Answer

1. F

   Facts

   A certificate under Sec 197 (now Sec 395(1)) allows TDS at a lower or nil rate, but the statement must quote the certificate number and the right flag for each row. If it is missing, CPC applies the normal rate.

2. P

   Provisions and law

   • Sec 197, Income-tax Act 1961 (now Sec 395(1), Income-tax Act 2025)Officer can issue a certificate for lower or nil TDS
   • Sec 200(3), Income-tax Act 1961 (now Sec 397(3)(b), Income-tax Act 2025)Deductor must file quarterly TDS statements and may file correction statements
3. A

   Analysis

   Check that the certificate number, validity dates and amount limit match what you reported. Example: a certificate allows 1% on payments up to ₹20 lakh; you paid ₹25 lakh at 1%. The excess ₹5 lakh needed the normal rate, so part of the default is genuine. Where the certificate details were simply missing, add them in a correction and the default should clear.

4. C

   Conclusion

   1. 1Get a copy of the lower deduction certificate
   2. 2Check validity dates and the amount limit
   3. 3Correct the rows with the certificate number and flag
   4. 4Pay the difference for payments beyond the limit
   5. 5Upload the correction statement

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.