Income-tax Act, 1961Section 197
- Payee applies to the AO for lower/nil deduction certificate
- Available only for specified TDS sections
- Deductor applies the certified rate during validity
Applies to FY 2025-26 (AY 2026-27) and earlier years.
IT Act 1961 → 2025 / Section 197
TDSSection 197 → Section 395
Certificate for lower or nil TDS
Section 197 of the old Income-tax Act, 1961 · new section 395 under the Income-tax Act, 2025
New reference Section 395(1) (lower deduction certificate)
Income-tax Act, 2025Section 395(1) (lower deduction certificate)
- Section 395(1): available for all TDS provisions
- From 1 April 2026, application may also be filed with a prescribed authority for automated issue (395(6), Finance Act 2026)
- Lower TCS certificate: section 395(3)
Applies from tax year 2026-27 (from 1 April 2026).
What changed
Renumbered and widened; the Finance Act 2026 added an automated route for certificates.
Practice notes
- Form numbers for the application changed with the new Rules.
Frequently asked
What is section 197 called in the new Income Tax Act 2025?
Section 395(1): certificate for lower or nil TDS, now available for all TDS provisions.
What is section 197 called in the new Income-tax Act, 2025?
Section 197 of the Income-tax Act, 1961 corresponds to Section 395(1) (lower deduction certificate) of the Income-tax Act, 2025, which applies from 1 April 2026 (tax year 2026-27).
What changed in section 197 under the new Income Tax Act?
Renumbered and widened; the Finance Act 2026 added an automated route for certificates.
Is section 197 still applicable for FY 2025-26?
Yes. Income of FY 2025-26 (AY 2026-27) and earlier years is governed by section 197 of the 1961 Act. Section 395(1) (lower deduction certificate) of the 2025 Act applies from tax year 2026-27.