, judgments, awards, costs, expenses, compensation or liabilities of any kind (whether asserted or unasserted) in relation to any facts, events, or omissions occurring from the beginning of time to the date of this undertaking and thereafter in future in relation to taxation of said income or relevant order or orders, or any related award, judgment or court order, which may otherwise be available to the interested party under any law for the time being in force, in equity, under any statute or under any agreement entered into by India with any country or territory outside India, whether for protection of investment or otherwise , whether it is in proceeding initiated by the interested party or by India and any Indian affiliate. For the avoidance of doubt, the interested party’s above waiver includes an irrevocable waiver of any claim against India and any Indian affiliate to costs incurred or interest accrued in relation to the relevant order or orders, or any related ongoing or completed litigation, arbitration, conciliation or mediation. Moreover, for the avoidance of any doubt, the interested party hereby undertakes to forgo any reliance on any right under any award, judgment, or court order pertaining to the relevant order or orders or under the relevant order or orders.

(h) The interested party further represents that as of the date of this undertaking, it has not transferred any of its claims under any award, judgment, or court order pertaining to the relevant order or orders or under the relevant order or orders, or granted any rights, to third parties, and further undertakes to not transfer any of its claims to third parties after entering this undertaking.

(i) In the event that, notwithstanding the foregoing, any person asserts, brings , files or maintains any claim against the Republic of India or Indian affiliates (hereinafter collectively referred to as “releasees”)at any time on or after the date of furnishing this undertaking, the interested party shall indemnify, defend and hold harmless such releasee from and against any and all costs, expenses (including attorneys’ fees and court’s fees), interest, damages, and liabilities of any nature arising out of or in any way relating to the assertion or, bringing, filing or maintaining of such claim. The interested party specifically represents that, to the best of its knowledge, after

i. the execution of this undertaking;

ii. the execution of any separate related undertaking by any other party in connection with the relevant order or orders; and

iii. irrevocable withdrawal of all pending proceeding as outlined in this undertaking.

no other claim regarding the said relevant order or orders referenced above, or any related award, judgment, or court order, shall remain outstanding against the Republic of India or any Indian affiliate. To avoid any doubt, the interested party’s indemnity of releasees shall include any claim brought by any third party alleging that it has obtained the interested party’s claims under an award, judgment or court order or the relevant order or orders. An indemnity bond to this effect is attached in Part N of the undertaking.

(j) For the avoidance of any doubt, the interested party fully assumes the risk through the indemnity in clause (i) of any omission or mistake with respect to securing releasees against any related claim by any person. If the interested party fails to obtain any release from such person, the interested party warrants that it will indemnify the Republic of India or any Indian affiliates from any defense costs, court costs, and damages. An indemnity bond to the effect of clauses (i) and (j) is annexed to the undertaking.

(k) The interested party further undertakes to refrain from facilitating, procuring, encouraging or otherwise assisting any party (including but not limited to any related party) from bringing any proceeding or claims of any kind referred to in the above clauses, or any proceeding or claim of any kind related to any relevant order or orders referred to above (whether in respect of tax, interest or penalty). The interested party shall notify by a public notice or press release, at any time before furnishing intimation in Form No. 3 where Form No. 3 is required to be furnished under rule 11UF and before furnishing this undertaking in other cases, that by signing this undertaking any claims arising out of or relating to the relevant order or orders or any related award, judgment or court order, no longer subsist. Such public notice shall include, among other things, confirmation that,-

i. the interested party forever irrevocably forgoes any reliance on any right and provisions under any award, judgment, or court order pertaining to the relevant order or orders or under the relevant order or orders;

ii. the interested party has provided this undertaking, which includes a complete release of the Republic of India and any Indian Affiliate with respect to any award, judgment, or court order pertaining to the relevant order or orders or under the relevant order or orders, and with respect to any claim pertaining to the relevant order or orders;

iii. the undertaking also includes an indemnity against any claims brought against the Republic of India or any India affiliate contrary to the release; and

iv. the interested party confirms it will treat any such award, judgment, or court order as null and void and without legal effect to the same extent as if it had been set aside by a competent court and will not take any action or initiate any proceeding or bring any claim based on that.

(l) The interested party confirms that the undertakings given herein are intended to be enforceable by the Republic of India, including so as to secure the irrevocable waiver, withdrawal or discontinuance (as appropriate) of all the proceeding and claims referred to in any of the clauses of this undertaking.

(m) The interested party represents and warrants that:

i. it has full legal power and authority to execute and deliver this undertaking (including but not limited to the issuance of the indemnity described in clauses (i) and (j) under applicable law;

iii. this undertaking constitutes the legal, valid and binding obligation of the interested party, enforceable against the interested party in accordance with its terms;

(n) This undertaking is governed by relevant Indian law and any dispute with respect to this undertaking shall be subject to Indian laws and be decided in accordance with the procedures specified in the Act under the exclusive jurisdiction of the relevant Income-tax authorities, tribunals or courts in India, as the case may be, which are empowered to decide disputes under the Act.

I also confirm that, I am aware of all the consequences and implications of this undertaking.

Place: ……………….. .

Date: ……………………….. .

Signature………………………………………….

Attachments

1. The Board Resolution and legal authorisation, as referred to in clause (m) of Part M.

2. An indemnity bond to the effect of clauses (i) and (j) of Part M in Part N of the undertaking in Form No. 1;

3. Copy of the public notice referred to in clause (k) of Part M, where Form No. 3 is not required to be furnished under sub-rule (6) of rule 11UF.

4. Attachments as required in different parts of the Annexure to Part M of this undertaking

Notes:

1. This information is required to be furnished where the Permanent Account Number or Aadhaar Number of the signatory is available.

2. Company Identification Number and Taxpayer Identification Number are to be provided where Permanent Account Number/Aadhaar Number or Tax Deduction Account Number of the interested party are not available.

3. The Board Resolution or legal authorisation, as referred to in clause (m) of the undertaking shall, among other things:

a. record the Signatory’s power and authority to give the undertaking on behalf of the interested party; and

b. record the interested party’s power and authority to indemnify defend and hold harmless the Republic of India and the Indian affiliates in accordance with clause (i) of the undertaking.

VERIFICATION

Verified that the contents of this undertaking are true to the best of my knowledge and belief. No part of the undertaking is false and nothing has been concealed or misstated therein.

Verified at ___________place_________ on this the ___day ____of ___month ______ ,_year ________ .

Place: ……………..

Date: ……………….

Signature…………….

Annexure

Part MA– Particulars of the relevant order or orders:

Sl. No.	Assessment Year or Financial year	Income-tax Authority passing the order	Details of the order under consideration		Nature of interest of the interested party
			Section and sub-section of the Income-tax Act, 1961	Date of order
(1)	(2)	(3)	(4)	(5)	(6)

Part MB– Particulars of the relevant order or orders covered by sub-clause (i) of clauses (b), (c) and (d) of the undertaking:

Sl. No.	Sl. No. in Part MA where the relevant order is mentioned	No appeal or application or petition or proceeding before any Income-tax authority or Authority for Advance Rulings constituted under section 245-O of the Act or the Board for Advance Rulings under section 245-OB or Income-tax Settlement Commission constituted under section 245B or the Interim Board for Settlement constituted under section 245AA or any tribunal or court has been filed(refer clause (b)(i) of the undertaking).	No proceeding has been initiated for arbitration, conciliation or mediation, and no notice has been given thereof under any law for the time being in force or under any agreement entered into by India with any other country or territory outside India, whether for protection of investment or otherwise (refer clause (c)(i) of the undertaking).	No proceeding initiated to enforce or pursue attachments in connection with any award, order or judgment, any other relief that may have been ordered or issued or passed by any tribunal or court or other judicial or administrative authority in relation to the said arbitration, conciliation or mediation proceeding in favour of the interested party against the Republic of India and Indian affiliates (refer clause (d)(i) of the undertaking).
(1)	(2)	(3)	(4)	(6)
		Applicable or Not applicable	Applicable or Not applicable	Applicable or Not applicable

Part MC – Particulars of the appeals or applications or petitions or proceeding under sub-clauses (ii) and (iii) of clause (b) of the undertaking:

