CBDT issues procedure for application of Income Tax Deduction Certificate via TRACES

The Central Board of Direct Taxes(CBDT) has issued procedure for application of Income Tax Deduction Certificate via TRACES via issuing Notification.

As per sub-section (I) of section 197 of the Income-tax Act, 1961(the Act), where, in the case of any income of any person or sum payable to any person, income-tax is required to be deducted at the time of credit or, as the case may be, at the time of payment at the rates in force under the provisions of sections 192,193,194, 194A, 194C, 1940, 194G, 194H, 194-1, 194J, 194K, 194LA, [194L8A]’ 194L88, 194L8C, 194M, 194-0 and 195, if the Assessing Officer is satisfied that the total income of the recipient justifies the deduction of income-tax at any lower rates or no deduction of income-tax, as the case may be, the Assessing Officer shall, on an application made by the assessee in this behalf, give to him such certificate as may be appropriate.

Rule 28 of the Income-tax Rules, 1962 provides for filing an application for grant of certificate for Income tax deduction at any lower rate or no deduction of Income-tax under sub-section (I) of section 197 of the Act to be made in Form No. 13 electronically in accordance with the procedures, formats and standards for ensuring secure capture and transmission of data and uploading of documents to be laid down by the Principal Director General of Income-tax (Systems).

Proviso to sub-rule (4) of Rule 28AA of the Income Tax Rules, 1962, provides for issuance of certificate for deduction of tax at lower rate, to the person making such application authorizing him to receive income or sum after deduction of tax at lower rate, in cases, where the number of persons responsible for deducting the tax is likely to exceed one hundred and the details of such persons are not available at the time of making application with the person making such application, Sub-rule (6) of Rule 28AA of the Income-tax Rules, 1962, empowers the Director General of Income-tax (Systems) to lay down procedures, formats and standards for issuance of certificates under proviso to sub-rule (4) of Rule 28AA of the Income Tax Rules, 1962.

In exercise of the powers conferred under sub-rule (2) of Rule 28 & subrule (6) of 28AA of the Income-tax Rules, 1962, the Director General of Income-tax (Systems) hereby specifies the procedure, format and standards for the purpose of electronic filing of Form 13 with Annexure – II and generation of certificate under sub-section (1) of section 197 r.w. proviso to sub-rule(4) of Rule 28AA of Income Tax Rules, 1962 through TRACES as per procedure in the succeeding paragraphs which will be applicable from 01.10,2023,

Procedure for electronic filling of Form 13 with annexure-II shall be as follows:

For making an application in Form 13 with Annexure II the taxpayer/ Deductee shall login into the TRACES website for grant of certificate for deduction of Income-tax at any lower rate or no deduction of Income-tax under sub-section (1) of Section 197 of the Income-tax Act, 1961.

The taxpayer/ Deductee who is not registered at TRACES website shall have to first register with his Permanent Account Number (“PAW) at TRACES for login and filling application in Form 13 along with Annexure II.

The tax-payer/Deductee shall login at TRACES website and submit the Form No. 13 along with Annexure II with supporting documents using any of the following,

(i) Digital Signature,
(ii) Electronic Verification Code,
(iii) Aadhar based Authentication,
(iv) Mobile OTP.

Applicants accessing TRACES website from outside of India shall login at TRACES website and submit application in Form No. 13 along with supporting documents using Digital Signature only.

The applicant can track the status of the application through option ‘Track Request for Form 13/ ISC/ ISD’ under the tab Statements/Forms’.

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