CHAPTER XVII — COLLECTION AND RECOVERY OF TAX · B.—DEDUCTION AT SOURCE
CHAPTER XVII — COLLECTION AND RECOVERY OF TAX · B.—DEDUCTION AT SOURCE
Section 197A — No Deduction in Certain Cases (Forms 15G and 15H)
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Status: Live. A beneficial self-declaration provision; mechanical.
Finance Act, 2026: No amendment.
Mechanism: On a valid Form 15G/15H declaration of nil tax liability, the payer makes no deduction from the specified incomes, without need of a section 197 certificate.
Litigation profile: None. A mechanical, beneficial provision — the candour rule applies.
A. SECTION COMMENTARY
Section 197A enables a recipient of certain income to obtain non-deduction by self-declaration, without resort to the Assessing Officer. Where a resident furnishes to the payer a declaration in the prescribed form (Form 15G, or Form 15H for senior citizens) to the effect that the tax on his estimated total income for the year will be nil, no deduction is to be made from the specified incomes (broadly, interest and certain other payments enumerated in the section). The provision relieves small taxpayers — typically those below the taxable threshold living on interest income — from suffering deduction and then claiming a refund.
Scope, conditions and the senior-citizen route
The declaration mechanism is confined to the incomes specified in the section and is subject to conditions (in particular, for Form 15G, that the aggregate income does not exceed the basic exemption limit, a condition relaxed for the Form 15H senior-citizen declaration which turns on a nil tax liability). The payer who acts on a valid declaration is not required to deduct; a false declaration exposes the declarant to consequences, and the payer remains obliged to furnish the declarations to the tax administration.
A mechanical, beneficial provision — candour
Section 197A is mechanical and beneficial and is rarely litigated on its own terms. In candour, there is no developed body of merits authority; the provision is applied from its terms and the prescribed forms, with the general default consequences applying where a deduction that ought to have been made (in the absence of a valid declaration) is omitted.
B. STATUTORY POSITION (verbatim text)
Reproduced from the Income-tax Act, 1961 as amended up to the Finance Act, 2025 (the Finance Act, 2026 makes no amendment to this section). Editorial markers “***” denote text omitted by the Legislature.
197A. (1) Notwithstanding anything contained in section 194 or section 194EE, no deduction of tax shall be made under any of the said sections in the case of an individual, who is resident in India, if such individual furnishes to the person responsible for paying any income of the nature referred to in section 194 or, as the case may be, section 194EE, a declaration in writing in duplicate in the prescribed form and verified in the prescribed manner to the effect that the tax on his estimated total income of the previous year in which such income is to be included in computing his total income will be nil.
(1A) Notwithstanding anything contained in section 192A or section 193 or section 194A or section 194D or section 194DA or section 194-I or section 194K, no deduction of tax shall be made under any of the said sections in the case of a person (not being a company or a firm), if such person furnishes to the person responsible for paying any income of the nature referred to in section 192A or section 193 or section 194A or section 194D or section 194DA or section 194-I or section 194K, as the case may be, a declaration in writing in duplicate in the prescribed form and verified in the prescribed manner to the effect that the tax on his estimated total income of the previous year in which such income is to be included in computing his total income will be nil.
(1B) The provisions of this section shall not apply where the amount of any income of the nature referred to in sub-section (1) or sub-section (1A), as the case may be, or the aggregate of the amounts of such incomes credited or paid or likely to be credited or paid during the previous year in which such income is to be included exceeds the maximum amount which is not chargeable to income-tax.
(1C) Notwithstanding anything contained in section 192A or section 193 or section 194 or section 194A or section 194D or section 194DA or section 194EE or section 194-I or section 194K or sub-section (1B) of this section, no deduction of tax shall be made in the case of an individual resident in India, who is of the age of sixty years or more at any time during the previous year, if such individual furnishes to the person responsible for paying any income of the nature referred to in section 192A or section 193 or section 194 or section 194A or section 194D or section 194DA or section 194EE or section 194-I or section 194K, as the case may be, a declaration in writing in duplicate in the prescribed form and verified in the prescribed manner to the effect that the tax on his estimated total income of the previous year in which such income is to be included in computing his total income will be nil.
(1D) Notwithstanding anything contained in this section, no deduction of tax shall be made by the Offshore Banking Unit from the interest paid—
(a) on deposit made on or after the 1st day of April, 2005, by a non-resident or a person not ordinarily resident in India; or
(b) on borrowing, on or after the 1st day of April, 2005, from a non-resident or a person not ordinarily resident in India.