Sl. No.	Sl. No. in Part MA where the relevant order is mentioned	Nature of appeals or applications or petitions or proceeding	Income-tax authority or Authority for Advance Rulings constituted under section 245-O of the Act or the Board for Advance Rulings under section 245-OB or Income-tax Settlement Commission constituted under section 245B or the Interim Board for Settlement constituted under section 245AA or any tribunal or court before whom such appeals or applications or petitions or proceeding has been filed	Date of filing the appeals or applications or petitions or proceeding	Date of disposing of or withdrawal of such appeals or applications or petitions or proceeding (Please attach a copy of order by the Income-tax authority or Authority for Advance Rulings constituted under section 245-O of the Act or the Board for Advance Rulings under section 245-OB or Income-tax Settlement Commission constituted under section 245B or the Interim Board for Settlement constituted under section 245AA or any tribunal or court accepting the withdrawal or disposing of)
(1)	(2)	(3)	(4)	(5)	(6)

Part MD – Particulars of the appeals or applications or petitions or proceeding under sub-clause (iv) of clause (b) of the undertaking:

Sl. No.	Sl. No. in Part MA where the relevant order is mentioned	Nature of appeals or applications or petitions or proceeding	Income-tax authority or Authority for Advance Rulings constituted under section 245-O of the Act or the Board for Advance Rulings under section 245-OB or Income-tax Settlement Commission constituted under section 245B or the Interim Board for Settlement constituted under section 245AA or any tribunal or court before whom such appeals or applications or petitions or proceeding has been filed	Date of filing the appeals or applications or petitions or proceeding
(1)	(2)	(3)	(4)	(5)

Part ME – Particulars of the proceeding for arbitration, conciliation or mediation, or notices under sub-clauses (ii) and (iii) of clause (c) of the undertaking:

Sl. No.	Sl. No. in Part MA where the relevant order is mentioned	Nature of proceeding for arbitration, conciliation or mediation, or notices thereof with case number or Notice given	Particulars (including the name of the country where such proceeding for arbitration, conciliation or mediation are pending or notices thereof have been issued)	Date of initiating the proceeding for arbitration, conciliation or mediation/issue of notice	Name of the agreement entered into by India under which the proceeding for arbitration, conciliation or mediation are pending	Status of the proceeding for arbitration, conciliation or mediation	Date of disposing of or withdrawal of such proceeding for arbitration, conciliation or mediation, or notices (Please attach evidence of such disposing or withdrawal, including order of the Tribunal or court or other judicial or quasi-judicial or administrative authority)
(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)

Part MF – Particulars of the proceeding for arbitration, conciliation or mediation, or notices under sub-clause (iv) of clause (c) of the undertaking:

Sl. No.	Sl. No. in Part MA where the relevant order is mentioned	Nature of proceeding for arbitration, conciliation or mediation, or notices thereof with case number or Notice given	Particulars (including the name of the country where such proceeding for arbitration, conciliation or mediation are pending or notices thereof have been issued)	Date of initiating the proceeding for arbitration, conciliation or mediation/issue of notice	Name of the agreement entered into by India under which the proceeding for arbitration, conciliation or mediation are pending	Status of the proceeding for arbitration, conciliation or mediation
(1)	(2)	(3)	(4)	(5)	(6)	(7)

Part MG – Particulars of the award, order or judgment or any other relief under sub-clause (v) of clause (c) of the undertaking:

Sl. No.	Sl. No. in Part MA where the relevant order is mentioned	Nature of such award, order or judgment or any other relief	Particulars (Including the name of the country) where proceeding related to such award, order, judgment or any other relief were held	Date of such award, order, judgment or any other relief along with reference number	Status of the award, order, judgment or any other relief
(1)	(2)	(3)	(4)	(5)	(6)

Part MH – Particulars of the proceeding to enforce any award, order or judgment or any other relief under sub-clauses (ii) and (iii) of clause (d) of the undertaking:

Sl. No.	Sl. No. in Part MA where the relevant order is mentioned	Nature of proceeding to enforce such award, order or judgment or any other relief	Particulars (including the name of the country where such proceeding to enforce any award, order or judgment or any other relief are taking place)	Date of filing proceeding to enforce any award, order or judgment or any other relief	Nature of such award, order or judgment or any other relief (Attach copy thereof)	Status of the proceeding to enforce such award, order or judgment or any other relief	Date of disposing of or withdrawal of proceeding to enforce such award, order or judgment or any other relief (Please attach a copy of evidence of such disposing of/withdrawal, including order of the Court or other judicial authority)
(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)

Part MI – Particulars of the proceeding under sub-clause (iv) of clause (d) of the undertaking:

Sl. No.	Sl. No. in Part MA where the relevant order is mentioned	Nature of proceeding to enforce such award, order or judgment or any other relief	Particulars (including the name of the country where such proceeding to enforce any award, order or judgment or any other relief are taking place)	Date of filing proceeding to enforce any award, order or judgment or any other relief	Nature of such award, order or judgment or any other relief (Attach copy thereof)	Status of the proceeding to enforce such award, order or judgment or any other relief
(1)	(2)	(3)	(4)	(5)	(6)	(7)

Part N

INDEMNITY BOND

This Indemnity Bond (“Bond”) is made on this………….. day of……….. , 2021 by………….. (name in block letters) son/daughter of………………….. designation and nationality……………………… and related passport number…………….. (hereinafter referred to as “Signatory”) having Permanent Account Number/Aadhaar Number/Tax Deduction Account Number (See Note 1)………………. on behalf of……………. (name of the declarant or interested party, as the case may be) having Permanent Account Number/Aadhaar number/Tax Deduction Account Number………………………… (See Note 2) and being duly authorised and competent to represent the declarant or interested party, as the case may be, in this regard pursuant to Board Resolution or legal authorisation (See Note 3), of the FIRST PART.

And

The Republic of India and any Indian affiliate (hereinafter collectively referred to as “releasees”) of the OTHER PART WHEREAS:

A. The Income-tax Rules, 1962 have been amended and the Income-tax (31st Amendment) Rules, 2021 have come into force from the date of their publication in the Official Gazette.

B. The declarant or interested party, as the case may be, has filed an undertaking under sub-rule (1) of rule 11UE of the Income -tax Rules, 1962, to which this indemnity bond is annexed. Any defined terms not defined herein shall have the same meaning as the definitions given under rule 11UE and the undertaking.

C. Pursuant to the above, the declarant or interested party, as the case may be, has agreed to indemnify, defend and hold harmless the Republic of India and Indian affiliates from and against any and all costs, expenses (including attorney fees and court fees), interest, damages, and liabilities of any nature arising out of or in any way relating to the assertion or, bringing, filing or maintaining of any claim at any time after the date of furnishing the undertaking in Form No. 1 by any person, related to any relevant order or orders, or in relation to any award, order, judgment, or any other relief, or to any dispute underlying the award, and the declarant or interested party, as the case may be, has agreed to furnish an indemnity bond to this effect, such that the declarant or interested party, as the case may be, fully assumes the risk of any omission or mistake with respect to identification and procurement of authorisations and undertakings from any related parties or interested parties as provided in the undertaking, and securing the Republic of India and Indian affiliates from any claim related to any relevant order or orders, or in relation to any award, order, judgment, or any other relief or to the dispute underlying the award against the Republic of India or Indian affiliates in connection with the relevant order or orders.

D. Accordingly the declarant or interested party, as the case may be, is executing this Indemnity Bond in favour of the Republic of India on the terms appearing hereunder.

NOW THIS INDEMINTY BOND WITNESSETH AS FOLLOWS:

1. In the event that any person or entity asserts, brings, files or maintains any claim against any releasee at any time on or after the date of furnishing this undertaking, related to any relevant order or orders, or in relation to any award, order, judgment, or any other relief, or to any dispute underlying the award, against the Republic of India or Indian affiliates in connection with the relevant order or orders, the declarant or interested party, as the case may be, shall indemnify, defend and hold harmless such releasees from and against any and all costs, expenses (including attorney fees and court fees), interest, damages, and liabilities of any nature arising out of or in any way relating to the assertion or, bringing, filing or maintaining of such claim.

2. The declarant or interested party, as the case may be, specifically represents that, to the best of
its knowledge, after—

i. the execution of this undertaking;

ii. the execution of any separate related undertaking by any other party in connection with the relevant order or orders; and

iii. withdrawal of all pending proceeding as outlined in this undertaking,

that no other claim regarding the said relevant order or orders referenced above, or any related award, judgment, or court order, or any aspect of the dispute underlying the award shall remain outstanding against the Republic of India or other releasee.

