Draft Income Tax Rule 201, 202, 203 – Certification of Advance Rulings u/s 384(8); High Court Appeal Procedure u/s 389(1); Credit for TDS/TCS
Rules 201, 202, and 203 of the Draft Income-tax Rules, 2026 prescribe procedures relating to advance rulings and credit for tax deducted or collected at source. Rule 201 provides that copies of advance rulings pronounced by the Board for Advance Rulings under section 384(8) must be certified as true copies by the Commissioner, Deputy Commissioner, or the Board, as applicable, before being sent to the applicant and the jurisdictional Commissioner. Rule 202 states that appeals to the High Court under section 389(1) against rulings or orders of the Board for Advance Rulings shall follow the same form and manner as prescribed by the jurisdictional High Court for filing such appeals. Rule 203 lays down a comprehensive framework for granting credit of TDS and TCS based on information furnished by the deductor or collector. Credit is generally granted to the deductee or collectee; however, where a declaration is filed stating that the income is assessable in another person’s hands, credit shall be given to such other person, subject to prescribed reporting and documentation requirements. Certificates must be issued accordingly and maintained in safe custody. Credit is allowed in the tax year in which the related income is assessable and proportionately where income spans multiple years. Special provisions apply for specified sections, and credit is granted based on furnished information and return claims, subject to verification under the Board’s risk management strategy.
Extract of Rule No. 201, 202, 203 of Draft Income-tax Rules, 2026
Rule 201
Certification of copies of the advance rulings pronounced by the Board for Advance Rulings under section 384(8) of the Act.
The copy of the advance ruling pronounced by the Board to be sent to the applicant and to the Commissioner having jurisdiction over his case, shall be certified to be true copy thereof by the Commissioner or Deputy Commissioner or Board for Advance Rulings, as the case may be.
Rule 202
Form and manner of filing appeal to the High Court on ruling pronounced or order passed by the Board for Advance Rulings under section 389(1) of the Act.
The form and manner of filing appeal to the High Court under section 389(1) of the Act against a ruling pronounced or order passed by the Board for Advance Rulings by the assessee, or the Assessing Officer on the directions of the Commissioner, shall be the same as provided in the applicable procedure laid down by the jurisdictional High Court for filing an appeal to the High Court.
Rule 203
Credit for tax deducted or collected at source
(1) Credit for tax deducted at source or tax collected at source shall be given, on the basis of information relating to deduction or collection of tax furnished by the deductor or collector, to the income-tax authority or the person authorized by such authority, in the following manner– –
(a) tax deducted at source and paid to the Central Government under the provisions of Chapter XIX, shall be given to the person to whom payment has been made or whose account has been credited (hereinafter referred to as deductee);
(b) tax collected at source and paid to the Central Government under the provisions of Chapter XIX, shall be given to the person from whom tax has been collected or whose account has been debited (hereinafter referred to as collectee),
(2) Where the deductee or collectee files a declaration with the deductor or collector that the whole or any part of the income on which tax has been deducted or collected at source is assessable in the hands of a person other than the deductee or collectee,–
(a) the deductor or collector shall report the tax deduction or collection in the name of the other person in the information relating to deduction or collection of tax referred to in sub-rule (1); and
(b) accordingly credit for such tax deducted or collected at source, as the case may be, shall be given to the other person and not to the deductee or collectee.
(3) The declaration filed by the deductee or collectee under sub-rule (2) shall contain the name, address, permanent account number of the other person to whom credit is to be given, details of payment or credit in relation to which credit is to be given and reasons for giving credit to such person and such declaration shall be kept in safe custody by the deductor or collector.
(4) The deductor or collector shall issue the certificate for deduction or collection of tax at source to the person in whose name credit is shown in the information relating to deduction or collection of tax referred to in sub-rule (1) and shall keep the deduction in his safe custody.
(5) Credit for tax deducted or collected at source and paid to the Central Government, shall be given for tax year for which income corresponding to such tax is assessable.
(6) Where tax has been deducted or collected at source and paid to the Central Government and the income corresponding to such tax is assessable over a number of years, credit for tax deducted or collected at source shall be allowed across those years in the same proportion in which the income is assessable to tax.
(7) Irrespective of anything contained in sub-rule (1) to (6), for the purposes of Section 393 (3) [Table: Sl. No. 5] and section 394(1) [Table: Sl. No. 6, 7 and 8], credit for tax so deducted or collected at source shall be given to the person from whose account tax is deducted or collected, as the case may be and paid to the Central Government account for the tax year in which such tax deduction or collection is made.
(8) Credit for tax deducted or collected at source and paid to the account of the Central Government shall be granted on the basis of the information referred in sub-rule (1) and 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.
