1. Lower deduction/non-deduction of tax
(a) Section 197 : – Section 197 gives a right to the assessee to obtain a certificate from the Assessing Officer that tax may be deducted at a lower rate than prescribed in Sections 192,193,194,194A,194C,194D,194G,194H,194I, 194J, 194K, 194LA, and 195, by making an application. He can even apply for no deduction of income- tax at source. Income-tax rules have prescribed Form No. 13, under Rule 28 for such application.
(b) Section 197A : – Section 197A provides that no deduction of income-tax at source is to made u/s 194 or194EE in case of an individual resident of India if the individual gives the declaration to the person responsible for paying the income covered by these sections in duplicate in prescribed proforma and verified showing that the tax, on his estimated total income of the year, including the income from which tax is to be deducted will be nil. Form No. 15G under Rule 29C has been prescribed for such application.
(c) Section 197A(1A) : – Similarly, for sections 193, 194A and Section 194K, exemption u/s 1 97A, from deduction of tax, can be obtained by any person (except a company or a firm ) on furnishing a declaration in duplicate and in prescribed proforma in a similar manner. Similarly for sections 193, 194 ,194A, 194EE or 194K, exemption from TDS u/s 1 97A can be obtained by an individual resident in India who is of age of 65 years or more during the previous year.
(d) Section 197A(1 B) : – The provisions of this section shall not apply when the gross total income of the assessee from all sources exceeds the maximum amount which is not chargeable to Income Tax.
The person responsible for paying the income without deduction of tax is duty-bound to deliver to the Chief Commissioner of Income-tax or Commissioner of Income-tax, one copy of such declaration before the 7th day of month following the month in which the declaration has been furnished to the payer by payee (i.e. Assessee).
2. Interest to Government etc. –Interest or dividend or any other sum payable to the Government, or Reserve Bank of India or a Corporation established under a Central Act, or a Mutual Fund specified u/s 10(23D), payable to it by way of interest or dividend in respect of securities or shares owned by it or any other income accruing to it, is not subject to deduction of tax at source (S.196).