Explanation I.-For the removal of any doubt, the declarant’s or interested party’s indemnity of releasees under this clause shall include any claim brought by any third party alleging that it has obtained declarant’s or interested party’s, as the case may be, claims under an award, judgment or court order or the relevant order or orders.

Explanation II.- the declarant or interested party, as the case may be, fully assumes the risk through this indemnity of any omission or mistake with respect to securing releasees against any related claim by any person. If the declarant or interested party, as the case may be, fails to obtain any release from such person, the declarant or interested party, as the case may be, indemnifies through this document the releasees from any defense costs, court costs, and damages.

3. This Indemnity Bond shall be governed by the relevant laws of India and the Delhi High Court
shall have sole jurisdiction to entertain and try any dispute or difference arising out of or in connection with the terms of this Bond.

IN WITNESS WHEREOF the undersigned herein has signed and set his hands on this ………………. day of………… , 2021.

For and on behalf of the declarant or interested party, as the case may be,

Name and address of Witness

Signature of the Witness

Place:
Date:
Notes

1. This information is required to be furnished where the Permanent Account Number or Aadhaar Number of the signatory is available.

3. The Board Resolution or legal authorisation, as referred to in clause (m) of the undertaking shall, among other things:

(a) record the signatory’s power and authority to give the undertaking on behalf of the declarant or interested party, as the case may be; and

(b) record the declarant or interested party’s power and authority, as the case may be, to indemnify defend and hold harmless the Republic of India and the Indian affiliates in accordance with clause (i) of the undertaking).]

Form No. : 2

¹[FORM NO. 2
[See rule 11UF]
Form for Certificate Under sub-rule (2) of rule 11UF

<Name of the declarant>
Address of the declarant
Sir/Madam

1. The……………………… (name of the declarant) (hereinafter referred to as the declarant) with Permanent Account Number/Aadhaar number/Tax Deduction Account Number/Company Identification Number and Taxpayer Identification Number……….. has filed an undertaking in Form No. 1 dated………. under sub-rule (1) of the rule 11UE of the rules.

2. Pursuant to the undertaking filed by the declarant in Form No. 1 under sub-rule (1) of rule 11UE, the provisions of fifth proviso to Explanation 5 to clause (i) of sub-section (1) of section 9 of the Act shall be applicable to the orders mentioned below, subject to the fulfilment of the conditions specified in said proviso read with relevant rules and fulfilment of the undertakings by the declarant in Form No. 1:

TABLE

Sl. No.

Sl. No. of the Table in Part A of Form No. 1 where the relevant order is mentioned

Assessment
Year or
Financial
year

Income-tax Authority passing the order

Details of the
order under
consideration

Taxes or
Penalty
determined

Interest

Total demand

Relief, provided in any appeal proceeding,

if any

Demand recovered from the declarant

Pending demand or refund due as on date

Details of
the attachments
made by any Income-tax Authority

Section
and
sub-section
of the
Income-tax
Act, 1961

Date
of
order

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)

(10)

(11)

(12)

(13)

3. Demand recovered, as per the column (11) of the Table above, shall be refunded to the declarant, subject to the conditions under sub-rule (2) of the rule 11UE and the provisions of the Act, without any interest as per the provisions of the sixth proviso to Explanation 5 to clause (i) of sub-section (1) of section 9 of the Act, attachments, if any, the details whereof are provided in column (13) of the Table, shall be revoked and appeals or applications or petitions or proceeding, if any, filed by any income-tax authority or any other person representing the Republic of India with respect to the specified orders, as per column (2) of the Table, shall be withdrawn or intimation shall be sent to the concerned person, on the issue of Form No. 4, as per the procedure provided in sub-rule (16) of rule 11UF. Further, no interest under section 244A of the Act will be payable to the declarant as per the provisions of sixth proviso to Explanation 5 to clause (i) of sub-section (1) of section 9 of the Act.

Certificate No…….
Place…..
Date………..

………………………….

(Principal Commissioner/Commissioner of Income-tax) ]

Form No. : 2A

FORM NO. 2A [Omitted by the IT (Tenth Amdt.) Rules, 2001, w.e.f. 2-7-2001. Earlier, existing Form No. 2A was inserted by the IT (Third Amdt.) Rules, 1994, w.e.f. 1-6-1994; substituted by the IT (Fourth Amdt.) Rules, 1995, w.e.f. 1-6-1995; amended by the IT (Fourth Amdt.) Rules, 1998, w.e.f. 1-4- 1998 and later on substituted by the IT (Fifth Amdt.) Rules, 2000, w.e.f. 11-5-2000.]

Form No. : 2B

FORM NO. 2B [Omitted by the IT (Twenty-first Amdt.) Rules, 2021, w.e.f. 29-7-2021 (see rule 130). Earlier, Form No. 2B was inserted by the IT (Sixteenth Amdt.) Rules, 1995, w.e.f. 23-8-1995; amended by the IT (Eighth Amdt.) Rules, 1999, w.e.f. 18-5-1999, IT (Sixth Amdt.) Rules, 2000, w.e.f. 11-5-2000 and later on substituted by the IT (Fifteenth Amdt.) Rules, 2001, w.e.f. 27-7-2001.]

Form No. : 2C

FORM NO. 2C [Omitted by the IT (Twenty-first Amdt.) Rules, 2021, w.e.f. 29-7-2021 (see rule 130). Earlier, Form No. 2C was inserted by the IT (Eighth Amdt.) Rules, 1997, w.e.f. 27-6-1997; substituted by the IT (Eleventh Amdt.) Rules, 1998, w.e.f. 25-8-1998; amended by the IT (Seventh Amdt.) Rules, 2000, w.e.f. 11-5-2000 and IT (Eighteenth Amdt.) Rules, 2002, w.e.f. 29-7-2002 and later on substituted IT (Sixteenth Amdt.) Rules, 2001, w.e.f. 27-7-2001.]

Form No. : 2E

FORM NO. 2E [Omitted by the IT (Twenty-first Amdt.) Rules, 2021, w.e.f. 29-7-2021 (see rule 130). Earlier, Form No. 2E was inserted by the IT (Sixth Amdt.) Rules, 2003, w.e.f. 14-5-2003 and later on amended by the IT (Ninth Amdt.) Rules, 2004, w.e.f. 14-7-2004 and IT (Sixteenth Amdt.) Rules, 2005, w.e.f. 20-6-2005.]

Form No. : 3

1 [FORM NO. 3
[See rule 11UF]

Intimation for Withdrawal under sub-rule (3) of rule 11UF of the Income- tax Rules, 1962

To,

The Principal Commissioner/Commissioner

………………………………………. ……………………………….

Sir/Madam,

I……………… (name in block letters) son/daughter of ………………… designation ……………..and nationality ………………..and related passport number………………. (hereinafter referred to as “signatory”) having Permanent Account Number/Aadhaar Number ………………………(see Note 1) on behalf of …………………….. (name of the declarant) having Permanent Account Number/Aadhaar number/Tax Deduction Account Number (see Note 2) ……………………………….. and being duly authorised and competent to represent the declarant in this regard pursuant to Board Resolution and legal authorisation (see Note 3), as the case may be, hereby confirm that the declarant has received an order in Form No. 2 dated________

Pursuant thereto, I confirm that the pending appeals or applications or petitions, arbitration, conciliation, mediation, claims or other proceeding, if any, as referred in Part D, Part F, Part G, Part I and Part M of the undertaking in Form No. 1 dated…… have been irrevocably, on a with prejudice basis, withdrawn or discontinued and are not being pursued. The evidence of action taken in this regard are enclosed herewith.

Place…………….
Date…………….

………………..
Signature/Verification

Attachments

1. Attach the Board Resolution or legal authorisation, as the case may be, as referred to in clause (m) of the undertaking.

2. Attach the evidence of action taken as referred above.

VERIFICATION

Verified that the contents of this intimation are true to the best of my knowledge and belief. No part of the intimation is false and nothing has been concealed or misstated therein.

Verified at……place………. on this the ……. day …………. of…. month……….,…year………..

Place: ……………..
Date: …………….

Signature
………………………………..

Notes

1. This information is required to be furnished where the Permanent Account Number or Aadhaar Number of the signatory is available.

2. Company Identification Number and Taxpayer Identification Number are to be provided where Permanent Account Number or Aadhaar Number or Tax Deduction Account Number of the interested party are not available.

