Validity of Certificate issued under section 197

Issue/Justification

The Certificate under section 197 is at present issued with a validity date from the date of issue. Though the assessee is applying in the month of April, i.e., at the beginning of the financial year, the certificate is issued much later. The date of issue is taken as the validity date owing to which, the deductors are deducting the tax for the earlier part of income/payments. By any reasonable estimate, an assessee cannot have taxable income for some part of the financial year and exempt income for remaining part of the year.

Suggestion

It is suggested that

a) the certificate should be issued / application should be decided at least before 15th June of the financial year i.e. within three months of commencement of the financial year before planning for advance tax.

b) Such application should be disposed off within 30 days.

(SUGGESTIONS FOR RATIONALIZATION OF THE PROVISIONS OF DIRECT TAX LAWS)

Source-  ICAI Pre-Budget Memorandum–2018 (Direct Taxes and International Tax)

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Category : Income Tax (27624)
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Tags : Budget (1957) Budget 2018 (400) ICAI (2628)

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