Lower tax deduction certificate depends on estimated liability, prior income records, and specified validity conditions.

A certificate for deduction of tax at a lower rate or no deduction of tax from income other than dividends may be issued where the applicant's existing and estimated tax liability justifies it. The Assessing Officer considers estimated current income, past four years' income, existing liabilities, and advance tax together with tax deducted at source and tax collected at source. The certificate is valid for the specified period, is ordinarily issued to the deductor, and may in specified cases be issued to the applicant. It applies only to the person named in it.

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