3. The Board Resolution or legal authorisation, as referred to in clause (m) of the undertaking and such Board resolution or legal authorisation shall, among other things:

(a) record the signatory’s power and authority to give the undertaking on behalf of the interested party; and

(b) record the interested party’s power and authority to indemnify defend and hold harmless the Republic of India and the Indian affiliates in accordance with clause (i) of the undertaking.]

Form No. : 3AA

FORM NO. 3AA [Omitted by the IT (Twenty-first Amdt.) Rules, 2021, w.e.f. 29-7-2021 (see rule 130). Earlier, Form No. 3AA was inserted by the IT (Fourteenth Amdt.) Rules, 2002, w.e.f. 1-4-2003 and later on amended by the IT (Fifteenth Amdt.) Rules, 2004, w.e.f. 1-4-2005.]

Form No. : 3AAA

FORM NO. 3AAA [Omitted by the IT (Twenty-first Amdt.) Rules, 2021, w.e.f. 29-7-2021 (see rule 130). Earlier, Form No. 3AAA was inserted by the IT (Sixth Amdt.) Rules, 1986, w.e.f. 1-4-1987 and later on amended by the IT (Ninth Amdt.) Rules, 1987 and IT (Fourteenth Amdt.) Rules, 2002, w.e.f. 1-4-2003.]

Form No. : 3AB

FORM NO. 3AB [Omitted by the IT (Thirty-second Amdt.) Rules, 1999, w.e.f. 19-11-1999. Earlier, Form No. 3AB was inserted by the IT (Amdt.) Rules, 1978 and amended by the IT (Sixth Amdt.) Rules, 1986, w.e.f. 1-4-1987.]

Tutorials

Interest for delay in payment of TDS/TCS and for non-payment of tax demanded

Introduction

A person is liable to pay interest for various delays/defaults like interest under section 234A for delay in filing the return of income, interest under section 234B for default in payment of advance tax, interest under section 234C for deferment of payment of individual instalment or instalments of advance tax, interest under section 234D for excess refund granted to the taxpayer, interest under section 201(1A) for failure to deduct tax at source/delay in payment of tax deducted at source and interest under section 206C(7) is levied for failure to collect tax at source/delay in payment of tax collected at source.

The provisions relating to interest under section 234A, section 234B, section 234C and section 234D have been discussed separately. In this part, you can gain knowledge of various provisions relating to interest under section 201(1A) for failure to deduct tax at source/delay in payment of tax deducted at source and interest under section 206C(7) for failure to collect tax at source/delay in payment of tax collected at source.

Basic provisions relating to due date of payment of TDS to the credit of Government

Before understanding the provisions relating to levy of interest for failure to deduct tax at source/delay in payment of TDS, it is important to first understand the provisions relating to the due date for payment of TDS to the credit of the Government account. Section 192 to 195 gives various items of payments on which tax is to be deducted by the payer. The tax deducted by the payer (i.e., a non-Government payer) is to be paid to the credit of the Government as follows:

♦ Tax deducted during the month of April to February should be paid to the credit of the Government on or before 7 days from the end of the month in which the deduction is made.

♦ Tax deducted during the month of March should be paid to the credit of the Government on or before 30th day of April.

Note :

Tax deducted under section 194-IA (i.e., on immovable property), Section 194-IB (i.e. on rent), Section 194M (i.e., on certain sum paid by an Individual/HUF) & section 194S (i.e., on transfer of virtual digital asset) should be paid to the credit of the Government on or before 30 days from the end of the month in which deduction is made.

Illustration

Essem Traders, a partnership firm has taken a loan from Mr. Kaushal (friend of one of its partners). It is paying interest on monthly basis. Monthly interest amounted to Rs. 2,000 and is paid on the last day of each month. The firm has deducted tax @ 10% from the monthly interest and paid the net interest to Mr. Kaushal. The tax deducted by the firm is deposited to the credit of Government by following dates:

*Month*	*Date of deposit with the Government*
Tax deducted during the month of April 2025	03/05/2025
Tax deducted during the month of May 2025	07/06/2025
Tax deducted during the month of June 2025	18/07/2025
Tax deducted during the month of July 2025	02/08/2025
Tax deducted during the month of August 2025	04/09/2025
Tax deducted during the month of September 2025	09/10/2025
Tax deducted during the month of October 2025	06/11/2025
Tax deducted during the month of November 2025	11/12/2025
Tax deducted during the month of December 2025	02/01/2026
Tax deducted during the month of January 2026	05/02/2026
Tax deducted during the month of February 2026	05/03/2026
Tax deducted during the month of March 2026	25/04/2026

Has the firm paid taxes to the credit of the Government within the prescribed time?

Tax deducted during the month of April to February should be paid to the credit of the Government on or before 7 days from the end of the month in which the deduction is made and tax deducted during the month of March should be paid to the credit of the Government on or before 30th day of April. Thus, the due dates for payment of tax to the credit of the Government and the comparison of the due dates with actual dates of payment will be as per the following table :

*TDS for the Month of*	*Due date of deposit of TDS with Government*	*Actual Date of deposit of TDS with Government*	*Whether deposited within the due date?*
April, 2025	07/05/2025	03/05/2025	Yes
May, 2025	07/06/2025	07/06/2025	Yes
June, 2025	07/07/2025	18/07/2025	No
July, 2025	07/08/2025	02/08/2025	Yes
August, 2025	07/09/2025	04/09/2025	Yes
September, 2025	07/10/2025	09/10/2025	No
October, 2025	07/11/2025	06/11/2025	Yes
November, 2025	07/12/2025	11/12/2025	No
December, 2025	07/01/2026	02/01/2026	Yes
January, 2026	07/02/2026	05/02/2026	Yes
February, 2026	07/03/2026	05/03/2026	Yes
March, 2026	30/04/2026	25/04/2026	Yes

Interest for failure to deduct tax at source/delay in payment of TDS

As per section 201, if any person who is liable to deduct tax at source does not deduct it or after so deducting fails to pay, the whole or any part of the tax to the credit of the Government, then, such person, shall be liable to pay simple interest as given below:

♦ Interest shall be levied at 1% for every month or part of a month on the amount of such tax from the date on which such tax was deductible to the date on which such tax was deducted.

♦ Interest shall be levied at 1.5% for every month or part of a month on the amount of such tax from the date on which such tax was deducted to the date on which such tax was actually remitted to the credit of the Government.

In other words, interest will be levied at 1% for every month or part of a month for delay in deduction and at 1.5% for every month or part of a month for delay in remittance after deduction.

Interest in case deductee pays the tax

As per section 201, a payer who fails to deduct whole or any part of the tax at source is treated as an assessee-in-default. However, the payer who fails to deduct the whole or any part of the tax on the payment made to a payee (whether resident or non-resident) shall not be deemed to be an assessee-in-default in respect of tax not deducted by him, if the following conditions are satisfied:

♦ The recipient has furnished his return of income under section 139.

♦ The recipient has taken into account the above income in its return of income.

♦ The recipient has paid the taxes due on the income declared in such return of income.

♦ The recipient furnishes a certificate to this effect from an accountant in Form No. 26A.

In other words, in case of non-deduction of tax at source or short deduction of tax, in case of a payee, if all the discussed conditions are satisfied, then the payer will not be treated as an assessee-in-default. However, in such a case, even if the payer is not treated as an assessee-in-default, he will be liable to pay interest under section 201(1A). In this case, interest shall be payable from the date on which such tax was deductible to the date of furnishing of return of income by such payee. Interest in such a case will be levied at 1% for every month or part of the month.

Note: The order deeming a person to be an assessee in default shall be passed within 7 years (within 6 years from 01-04-2025) from the end of the financial year in which payment is made or credit is given or 2 years from the end of the financial year in which the correction statement is delivered, whichever is later.

Interest shall be paid as per order of the Assessing Officer

If the Assessing Officer has passed an order treating assessee in-default, then the interest shall be paid by the assessee in accordance with the said order.

Filing of TDS statement with payment of interest

Every deductor has to furnish quarterly statement in respect of tax deducted by him i.e., TDS return. As per section 201(1A), interest for delay in payment of TDS should be paid before filing the TDS return.

Basic provisions relating to due date of payment of TCS to the credit of Government

Section 206C gives various items on which tax is to be collected at source. The tax so collected is to be paid to the credit of the Government within a period of 7 days from the last day of the month in which the tax is collected at source. Where it is collected by an office of the Government then it shall be paid to the credit of the Central Government on the same day. If such payment is made without Income-tax challan.

