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Mandatory u/s. 197 ?

CA Shyamal Mistry (M.Com, A.C.A.) (128 Points)

04 October 2012

Dear friends,

In the lower deduction certificate U/S. 197, which we receive, is it mandatory to deduct TDS at such lower rate, or we can deduct as per the rates mentioned in the Act?

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MD (AAA) (117 Points)
Replied 04 October 2012

As per the provisions of section 197(2) of the Act, where any certificate for deduction at lower rates or a no deduction of income tax is given u/s 197(1), the person responsible for paying the income shall, until such certificate is cancelled by the Assessing Officer, deduct income tax at the rates specified in such certificate or deduct no tax, as the case may be. In view of the aforesaid provisions, it is mandatory for the deductor to comply with the aforesaid certificate direction.