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RULE 209 INCOME-TAX RULES 2026

Application by payee for certificate authorising receipt of interest and other sums without deduction of tax.

209. (1) Any person, as mentioned in column B of the following Table, entitled to receive any interest or any other sum of the nature specified in section 393(2) [Table: Sl. No. 17], on fulfilment of the conditions specified in column C thereof, may make an application in Form No. 126, for grant of a certificate under section 395(1) authorising him to receive without deduction of tax, any such income or sum as specified in column D thereof:

TABLE

Sl. No.

Person

Conditions

Nature of income or sum

Banking company or an insurer (as defined in section 2(9)(d) of Insurance Act, 1938 (4 of 1938)), which is not a domestic company, and which carries on operations in India through a branch.

(a)		The person concerned has been regularly assessed to income-tax in India and has furnished the returns of income for last five tax years for which such returns became due on or before the date on which the application under this rule is made;
(b)		he is not in default or deemed to be in default in respect of any tax (including advance tax and tax payable under section 266), interest, penalty, fine, or any other sum payable under the Act; and
(c)		the interest or other sum is receivable by the branches on their own account and not on behalf of its head office or any branch situated outside India, or any other person.

Any income by way of interest, not being interest on securities (other than interest payable on securities referred to in section 393(4) [Table: Sl. No. 6]), or any other sum, not being dividends.

Any person other than the person referred to in Sl. No. 1 who carries on a business or profession in India through a branch.

(a)		The conditions specified in Sl. No. 1;
(b)		he has been carrying on business or profession in India continuously for a period of not less than five years immediately preceding the date of the application; and
(c)		the value of the fixed assets in India of such business or profession as shown in his books of account for the tax year, which ended immediately before the date of the application, or where the accounts in respect of such tax year have not been made up before the said date, the tax year immediately preceding that year, exceeds fifty lakhs rupees.

Any sum not being interest or dividends.

(2) The certificate granted by the Assessing Officer under section 395(1) shall be valid for the tax year specified therein, unless it is cancelled by him at any time before the expiry of the said tax year.

(3) An application for a fresh certificate may be made, if required, after the expiry of validity of the earlier certificate, or within three months before the expiry thereof.