Interest for failure to collect tax at source/delay in payment of TCS

As per section 206C(7), if the person responsible for collecting tax does not collect the tax or after collecting the tax fails to pay it to the credit of Government within the due date prescribed in this regard, then he shall be liable to pay simple interest at the rate of 1% per month or part thereof on the amount of such tax. Interest shall be levied for a period from the date on which such tax was collectible to the date on which the tax was actually paid.

However, with effect from 01-04-2025, the interest rate shall be at the rate of:

a) 1% for every month or part thereof on the amount of such tax from the date on which such tax was collectible to the date on which such tax is collected; and

b) 1.5% for every month or part thereof on the amount of such tax from the date on which such tax was collected to the date on which such tax is actually paid.

Interest in case if the buyer or licensee or lessee has paid the tax

As per section 206C(6A), a payer who fails to collect whole or any part of the tax at source is treated as an assessee-in-default. However a collector who fails to collect the whole or any part of the tax at source (other than TCS referred under sub-section 1F, 1G and 1H) shall not be deemed to be an assessee-in-default in respect of tax not collected by him, if the buyer or licensee or lessee from whom tax is to be collected satisfies the following conditions:

♦ Has furnished his return of income under section 139.

♦ Has taken into account such amount for computing income in such return of income.

♦ Has paid the tax due on the income declared by him in such return of income.

♦ Has furnished a certificate to this effect from an accountant in such Form No.27BA.

In other words, in case of non collection of tax at source or short collection of tax, if above conditions are satisfied, than the person responsible to collect tax at source will not be treated as an assessee-in-default in respect of tax not collected or short collected by him.

However, in such a case, even if the person responsible to collect tax at source is not treated as an assessee-in-default, he will be liable to pay interest under section 206C(7). Interest shall be payable from the date on which such tax was collectible to the date of furnishing of return of income by such buyer or licensee or lessee. Interest in such a case, will be levied at 1% or 1.5%, as the case may be, for every month or part of a month.

Note: The order deeming a person to be an assessee in default shall be passed within 6 years from the end of the financial year in which payment is made or credit is given or 2 years from the end of the financial year in which the correction statement is delivered, whichever is later. (applicable from 01-04-2025)

Interest shall be paid as per order of the Assessing Officer

If the Assessing Officer has passed an order treating assessee in-default, then the interest shall be paid by the assessee in accordance with the said order.

Filing of TCS statement with payment of interest

Every collector has to furnish quarterly statement in respect of tax collected by him i.e., TCS return. As per section 206C(7), interest for delay in payment of TCS should be paid before filing the TCS return.

Interest for non-payment of tax as per demand notice

Before understanding the provisions for levy of interest in case of non-payment of tax demanded as per demand notice issued under section 156(1), it is important to first understand the provisions of section 220(1) relating to payment of tax as per demand notice.

As per section 220(1), when a demand notice under section 156(1) has been issued to the taxpayer for payment of tax (other than notice for payment of advance tax), then such amount shall be paid within a period of 30 days of the service of the notice at the place and to the person mentioned in the notice. In certain cases, the above period of 30 days can be reduced by the tax authorities with the approval of designated authorities.

Section 220(2) deals with payment of interest in case of failure to pay tax within the time specified in the demand notice. As per section 220(2), if the taxpayer fails to pay the amount specified in any notice of demand issued under section 156(1) (as discussed) within the period as allowed in this regard, then he shall be liable to pay simple interest at 1% for every month or part of a month. Interest shall be levied for the period commencing from the day immediately following the end of the period mentioned in the notice and ending with the day on which the amount is paid.

After processing of TDS/TCS statements an intimation is generated specifying the amount payable or refundable. Such intimation shall be deemed as notice of demand under Section 156. Failure to pay such tax specified in intimation shall attract interest under Section 220(2).

It is provided that where interest is charged under sub-section (1A) of section 201 on the amount of tax specified in the intimation issued under sub-section (1) of section 200A for any period, then, no interest shall be charged under Section 220(2) on the same amount for the same period.

It is also provided that where interest is charged under sub-section (7) of section 206C on the amount of tax specified in the intimation issued under sub-section (1) of section 206CB for any period, then, no interest shall be charged under sub-section (2) on the same amount for the same period

Appeal filed to challenge the demand notice

Where any notice of demand has been served upon an assessee and any appeal or other proceeding, as the case may be, is filed or initiated in respect of the amount specified in the said notice of demand, then, such demand shall be deemed to be valid till the disposal of the appeal by the last appellate authority or disposal of the proceedings, as the case may be, and any such notice of demand shall have the effect as specified in section 3 of the Taxation Laws (Continuation and Validation of Recovery Proceedings) Act, 1964 (11 of 1964).]

Variation in amount of interest in certain cases

Where as a result of an order under section 154, or section 155, or section 250, or section 254, or section 260, or section 262, or section 264 or an order of the Settlement Commission under section 245D(4), the amount on which interest was payable under section 220(2) had been reduced, the interest shall be reduced accordingly and the excess interest paid, if any, shall be refunded.

However, if subsequently as a result of an order passed under the said sections or under section 263, the amount on which interest is payable is increased, the assessee shall pay interest from the day immediately following the end of the period mentioned in the first notice of demand and ending with the day on which the amount is paid.

Waiver of interest under section 220(2A) by Commissioner

The Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner may reduce or waive the amount of interest paid or payable by the taxpayer under section 220(2), if he is satisfied that:

♦ Payment of such interest has caused or would cause genuine hardship to the taxpayer.

♦ Default in the payment of the amount on which interest has been paid or was payable, was due to circumstances beyond the control of the taxpayer.

♦ The taxpayer has co-operated in any inquiry relating to the assessment or any proceeding for the recovery of any amount due from him.

Time-limit for passing order under section 220(2A)

The Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, as the case may be, shall pass order, either accepting or rejecting assessee’s application to reduce or waive interest, within a period of 12 months from the end of the month in which application is received. However, order shall be passed on or before May 31, 2017 in case of application pending as on June 1, 2016.

Further, no order rejecting the application shall be passed unless the assessee has been given an opportunity of being heard.

MCQ ON INTEREST FOR DELAY IN PAYMENT OF TDS/TCS AND FOR NON-PAYMENT OF TAX DEMANDED

Q1. Tax deducted during the month of April to February should be paid to the credit of the Government on or before ___________ from the end of the month in which the deduction is made.

(a) 5 days (b) 7 days

Correct answer : (b)

Justification of correct answer :

Tax deducted during the month of April to February should be paid to the credit of the Government on or before 7 days from the end of the month in which the deduction is made.

Thus, option (b) is the correct option.

Q2. Tax deducted during the month of March should be paid to the credit of the Government on or before 30th day of April.

(a)True (b) False

Correct answer : (a)

Justification of correct answer :

Tax deducted during the month of March should be paid to the credit of the Government on or before 30th day of April.

Thus, the statement given in the question is true and hence, option (a) is the correct option.

Q3. Tax deducted under section 194-IA (i.e., on immovable property) in the month of March should be paid to the credit of the Government on or before 30th day of April.

(a) True (b) False

Correct answer : (a)

Justification of correct answer :

Tax deducted under section 194-IA (i.e., on immovable property) should be paid to the credit of the Government on or before 30 days from the end of the month in which the deduction is made. Hence, tax deducted under section 194-IA in the month of March should be paid to the credit of the Government on or before 30th day of April.

Thus, the statement given in the question is true and hence, option (a) is the correct option.

Q4. Interest will be levied ___________ for every month or part of a month for delay in deduction and ___________ for every month or part of a month for delay in remittance after deduction.

(a) @ 1.5%, @ 1% (b) @ 1%, @ 2%

Correct answer : (c)

Justification of correct answer :

Interest will be levied at 1% for every month or part of a month for delay in deduction of tax and at 1.5% for every month or part of a month for delay in remittance of tax after deduction.

Thus, option (c) is the correct option.

Q5. As per section 201(1A), interest for delay in payment of TDS should be paid before filing the TDS return.

(a) True (b) False

Correct answer : (a)

Justification of correct answer :

As per section 201(1A), interest for delay in payment of TDS should be paid before filing the TDS return.

Thus, the statement given in the question is true and hence, option (a) is the correct option.

Q6. Section ___________ gives various items on which tax is to be collected at source.

(a) 201 (b) 203A

Correct answer : (d)

Justification of correct answer :

Section 206C gives various items on which tax is to be collected at source.

Thus, option (d) is the correct option.

Q7. Where the tax is collected by an office of the Government and payment is to be made without Income-tax challan it shall be paid to the credit of the Central Government______.

