Section 400 — CG Power to Relax | ITA 2025

Section 400 — - POWER OF CENTRAL GOVERNMENT TO RELAX TDS/TCS

Section 400 of the Income-tax Act, 2025 is the substantive equivalent of section 197A(1F) and the power to issue notifications under sections 192 to 196D / 206C of the 1961 Act. It empowers the Central Government to notify, by notification in the Official Gazette, classes of payments / payees / situations where TDS shall not be deducted or shall be deducted at a lower rate.

Statutory text — Income-tax Act, 2025

(1) The Central Government may, by notification provide that deduction or collection of tax shall not be made or is to be made at such lower rate, from such payment or receipt and in respect of such person or class of persons.

93. Substituted for “427” by the Finance Act, 2026, w.e.f. 1-4-2026. [(2) The Board may, with the previous approval of the Central Government, issue 94 guidelines to remove any difficulty arising in giving effect to the provisions of this Chapter and such guidelines shall be—

(a) binding on the income-tax authorities and on the person liable to deduct or, as the case may be, collect income-tax; and

(b) laid before each House of Parliament.]

(3) The Board may notify, a class of person, or cases, where the person responsible for paying to a non-resident, not being a company, or to a foreign company, any sum, whether or not chargeable under the provisions of this Act, to make an appli- cation in such form and manner as may be prescribed, to the Assessing Officer, to determine the appropriate proportion of sum chargeable in the manner as may be prescribed, and accordingly tax shall be deducted under section 393(2) (Table: Sl. No. 17) on that proportion of the sum which is so chargeable.

(4) The Board may by notification, make rules specifying the cases in which, and the circumstances under which, an application may be made for grant of a certificate under section 395(1) and (3), and the conditions subject to which such certificate may be granted and providing for all other matters connected therewith. Bar against direct demand on assessee.

STATUTORY ARCHITECTURE & TYPICAL EXEMPTIONS

Notifications under s. 197A(1F) (1961) have historically been the vehicle for blanket exemptions from TDS, e.g. Notification No. 56/2012 (interest payable to certain notified entities), Notification No. 75/2018 (interest paid to specified Indian Banks under s. 194A), Notification No. 47/2016 (gold deposit scheme bond interest). The 2025 Act preserves this delegated-legislation power.

PRACTITIONER NOTES

Maintain a current list of CG notifications under this section -- updates issued every Budget cycle.
Verify status of payee against latest notification before non-deduction; outdated notifications cause s. 398 default.

CROSS-REFERENCES

s. 393 / 394 -- substantive TDS / TCS.
s. 395 -- lower-deduction certificates.

← All sections (537)Act 2025 hub

INCOME-TAX ACT, 2025	INCOME-TAX ACT, 1961
2025 provision	1961 counterpart
s. 400 -- CG power to relax	s. 197A(1F) and various