Tax withholding certificates permit lower or nil deductions, proportionate nonresident taxation, lower collection, and prescribed compliance.

Section 395 consolidates certificates for lower or nil tax deduction, determination of the chargeable portion of specified non-resident payments, lower-rate tax collection, and TDS or TCS certificate issuance. A payee may obtain a lower or nil deduction certificate where estimated income justifies it, while a payer may seek determination of the chargeable proportion of a non-resident payment. Lower-rate collection certificates may be issued to buyers, licensees and lessees. Specified certificates may be cancelled after an opportunity of being heard, and lower or nil deduction applications may be made electronically.

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