(a) On or before 7 days of the month following the month in which the tax is collected

(b) On or before 15 days of the month following the month in which the tax is collected

(d) On or before 30 days of the month following the month in which the tax is collected

Correct answer : (c)

Justification of correct answer :

Where the tax is collected by an office of the Government and payment is to be made without income-tax challan, it shall be paid to the credit of the Central Government on the same day.

Thus, option (c) is the correct option.

Q8. Under section 206C(7), simple interest will be levied at the rate of 1% per month or part thereof for a period from the date on which such tax was collectible to the date on which the tax was actually paid.

(a) True (b) False

Correct answer : (a)

Justification of correct answer :

However, with effect from 01-04-2025, the interest rate shall be at the rate of:

c) 1% for every month or part thereof on the amount of such tax from the date on which such tax was collectible to the date on which such tax is collected; and

d) 1.5% for every month or part thereof on the amount of such tax from the date on which such tax was collected to the date on which such tax is actually paid.

Thus, the statement given in the question is true and hence, option (a) is the correct option.

Q9. As per section 220(2), if the taxpayer fails to pay the amount specified in any notice of demand issued under section 156 within the period as allowed in this regard, then he shall be liable to pay simple interest ______ for every month or part of a month.

(a) @ 0.5% (b) @ 1%

Correct answer : (b)

Justification of correct answer :

As per section 220(2), if the taxpayer fails to pay the amount specified in any notice of demand issued under section 156 within the period as allowed in this regard, then he shall be liable to pay simple interest at 1% for every month or part of a month.

Thus, option (b) is the correct option.

Q10. As per section 220(2A), ___________ may reduce or waive the amount of interest paid or payable by the taxpayer under section 220(2).

(a) The Chief Commissioner (b) The Joint Commissioner

Correct answer : (a)

Justification of correct answer :

As per section 220(2A), the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner may reduce or waive the amount of interest paid or payable by the taxpayer under section 220(2), if he is satisfied that:

1) Payment of such interest has caused or would cause genuine hardship to the taxpayer.

2) Default in the payment of the amount on which interest has been paid or was payable, was due to circumstances beyond the control of the taxpayer.

3) The taxpayer has co-operated in any inquiry relating to the assessment or any proceeding for the recovery of any amount due from him.

Thus, option (a) is the correct option.

Late filing fees and penalty for failure to furnish/delay in furnishing the TDS/TCS statements

Before understanding the penalty provisions for failure to furnish the statement of Tax Deducted at Source or statement of Tax Collected as Source (i.e. commonly known as TDS/TCS return) we shall first have a look at the few basic duties of a person liable to deduct/collect tax at source and due dates for filing of TDS/TCS return.

Duties of the person liable to deduct/collect tax at source

He shall obtain Tax Deduction Account Number or Tax Collection Account Number (as the case may be) and quote the same in all the documents pertaining to TDS/TCS.
He shall deduct/collect the tax at source at the applicable rate.
He shall pay the tax deducted/collected by him to the credit of the Government.
He shall file the periodic TDS/TCS statements, i.e., TDS/TCS return.
He shall issue the TDS/TCS certificate in respect of tax deducted/collected by him.

Due Dates for filing of TDS/TCS return

The due dates for filing of TDS/TCS return for different quarters of Financial Year 2025- 26 are as follows:

Quarter ending	Due date for filing of TDS return (Both for Government and other Deductor)	Due date for filing of TCS return
30th June 2025	31st July 2025	15th July 2025
30th September 2025	31st October 2025	15th October 2025
31st December 2025	31st January 2026	15th January 2026
31st March 2026	31th May 2026	15th May 2026

Basic provisions

A person who fails to file the TDS/TCS return or does not file the TDS/TCS return by the due dates prescribed in this regard has to pay late filing fees as provided under section 234E and apart from late filing fees he shall be liable to pay penalty under section 271H. In this part you can gain knowledge about the provisions of section 234E and section 271H.

Late filing fees under section 234E

As per section 234E, where a person fails to file the TDS/TCS return on or before the due date prescribed in this regard, then he shall be liable to pay, by way of fee, a sum of Rs. 200 for every day during which the failure continues. The amount of late fees shall not exceed the amount of TDS.

TDS/TCS return cannot be filed without payment of late filing fees as discussed above. In other words, the late filing fees shall be deposited before filing the TDS return. It should be noted that Rs. 200 per day is not penalty but it is a late filing fee.

Illustration

The quarterly statement of TDS i.e. TDS return for the first quarter of the year 2025-26 is filed by Mr. Kapoor on 4-4-2026. Tax deducted at source during the quarter amounted to Rs. 8,40,000. What will be the amount of late filing fees to be paid by him for delay in filing the TDS return?

The due date for filing of TDS return for the first quarter of the year 2025-26 i.e. April 2025 to June 2025 is 31st July, 2025. The return is filed on 4th April, 2026, thus there is a delay of 247 days as computed below:

*Particulars*	*Days*
August 2025	31
September 2025	30
October 2025	31
November 2025	30
December 2025	31
January 2026	31
February 2026	28
March 2026	31
April 2026	4
*Total*	247

From the above computation it can be observed that there is a delay of 247 days. Late filing fees under section 234E will be charged at Rs. 200 per day, thus for 247 days the late filing fees will come to Rs. 49,400.

Illustration

The quarterly statement of TDS i.e. TDS return for the second quarter of the year 2025-26 is filed by Essem Ltd. on 4-4-2026. Tax deducted at source during the quarter amounted to Rs. 8,400. What will be the amount of late filing fees to be paid by the company for delay in filing the TDS return?

The due date of filing the TDS return for the second quarter of the year 2025-26 i.e. July 2025 to September 2025 is 31^st October, 2025. The return is filed on 4th April, 2026, thus there is a delay of 155 days as computed below:

*Particulars*	*Days*
November 2025	30
December 2025	31
January 2026	31
February 2026	28
March 2026	31
April 2026	4
Total	155

From the above computation it can be observed that there is a delay of 155 days. Late filing fees under section 234E will be charged at Rs. 200 per day, thus for 155 days the late filing fees will come to Rs. 31,000. However, the late filing fees cannot exceed the amount of tax deducted at source. TDS for the quarter is Rs. 8,400 and hence late filing fees shall be Rs. 8,400.

Illustration

The quarterly statement of tax collected at source i.e. TCS return for the first quarter of the year 2025-26 is filed by Mr. Krunal on 4-8-2025. Tax collected at source during the quarter amounted to Rs. 84,000. What will be the amount of late filing fees to be paid by him for delay in filing the TCS return?

In case of Non-Government deductor, the due date of filing the TCS return for the first quarter of the year 2025-26 i.e. April 2025 to June 2025 is 15th July, 2025. The return is filed on 4th August, 2025, thus there is a delay of 20 days as computed below:

*Particulars*	*Days*
July 2025	16
August 2025	4
Total	20

From the above computation it can be observed that there is a delay of 20 days. Late filing fees under section 234E will be charged at Rs. 200 per day, thus for 20 days the late filing fees will come to Rs. 4,000.

Illustration

The quarterly statement of tax collected at source i.e. TCS return for the second quarter of the year 2025-26 is filed by Mr. Raja on 4-12-2025. Tax collected at source during the quarter amounted to Rs. 2,520. What will be the amount of late filing fees to be paid by him for delay in filing the TCS return?

The due date of filing the TCS return for the second quarter of the year 2025-26 i.e. July 2025 to September 2025 is 15th October, 2025. The return is filed on 4th December, 2025, thus there is a delay of 50 days as computed below:

*Particulars*	*Days*
October 2025	16
November 2025	30
December 2025	4
Total	50

From the above computation it can be observed that there is a delay of 50 days. Late filing fees under section 234E will be charged at Rs. 200 per day, thus for 50 days the late filing fees will come to Rs. 10,000. However, the late filing fees cannot exceed the amount of tax collected at source. TCS during the quarter amounts to Rs. 2,520 and hence, late filing fees shall be Rs. 2,520.

Illustration

The quarterly statement of Tax deducted at source i.e. TDS return for the last quarter of the year 2025-26 is not filed by Mr. Raj till 31st May, 2026. Can he file the TDS return of last quarter of the year 2025-26 after 31st May, 2026 without payment of any late filing fees?