Explanation.—For the purposes of this sub-section "Offshore Banking Unit" shall have the same meaning as assigned to it in clause (u) of section 2 of the Special Economic Zones Act, 2005 (28 of 2005).
(1E) Notwithstanding anything contained in this Chapter, no deduction of tax shall be made from any payment to any person for, or on behalf of, the New Pension System Trust referred to in clause (44) of section 10.
(1F) Notwithstanding anything contained in this Chapter, no deduction of tax shall be made, or deduction of tax shall be made at such lower rate, from such payment to such person or class of persons, including institution, association or body or class of institutions, associations or bodies, as may be notified by the Central Government in the Official Gazette, in this behalf.
(2) The person responsible for paying any income of the nature referred to in sub-section (1) or sub-section
(1A) or sub-section (1C) shall deliver or cause to be delivered to the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner one copy of the declaration referred to in sub-section (1) or sub-section (1A) or sub-section (1C) on or before the seventh day of the month next following the month in which the declaration is furnished to him.
C. AUTHORITIES
Candour rule observed: section 197A is a mechanical, beneficial self-declaration provision with no developed authority. The statutory scheme is offered.
No direct authority — statutory backdrop
Self-declaration in Forms 15G/15H
Principle: On a valid declaration that the declarant's tax liability is nil (Form 15G, subject to the exemption-limit condition; Form 15H for senior citizens), the payer is not to deduct from the specified incomes; the relief is automatic and does not require the Assessing Officer's certificate under section 197.
Use: Distinguishes the self-declaration route (section 197A) from the certificate route (section 197).
Hindustan Coca-Cola Beverages (P) Ltd. v. CIT (2007) 293 ITR 226 (SC) — cognate on default
Principle: No second recovery from the deductor where the payee has paid the tax; section 201(1A) interest runs for the period of default.
Use: Governs the consequence where a deduction is wrongly omitted in the absence of a valid declaration.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text is reproduced verbatim from the bare Act; case-law citations have been web-verified. Where a section is new, narrow or substantially unlitigated, the candour rule is observed — the absence of direct authority is stated and only genuinely cognate authority is offered. This digest is for professional reference and is not a substitute for the official report of any judgment.
CHAPTER XVII — COLLECTION AND RECOVERY OF TAX · B.—DEDUCTION AT SOURCE
Section 197A — No Deduction in Certain Cases (Forms 15G and 15H)
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Status: Live. A beneficial self-declaration provision; mechanical.
Finance Act, 2026: No amendment.
Mechanism: On a valid Form 15G/15H declaration of nil tax liability, the payer makes no deduction from the specified incomes, without need of a section 197 certificate.
Litigation profile: None. A mechanical, beneficial provision — the candour rule applies.
A. SECTION COMMENTARY
Section 197A enables a recipient of certain income to obtain non-deduction by self-declaration, without resort to the Assessing Officer. Where a resident furnishes to the payer a declaration in the prescribed form (Form 15G, or Form 15H for senior citizens) to the effect that the tax on his estimated total income for the year will be nil, no deduction is to be made from the specified incomes (broadly, interest and certain other payments enumerated in the section). The provision relieves small taxpayers — typically those below the taxable threshold living on interest income — from suffering deduction and then claiming a refund.
Scope, conditions and the senior-citizen route
The declaration mechanism is confined to the incomes specified in the section and is subject to conditions (in particular, for Form 15G, that the aggregate income does not exceed the basic exemption limit, a condition relaxed for the Form 15H senior-citizen declaration which turns on a nil tax liability). The payer who acts on a valid declaration is not required to deduct; a false declaration exposes the declarant to consequences, and the payer remains obliged to furnish the declarations to the tax administration.
A mechanical, beneficial provision — candour
Section 197A is mechanical and beneficial and is rarely litigated on its own terms. In candour, there is no developed body of merits authority; the provision is applied from its terms and the prescribed forms, with the general default consequences applying where a deduction that ought to have been made (in the absence of a valid declaration) is omitted.
B. STATUTORY POSITION (verbatim text)
Reproduced from the Income-tax Act, 1961 as amended up to the Finance Act, 2025 (the Finance Act, 2026 makes no amendment to this section). Editorial markers “***” denote text omitted by the Legislature.
