Tax withholding certificates permit lower, nil, or proportionate deduction and lower collection where prescribed income conditions are met.

Section 395 provides certificates for lower or nil tax deduction, lower tax collection, and determination of the taxable portion of specified non-resident payments. Certificates are issued where estimated income justifies the relevant treatment and bind the payer or collector until expiry. Payers may seek determination of the chargeable proportion of a non-resident payment, with deduction limited to that portion. Deductors and collectors must issue prescribed TDS/TCS certificates, and lower-rate certificates may be cancelled after an opportunity of being heard.

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