Section 395 — Certificates

(1) Where tax is required to be deducted on any income or sum under this
Chapter, then subject to the rules made under this Act,—
( a) the payee may make an application before the Assessing Officer for
deduction of income-tax at a lower rate or no deduction of income-tax,
as the case may be; and
( b) the Assessing Officer on being satisfied that the total income of the
payee justifies deduction of income-tax at a lower rate or no deduction
of income-tax, as the case may be, shall issue to him a certificate as
appropriate; and
90[(c) when a certificate is issued under clause (b) or sub-section (6), as the case
may be, the person responsible for paying the income or sum shall deduct
the tax at the rate specified in such certificate, or deduct no income-tax, as
the case may be, till its validity.]
(2)(a) The person responsible for paying to a non-resident any sum as mentioned in
section 393(2) (Table: Sl. No. 17), may make an application to the Assessing Officer
in such form and manner as may be prescribed, where he considers that the whole
of such sum would not be chargeable in the case of the recipient;
(b) the application under clause ( a) shall be for determination of the appropriate
proportion of the sum chargeable to tax, by the Assessing Officer in the manner as
may be prescribed; and
91. Inserted by the Finance Act, 2026, w.e.f. 1-4-2026.
(c) when the determination is made by the Assessing Officer as per clause (b), the tax
shall be deducted under section 393(2) (Table: Sl. No. 17) only on that proportion
of sum which is chargeable to tax under the Act.
(3) Where tax is required to be collected on any amount under this Chapter, then
subject to the rules made under this Act,—
( a) the buyer or licensee or lessee may make an application before the
Assessing Officer for collection of tax at a lower rate;
( b) the Assessing Officer on being satisfied that the total income of the buyer
or licensee or lessee justifies collection of tax at a lower rate, shall issue
to him a certificate as may be appropriate; and
( c) when a certificate is issued under clause (b), the person responsible for
collecting tax shall collect it at the rates specified in such certificate till
its validity.
(4)(a) Every person deducting or collecting tax shall issue a certificate to the
deductee or collectee, as the case may be, specifying—
( i) the amount of tax that has been deducted or collected;
( ii) the rate at which tax has been deducted or collected; and
( iii) any other particulars, as may be prescribed,
within such period as may be prescribed;
(b) an employer referred to in section 392(2)( a) shall issue a certificate to the
employee, in respect of whose income payment of tax has been made by the
employer, that the tax has been paid to the Central Government, and specify—
( i) the amount of tax so paid;
( ii) the rate at which tax has been paid; and
( iii) any other particulars, as may be prescribed,
within such period, as may be prescribed.
(5) The Assessing Officer may cancel the certificate granted under sub-section (1)
or (3) after giving reasonable opportunity to the applicant.
91[(6) The application referred to in sub-section (1)( a) may also be filed before the
prescribed income-tax authority, subject to such conditions as may be prescribed,
and such authority on electronic verification of the contents of the application, may—
( a) either issue a certificate for deduction of income-tax at lower rate or no
deduction of income-tax; or
( b) reject such application on account of non-fulfilment of the prescribed
conditions or on account of the application being incomplete.]