The due date of filing the TDS return for the last quarter of the year 2025-26 i.e. January 2026 to March 2026 is 31st May, 2026. The return is not filed till 31st May, 2026 and hence late filing fees under section 234E of Rs. 200 per day of default will be levied. TDS return cannot be filed without payment of late filing fees as discussed above. In other words, the late filing fees shall be deposited before filing the TDS return. Hence, in this case, Mr. Raj cannot file the TDS return without payment of late filing fees of Rs. 200 per day.

Computation of fee under Section 234E at the time of processing of TDS/TCS statement

Section 200A of the Income-tax Act provides for processing of TDS statements for determining the amount payable or refundable to the deductor. Provisions of Section 200A has been amended by the Finance Act, 2015 so as to enable computation of fee payable under section 234E at the time of processing of TDS statements.

As the mechanism of TCS statement is similar to TDS statement, a new section 206CB has been inserted by Finance Act, 2015 to provide for processing of TCS statements on the lines of existing provisions for processing of TDS statement contained in section 200A of the Income-Tax Act. The new section 206CB also provides for mechanism for computation of fee payable under section 234E at the time of processing of TCS statement.

Penalty under section 271H

As per section 271H, where a person fails to file the statement of tax deducted/collect at source i.e. TDS/TCS return on or before the due dates prescribed in this regard, then assessing officer may direct such person to pay penalty under section 271H. Minimum penalty can be levied of Rs. 10,000 which can go upto Rs. 1,00,000. Penalty under section 271H will be in addition to late filing fees prescribed under section 234E.

Apart from delay in filing of TDS/TCS return, section 271H also covers cases of filing incorrect TDS/TCS return. Penalty under section 271H can also be levied if the deductor/collector files an incorrect TDS/TCS return. In other words, minimum penalty of Rs. 10,000 and maximum penalty of upto Rs. 1,00,000 can be levied if the deductor/collector files an incorrect TDS/TCS return.

No penalty will be levied under section 271H for the failure to file the TDS/TCS return, if the person proves that after paying tax deducted/collected by him, along with the late- filing fee and interest (if any), to the credit of the Central Government, he had filed the TDS/TCS return before the expiry of a period of one year (see note) from the due date of filing the TDS/TCS return.

Note: The limitation period of one year has been reduced to one month with effect from Assessment Year 2025-26.

In other words, with effect from Assessment Year 2025-26, no penalty under section 271H will be levied in case of delay in filing the TDS/TCS return if following conditions are satisfied:

The tax deducted/collected at source is paid to the credit of the Government.
Late filing fees and interest (if any) is paid to the credit of the Government.
The TDS/TCD return is filed before the expiry of a period of one month from the due date specified in this behalf.

It should be noted that the above relaxation is applicable only in case of penalty levied under section 271H for delay in filing the TDS/TCS return and not in case of filing incorrect TDS/TCS statement.

Apart from above relaxation, in following two cases the taxpayer can get relief from penalty under section 271H:

Under section 273A(4)the Principal Commissioner of Income-tax or Commissioner of Income-tax has power to waive or reduce the penalty levied under the Income-tax Act. Penalty can be waived or reduced by the Commissioner of Income-tax if the conditions specified in section 273A(4)in this regard are satisfied.
Apart from shelter of section 273A(4), section 273Balso provides immunity from penalty in genuine cases. As per section 273B, penalty under section 271Hwill not be levied if the taxpayer proves that there was a reasonable cause for failure.

Illustration

The quarterly statement of tax deducted at source i.e. TDS return for the first quarter of the year 2025-26 is filed by Mr. Krunal on 10-8-2025. Tax deducted at source during the quarter amounted to Rs. 84,000. Before filing the TDS return he has paid the TDS, interest and late filing fees to the credit of the Government. Will he be liable to penalty under section 271H for delay in filing the TDS return?

Penalty under section 271H can be levied for delay in filing the TDS return. In this case, the due date of filing the TDS return for the first quarter of the year 2025-26 i.e. April 2025 to June 2025 is 31st July, 2025. The return is filed on 10th August, 2025, thus there is a delay of 10 days (i.e. less than a month). As per section 271H(3) no penalty under section 271H will be levied in case of delay in filing the TDS/TCS return if following conditions are satisfied :

The tax deducted/collected at source is paid to the credit of the Government.
Late filing fees and interest (if any) is paid to the credit of the Government.
The TDS/TCD return is filed before the expiry of a period of one month from the due date specified in this behalf.

In the present case, all the aforesaid conditions are satisfied because the delay in filing the TDS return is of less than 1 month and interest and late filing fees are paid before filing the TDS return, thus penalty under section 271H will not be levied.

The same provision as discussed above will apply in case of delay in filing the statement of tax collected at source i.e. TCS return.

Illustration

The quarterly statement of tax deducted at source i.e. TDS return for the first quarter of the year 2025-26 is filed by Mr. Rahul on 20-9-2025. Tax deducted at source during the quarter amounted to Rs. 1,84,000. Before filing the TDS return he has paid the TDS, interest and late filing fees to the credit of the Government. Will he be liable to penalty under section 271H for delay in filing the TDS return?

Penalty under section 271H can be levied for delay in filing the TDS return. The due date of filing the TDS return for the first quarter of the year 2025-26 i.e. April 2025 to June 2025 is 31st July, 2025. The return is filed on 20th September, 2024, thus there is a delay of 51 days (i.e. more than a month). As per section 271H(3) no penalty under section 271H will be levied in case of delay in filing the TDS/TCS return if following conditions are satisfied :

The tax deducted/collected at source is paid to the credit of the Government.
Late filing fees and interest (if any) is paid to the credit of the Government.
The TDS/TCD return is filed before the expiry of a period of one month from the due date specified in this behalf.

In the above case, the delay is of more than 1 month and hence the above immunity will not be available. Thus, the Assessing Officer can levy penalty under section 271H. Minimum penalty of Rs. 10,000 and maximum penalty of Rs. 1,00,000 can be levied by the Assessing Officer. However, Mr. Rahul has following two remedies to get relief from penalty:

He can apply to Principal Commissioner of Income-tax or Commissioner of Income-tax under section 273A(4)to seek relief from penalty.
He can seek relief under section 273Bby proving that there was a reasonable cause for failure.

The same provision as discussed above will apply in case of delay in filing the statement of tax collected at source i.e. TCS return.

Illustration

The quarterly statement of tax deducted at source i.e. TDS return for the first quarter of the year 2025-26 is filed by Mr. Sharma on 10-7-2025. The particulars of the tax deducted at source as mentioned in TDS return are incorrect. Will he be liable to pay penalty under section 271H for delay in filing the TDS return and for furnishing the inaccurate particulars in the return?

Penalty under section 271H can be levied for following defaults:

(1) Delay in filing the TDS/TCS quarterly statement i.e. TDS/TCS quarterly return.

(2) Furnishing incorrect TDS/TCS quarterly statement i.e. TDS/TCS quarterly return.

In the present case Mr. Sharma has filed an incorrect TDS return and hence he shall be held liable to pay penalty under section 271H. Minimum penalty of Rs. 10,000 and maximum penalty of up to Rs. 1,00,000 can be levied. Mr. Sharma will have no remedy under Section 271H(3) to claim relief from penalty for furnishing of inaccurate particulars in the return. However, the taxpayer can seek relief in the following way:

He can apply to Principal Commissioner of Income-tax or Commissioner of Income-tax under section 273A(4)to grant relief from penalty.
He can seek relief under section 273Bby proving that there was a reasonable cause for failure.

The same provision as discussed above will apply in case of delay in filing the statement of tax collected at source i.e. TCS return.

MCQ ON LATE FILING FEES AND PENALTY FOR FAILURE TO FURNISH/DELAY IN FURNISHING THE TDS/TCS STATEMENTS

Q1. As per section __________, a person who fails to file the TDS/TCS return on or before the due date prescribed in this regard is liable to pay a specific amount as late filing fees.

(a) 234E (b) 271C

Correct answer : (a)

Justification of correct answer :

As per section 234E, a person who fails to file the TDS/TCS return on or before the due date prescribed in this regard is liable to pay a specific amount as late filing fees.

Thus, option (a) is the correct option.

Q2. As per section 234E, late filing fees will be levied at Rs. 200 for every day during which the failure continues. However, the amount of late filing fees shall not exceed the amount of TDS/TCS.

(a) True (b) False

Correct answer : (a)

Justification of correct answer :

Thus, the statement given in the question is true and hence, option (a) is the correct option.

Q3. TDS/TCS return can be filed without payment of late filing fees.

