(1) Where the Assessing Officer, on an application made by a person under sub-rule (1) of rule 28 is satisfied that existing and estimated tax liability of a person justifies the deduction of tax at lower rate or no deduction of tax, as the case may be, the Assessing Officer shall issue a certificate in accordance with the provisions of sub-section (1) of section 197 for deduction of tax at such lower rate or no deduction of tax.
(2) The existing and estimated liability referred to in sub-rule (1) shall be determined by the Assessing Officer after taking into consideration the following:—
(i) tax payable on estimated income of the previous year relevant to the assessment year.
(ii) tax payable on the assessed or returned income, as the case may be, of the last three previous years.
(iii) existing liability under the Income-tax Act, 1961 and Wealth-tax Act, 1957.
(iv) advance tax payment for the assessment year relevant to the previous year till the date of making application under sub-rule (1) of rule 28.
(v) tax deducted at source for the assessment year relevant to the previous year till the date of making application under sub-rule (1) of rule 28.
(vi) tax collected at source for the assessment year relevant to the previous year till the date of making application under sub-rule (1) of rule 28.
(3) The certificate shall be valid for such period of the previous year as may be specified in the certificate, unless it is cancelled by the Assessing Officer at any time before the expiry of the specified period.
(4) The certificate for no deduction of tax shall be valid only with regard to the person responsible for deducting the tax and named therein.
(5) The certificate referred to in sub-rule (4) shall be issued direct to the person responsible for deducting the tax under advice to the person who made an application for issue of such certificate.
(6) The certificate for deduction of tax at lower rate shall be issued to the person who made an application for issue of such certificate, authorizing him to receive income or sum after deduction of tax at lower rate.
