CHAPTER XVII — COLLECTION AND RECOVERY OF TAX · B.—DEDUCTION AT SOURCE
CHAPTER XVII — COLLECTION AND RECOVERY OF TAX · B.—DEDUCTION AT SOURCE
Section 197B — Lower Deduction in Certain Cases for a Limited Period (COVID Relief, Spent)
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Status: Spent. A one-year COVID-relief concession (FY 2020-21).
Finance Act, 2026: No amendment (spent).
Mechanism: Reduced the specified TDS rates to 75% (a 25% cut) for 14 May 2020 to 31 March 2021, except the no-PAN higher rate; no current operation.
Litigation profile: None. A spent, time-bound concession — the candour rule applies.
A. SECTION COMMENTARY
Section 197B was a temporary, relief-oriented provision. Inserted to give effect to the COVID-19 fiscal relief, it provided that, in respect of any sum or income or amount on which tax was deductible under the specified provisions of the Chapter during the period from 14 May 2020 to 31 March 2021, the deduction was to be made at seventy-five per cent of the otherwise applicable rate — that is, a 25 per cent reduction in the TDS rates for that period (the reduction did not apply where tax was deductible at the higher rate for want of PAN).
A spent, time-bound concession
By its own terms section 197B operated only for the financial year 2020-21 (and only from 14 May 2020). It is now spent: it has no application to any period after 31 March 2021, surviving only for the assessment of that year. It is recorded here for completeness, as a marker of the pandemic-era rate relief.
No authority — candour
Being a one-year concession, section 197B generated no body of judicial authority. In candour, it is noted for completeness; nothing turns on it for current compliance.
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.
197B. In case the provisions of sections 193, 194, 194A, 194C, 194D, 194DA, 194EE, 194F, 194G, 194H, 194-I, 194-IA, 194-IB, 194-IC, 194J, 194K, 194LA, sub-section (1) of section 194LBA, clause (i) of section 194LBB, sub-section (1) of section 194LBC, sections 194M and 194-O require deduction of tax at source during the period commencing from the 14th day of May, 2020 to the 31st day of March, 2021, then notwithstanding anything contained in these sections the deduction of tax shall be made at the rate being the three-fourth of the rate specified in these sections.
C. AUTHORITIES
Candour rule strictly observed: section 197B is a spent, one-year COVID-relief provision with no judicial authority. Noted for completeness.
No authority — legislative note
Time-bound 25% rate reduction (FY 2020-21)
Principle: Section 197B reduced the specified TDS rates by 25% (to 75% of the applicable rate) for the period 14 May 2020 to 31 March 2021, except where the higher no-PAN rate applied; it is spent thereafter.
Use: States the limited historic operation of the provision.
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 197B — Lower Deduction in Certain Cases for a Limited Period (COVID Relief, Spent)
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Status: Spent. A one-year COVID-relief concession (FY 2020-21).
Finance Act, 2026: No amendment (spent).
Mechanism: Reduced the specified TDS rates to 75% (a 25% cut) for 14 May 2020 to 31 March 2021, except the no-PAN higher rate; no current operation.
Litigation profile: None. A spent, time-bound concession — the candour rule applies.
A. SECTION COMMENTARY
Section 197B was a temporary, relief-oriented provision. Inserted to give effect to the COVID-19 fiscal relief, it provided that, in respect of any sum or income or amount on which tax was deductible under the specified provisions of the Chapter during the period from 14 May 2020 to 31 March 2021, the deduction was to be made at seventy-five per cent of the otherwise applicable rate — that is, a 25 per cent reduction in the TDS rates for that period (the reduction did not apply where tax was deductible at the higher rate for want of PAN).
A spent, time-bound concession
By its own terms section 197B operated only for the financial year 2020-21 (and only from 14 May 2020). It is now spent: it has no application to any period after 31 March 2021, surviving only for the assessment of that year. It is recorded here for completeness, as a marker of the pandemic-era rate relief.
No authority — candour
Being a one-year concession, section 197B generated no body of judicial authority. In candour, it is noted for completeness; nothing turns on it for current compliance.
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.
197B. In case the provisions of sections 193, 194, 194A, 194C, 194D, 194DA, 194EE, 194F, 194G, 194H, 194-I, 194-IA, 194-IB, 194-IC, 194J, 194K, 194LA, sub-section (1) of section 194LBA, clause (i) of section 194LBB, sub-section (1) of section 194LBC, sections 194M and 194-O require deduction of tax at source during the period commencing from the 14th day of May, 2020 to the 31st day of March, 2021, then notwithstanding anything contained in these sections the deduction of tax shall be made at the rate being the three-fourth of the rate specified in these sections.
C. AUTHORITIES
Candour rule strictly observed: section 197B is a spent, one-year COVID-relief provision with no judicial authority. Noted for completeness.
No authority — legislative note
Time-bound 25% rate reduction (FY 2020-21)
Principle: Section 197B reduced the specified TDS rates by 25% (to 75% of the applicable rate) for the period 14 May 2020 to 31 March 2021, except where the higher no-PAN rate applied; it is spent thereafter.
Use: States the limited historic operation of the provision.
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.