clarification on section 197 of incometax

[Guest]

sir,

                   We are engaging the services of Sulabh International Social Service Organisation for sanitation and maitainance of public toilets in our Municipal Corporation on  monthly payment of Rs 8000=00 per month per each toilet for which we are deductiong TDS as applicable.

                   But the Sulabh Organisation have furnished a Certificate under section 197(1) of the Income Tax Act, 1961.in which the Assessing Officer ,New ACIT/DCIT TDS circle , Patna has mentioned as follows.' the deductors with the TAN i,e our Municipal Corporation is herby authorised to make payment or credit the amount of the nature to the extent of Rs 672000=00 after deduction 0% TDS to, or as the case may be to the account of Sulabh International Social Sevice Organisation,Patna over whom I have jurisdiction to issue this certificate' The certificate is non - transferable and valid for the period from 24.07.2012 to 31.03.2013 unless it is cancelled by me under intimation to the respective TAN before that date.

                  I would like to know whether to accept this certificate on its own or to seek clarification from the IncomeTax authorities.

Thanking you sir,

Yours sincerely

chakravarthy s.n.

[DR.MARIAPPAN GOVINDARAJAN]

Whether you have got clarified in the said issue? If not please inform

AI Summary

Section 197 certificate authorises nil TDS on specified payments; deductor questions reliance or need for further clarification. A TDS certificate issued under section 197 authorises the municipal corporation (by TAN) to make payments to the service provider at nil TDS up to a specified aggregate amount for a defined period; the certificate is non-transferable, subject to cancellation by the assessing officer, and the deductor queries whether it may be relied on without further clarification from tax authorities.