197A. (1) Notwithstanding anything contained in section 194 or section 194EE, no deduction of tax shall be made under any of the said sections in the case of an individual, who is resident in India, if such individual furnishes to the person responsible for paying any income of the nature referred to in section 194 or, as the case may be, section 194EE, a declaration in writing in duplicate in the prescribed form and verified in the prescribed manner to the effect that the tax on his estimated total income of the previous year in which such income is to be included in computing his total income will be nil.
(1A) Notwithstanding anything contained in section 192A or section 193 or section 194A or section 194D or section 194DA or section 194-I or section 194K, no deduction of tax shall be made under any of the said sections in the case of a person (not being a company or a firm), if such person furnishes to the person responsible for paying any income of the nature referred to in section 192A or section 193 or section 194A or section 194D or section 194DA or section 194-I or section 194K, as the case may be, a declaration in writing in duplicate in the prescribed form and verified in the prescribed manner to the effect that the tax on his estimated total income of the previous year in which such income is to be included in computing his total income will be nil.
(1B) The provisions of this section shall not apply where the amount of any income of the nature referred to in sub-section (1) or sub-section (1A), as the case may be, or the aggregate of the amounts of such incomes credited or paid or likely to be credited or paid during the previous year in which such income is to be included exceeds the maximum amount which is not chargeable to income-tax.
(1C) Notwithstanding anything contained in section 192A or section 193 or section 194 or section 194A or section 194D or section 194DA or section 194EE or section 194-I or section 194K or sub-section (1B) of this section, no deduction of tax shall be made in the case of an individual resident in India, who is of the age of sixty years or more at any time during the previous year, if such individual furnishes to the person responsible for paying any income of the nature referred to in section 192A or section 193 or section 194 or section 194A or section 194D or section 194DA or section 194EE or section 194-I or section 194K, as the case may be, a declaration in writing in duplicate in the prescribed form and verified in the prescribed manner to the effect that the tax on his estimated total income of the previous year in which such income is to be included in computing his total income will be nil.
(1D) Notwithstanding anything contained in this section, no deduction of tax shall be made by the Offshore Banking Unit from the interest paid—
(a) on deposit made on or after the 1st day of April, 2005, by a non-resident or a person not ordinarily resident in India; or
(b) on borrowing, on or after the 1st day of April, 2005, from a non-resident or a person not ordinarily resident in India.
Explanation.—For the purposes of this sub-section "Offshore Banking Unit" shall have the same meaning as assigned to it in clause (u) of section 2 of the Special Economic Zones Act, 2005 (28 of 2005).
(1E) Notwithstanding anything contained in this Chapter, no deduction of tax shall be made from any payment to any person for, or on behalf of, the New Pension System Trust referred to in clause (44) of section 10.
(1F) Notwithstanding anything contained in this Chapter, no deduction of tax shall be made, or deduction of tax shall be made at such lower rate, from such payment to such person or class of persons, including institution, association or body or class of institutions, associations or bodies, as may be notified by the Central Government in the Official Gazette, in this behalf.
(2) The person responsible for paying any income of the nature referred to in sub-section (1) or sub-section
(1A) or sub-section (1C) shall deliver or cause to be delivered to the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner one copy of the declaration referred to in sub-section (1) or sub-section (1A) or sub-section (1C) on or before the seventh day of the month next following the month in which the declaration is furnished to him.
C. AUTHORITIES
Candour rule observed: section 197A is a mechanical, beneficial self-declaration provision with no developed authority. The statutory scheme is offered.
No direct authority — statutory backdrop
Self-declaration in Forms 15G/15H
Principle: On a valid declaration that the declarant's tax liability is nil (Form 15G, subject to the exemption-limit condition; Form 15H for senior citizens), the payer is not to deduct from the specified incomes; the relief is automatic and does not require the Assessing Officer's certificate under section 197.
Use: Distinguishes the self-declaration route (section 197A) from the certificate route (section 197).
Hindustan Coca-Cola Beverages (P) Ltd. v. CIT (2007) 293 ITR 226 (SC) — cognate on default
Principle: No second recovery from the deductor where the payee has paid the tax; section 201(1A) interest runs for the period of default.
Use: Governs the consequence where a deduction is wrongly omitted in the absence of a valid declaration.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text is reproduced verbatim from the bare Act; case-law citations have been web-verified. Where a section is new, narrow or substantially unlitigated, the candour rule is observed — the absence of direct authority is stated and only genuinely cognate authority is offered. This digest is for professional reference and is not a substitute for the official report of any judgment.