(a) True (b) False

Correct answer : (b)

Justification of correct answer :

TDS/TCS return cannot be filed without payment of late filing fees. In other words, the late filing fees shall be deposited before filing the TDS/TCS return.

Thus, the statement given in the question is false and hence, option (b) is the correct option.

Q4. If a person fails to file the statement of tax deducted/collect at source i.e. TDS/TCS return on or before the due dates prescribed in this regard, then he can be held liable to pay penalty under section _______.

(a) 234A (b) 271C

Correct answer : (c)

Justification of correct answer :

As per section 271H, where a person fails to file the statement of tax deducted/collect at source i.e. TDS/TCS return on or before the due dates prescribed in this regard, then he can be held liable to pay penalty under section 271H.

Thus, option (c) is the correct option.

Q5. As per section 271H, minimum penalty can be levied of __________ which can go upto __________.

(a) Rs. 5,000, Rs. 10,000 (b) Rs. 10,000, Rs. 20,000

Correct answer : (d)

Justification of correct answer :

As per section 271H, minimum penalty can be levied of Rs. 10,000 which can go upto Rs. 1,00,000.

Thus, option (d) is the correct option.

Q6. If a person pays late filing fees as per section 234E, then he cannot be held liable to pay penalty under section 271H.

(a) True (b) False

Correct answer : (b)

Justification of correct answer :

Penalty under section 271H will be in addition to late filing fees prescribed under section 234E. In other words, where a person fails to file the statement of tax deducted/collect at source i.e. TDS/TCS return on or before the due dates prescribed in this regard, then he can be held liable to pay late fees as per section 234E as well as to pay penalty under section 271H.

Thus, the statement given in the question is false and hence, option (b) is the correct option.

Q7. Apart from delay in filing of TDS/TCS return, section 271H also covers cases of ______.

(a) Failure to deduct tax at source

(b) Failure to collect tax at source

(d) Failure to comply with the provisions of section 269T

Correct answer : (c)

Justification of correct answer :

Apart from delay in filing of TDS/TCS return, section 271H also covers cases of filing incorrect TDS/TCS return. In other words, minimum penalty of Rs. 10,000 and maximum penalty of upto Rs. 1,00,000 can be levied if the deductor/collector does not file a TDS/TCS return or files an incorrect TDS/TCS return.

Thus, option (c) is the correct option.

Q8. No penalty will be levied under section 271H for the failure to file the TDS/TCS return, if the person proves that after paying tax deducted/collected by him, along with the fee and interest (if any), to the credit of the Central Government, he had filed the TDS/TCS return before the expiry of a period of __________ from the due date of filing the TDS/TCS return __________.

(a) 6 months (b) 1 month

Correct answer : (b)

Justification of correct answer :

No penalty will be levied under section 271H for the failure to file the TDS/TCS return, if the person proves that after paying tax deducted/collected by him, along with the fee and interest (if any), to the credit of the Central Government, he had filed the TDS/TCS return before the expiry of a period of one month from the due date of filing the TDS/TCS return.

Thus, option (b) is the correct option.

Q9. Under section __________ the Principal Commissioner of Income-tax or Commissioner of Income-tax has power to waive or reduce the penalty levied under the Income-tax Act.

(a) 273A(4)(b) 273B

Correct answer : (a)

Justification of correct answer :

Under section 273A(4) the Principal Commissioner of Income-tax or Commissioner of Income-tax has power to waive or reduce the penalty levied under the Income-tax Act. Penalty can be waived or reduced by the Commissioner of Income-tax if the conditions specified in section 273A(4) in this regard are satisfied.

Thus, option (a) is the correct option.

Q10. As per section 273B, penalty under section 271H will not be levied if the taxpayer proves that there was a reasonable cause for failure.

(a) True (b) False

Correct answer : (a)

Justification of correct answer :

Apart from shelter of section 273A(4), section 273B also provides relief from penalty in genuine cases. As per section 273B, penalty under section 271H will not be levied if the taxpayer proves that there was a reasonable cause for failure.

Thus, the statement given in the question is true and hence, option (a) is the correct option.

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TCS mechanism under Section 206C of Income-tax Act, 1961

TCS Rates

Deposit of Tax Collected at Source (TCS)

Furnishing of TCS Statement

Credit of TCS

TCS Certificate

Consequences of Failure to Collect or Pay Tax Collected at Source (TCS)

Certificate for Collection of TCS at A Lower Rate

Requirement to Furnish PAN (For TCS)

Income Tax Rules

Rule – 31AA

Rule – 37C

Rule – 37CA

Rule – 37D

Rule – 37G

Rule – 37H

Rule – 37-I

Rule – 37J

Rule – 114A

Rule – 114-I

Rule – 119A

Income Tax Forms

Sr. No.

Sl. No in Part A where the relevant order is mentioned

Nature of proceeding for arbitration, conciliation or mediation, or notices thereof with case number or Notice given

Particulars (including the name of the country) where such proceeding for arbitration, conciliation or mediation are pending or notices thereof have been issued

Date of initiating the proceeding for arbitration, conciliation or mediation/issue of notice

Name of the agreement entered into by India under which the proceeding for arbitration, conciliation or mediation are pending

Status of the proceeding for arbitration, conciliation or mediation

Date of disposing of or withdrawal of such proceeding for arbitration, conciliation or mediation, or notices (Please attach evidence of such disposing of or withdrawal, including order of the Tribunal or court or other judicial or quasi-judicial or administrative authority).

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Sl. No. in Part A where the relevant order is mentioned

Nature of proceeding to enforce such award, order or judgment or any other relief

Particulars (including the name of the country where such proceeding to enforce any award, order or judgment or any other relief are taking place)

Date of filing proceeding to enforce any award, order or judgment or any other relief

Nature of such award, order or judgment or any other relief (Attach copy thereof)

Status of the proceeding to enforce such award, order or judgment or any other relief

Date of disposing of or withdrawal of proceeding to enforce such award, order or judgment or any other relief (Please attach a copy of evidence of such disposing of/withdrawal, including order of the Court or other judicial authority)

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Sl. No. in Part MA where the relevant order is mentioned

Nature of proceeding for arbitration, conciliation or mediation, or notices thereof with case number or Notice given

Particulars (including the name of the country where such proceeding for arbitration, conciliation or mediation are pending or notices thereof have been issued)

Date of initiating the proceeding for arbitration, conciliation or mediation/issue of notice

Name of the agreement entered into by India under which the proceeding for arbitration, conciliation or mediation are pending

Status of the proceeding for arbitration, conciliation or mediation

Date of disposing of or withdrawal of such proceeding for arbitration, conciliation or mediation, or notices (Please attach evidence of such disposing or withdrawal, including order of the Tribunal or court or other judicial or quasi-judicial or administrative authority)

(1)

(2)

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(8)

Sl. No.

Sl. No. in Part MA where the relevant order is mentioned

Nature of proceeding for arbitration, conciliation or mediation, or notices thereof with case number or Notice given

Particulars (including the name of the country where such proceeding for arbitration, conciliation or mediation are pending or notices thereof have been issued)

Date of initiating the proceeding for arbitration, conciliation or mediation/issue of notice

Name of the agreement entered into by India under which the proceeding for arbitration, conciliation or mediation are pending

Status of the proceeding for arbitration, conciliation or mediation

(1)

(2)

Sl. No in Part A where the
relevant
order is mentioned

Nature of proceeding for arbitration,
conciliation or mediation, or notices
thereof with
case number or Notice given

Particulars (including the name of the country) where such proceeding for
arbitration,
conciliation or
mediation are
pending or
notices thereof
have been
issued

Date of initiating the proceeding for arbitration, conciliation or
mediation/issue of notice

Name of the agreement entered into
by India
under which the proceeding for arbitration, conciliation or mediation are pending

Status of the proceeding for arbitration,
conciliation or mediation

Date of disposing of or withdrawal of such proceeding
for arbitration,
conciliation or mediation, or
notices (Please
attach evidence of
such disposing of or withdrawal,
including order of
the Tribunal or court or other
judicial or
quasi-judicial or administrative
authority).

Assessment
Year or
Financial
year

Details of the
order under
consideration

Taxes or
Penalty
determined

Details of
the attachments
made by any Income-tax Authority

Section
and
sub-section
of the
Income-tax
Act, 1961

Date
of
order

Late filing fees and penalty for failure to furnish/delay in furnishing the TDS/TCS statements