Overview
- The Ministry of Finance told the Lok Sabha Monday that the Income Tax Department is preparing rules to let taxpayers apply online for lower or nil tax deducted at source and that the rules will be notified in due course.
- The change rests on Section 395(1) of the Income‑tax Act, 2025 and a Finance Act, 2026 amendment that explicitly enabled electronic applications for such certificates.
- Under the proposed system the department will check information already on the income‑tax portal — prior returns, the Annual Information Statement, Taxpayer Information Summary and Form 26AS — to decide whether to grant a certificate.
- The online route is designed to cut paperwork, office visits and excess TDS for taxpayers who expect lower final tax liability, but applications with mismatched portal data may be rejected.
- The move fits a broader push to digital, faceless tax administration; the ministry also reported FY26 figures showing 2.24 lakh appeals disposed and 2.13 lakh faceless assessments completed as context for the reform.