Blitz Bureau
NEW DELHI: The Income Tax Department is framing rules to implement a Budget 2026-27 provision that will allow taxpayers to electronically apply for deduction of tax at source (TDS) certificates at lower rates, the Government informed Parliament on August 10.
In a written reply to the Lok Sabha, Union MoS for Finance Pankaj Choudhary said Section 395(1) of the Income-tax Act, 2025 provides for issuance of certificates for deduction of tax at source at nil or lower rates.
The minister said the Finance Act, 2026 has enabled taxpayers to electronically file applications for issuance of such certificates, with the certificates to be issued or applications rejected subject to conditions that will be prescribed.
“…the enabling rule is currently under preparation and shall be notified in due course,” he said.
A taxpayer generally seeks a lower or nil TDS certificate when the expected tax liability is lower than the amount that would otherwise be deducted at source.
The facility is aimed at preventing excess tax deductions and reducing the need for taxpayers to claim refunds later.
Under the proposed system, taxpayers will be able to apply electronically to the tax authority for a lower or nil TDS certificate.
The application is expected to be processed using information already available with the Income Tax Department, including previously filed tax returns, Annual Information Statement (AIS), Taxpayer Information Summary (TIS) and Form 26AS.
