TaxTMI 
TaxTMI 
Comparison of section 395 "Certificates." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)
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....Not stated in the document. Background & Scope Statutory hooks: the provision is part of the Chapter dealing with "Deduction and collection at source" in the Income Tax Bill, 2025. The clause provides a statutory mechanism for obtaining certificates from the Assessing Officer that alter the rate or quantum at which tax is deducted or collected at source. The clause contains five sub-sections that address (1) payee applications for lower deduction, (2) special procedure for payments to non-residents (proportionate determination), (3) applications by buyers/licensees/lessees for lower collection, (4) mandatory issuance of certificates by deductors/collectors (and employer-specific certificate requirements), and (5) cancellation of AO-issued....
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....ollection obligations. The recurring phrase "subject to the rules made under this Act" and "in such form and manner as prescribed" evidences that detailed procedure, forms, timelines and the content of certificates are intended to be governed by delegated legislation (rules/notifications). The AO's power is conditioned on satisfaction as to the payee's/collectee's income which implies an income-driven standard for relief. The Bill focuses on "lower" deduction/collection; it does not expressly contemplate "no deduction" relief in the operative phrase, which may inform a narrower interpretive approach unless clarified by rules. Exceptions/Provisos No explicit exceptions or provisos are set out besides the parenthetical exclusion....
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....392 and 393 appear elsewhere in the Chapter), but cross-references or procedural interlocks (appeal to AO, review, scope of AO's satisfaction, or relation to assessment proceedings) are Not stated in the document. The clause imposes obligations on persons responsible for deduction/collection that will operate in conjunction with other statutory provisions on tax payment, return filing and crediting; specifics of those interactions are Not stated in the document. Differences between Document 1 (Section 395 of the Income-tax Act, 2025) and Document 2 (Clause 395 of the Income Tax Bill, 2025 (Old Version)) * Document 1 (Act) expressly permits the payee to apply for "deduction of income-tax at a lower rate or no deduction of income-tax, ....
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....t a lower rate or no deduction of income-tax"; Document 2 states the AO is to be "satisfied that the total income of the payee justifies a lower deduction". * Practical impact: The Act text reiterates both lower rate and nil deduction as possible outcomes; the Bill text only contemplates a lower deduction. The practical standard of satisfaction is similar but the outcome set contemplated differs. * Sub-section (2) scope and wording differences: Document 1 sub-section (2)(a) refers to "any sum as mentioned in section 393(2) (Table: Sl. No. 17)"; Document 2 refers to "any sum chargeable under this Act (other than salary)". Document 1's (2)(a) includes prescribed form and manner "where he considers that the whole of such sum would not ....
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....f certificates (deductors/collectors and employers) to issue documentary certificates specifying amounts and rates within prescribed periods; accordingly, taxpayers should retain certificate copies, AO orders, correspondence, and records demonstrating reliance on certificates and corresponding withholding/collection actions. Specific retention periods and form content are Not stated in the document and are expected to be prescribed. Key Takeaways * Clause 395 establishes an AO-based certificate mechanism to vary withholding/collection rates where the AO is satisfied about the applicant's total income. * It provides a special procedure for payers to non-residents (excluding salary in the Bill) to determine the proportion of sums cha....