Rule 221: Accountant certificate in Form No. 149 or Form No. 150 under section 398(2)
Section 398(2) protects a deductor, or a collector under section 394(1) [Table: Sl. Nos. 1 to 5 and 9], from being treated as an assessee in default when the payee or buyer has filed a return, included the amount and paid the tax, and the deductor or collector furnishes an accountant's certificate in the prescribed form. Rule 221 prescribes that form: Form No. 149 for non-deduction or short deduction, and Form No. 150 for non-collection or short collection.
Official notified Income-tax Rules, 2026Need advice on Rule 221?
This article is for general information. Read the official Rules and applicable Act amendments, including the Taxation and Other Laws (Amendment) Act, 2026. If you need professional advice for your situation, contact Bizeneed.
On this page
Bare law
Rule 221 - Form for furnishing certificate of accountant under Section 398(2) for person responsible for deduction or collection of tax as per section 394(1)[Table: Sl. No. 1 to 5 and 9] not to be deemed to be an assessee in default
(1) The certificate from an accountant, as defined in section 515(3)(b), under section 398(2) shall be furnished,— (a) in Form No. 149, for non-deduction or short deduction of tax; and (b) in Form no. 150, for non-collection or short collection of tax.
(2) Form No. 149 or Form No. 150 referred to in sub-rule (1) shall be furnished to the Director General of Income-tax (Systems) or the person authorised by him.
Rule breakdown
The two forms — Rule 221(1)
Form No. 149 is the accountant's certificate for non-deduction or short deduction of tax.
Form No. 150 is the accountant's certificate for non-collection or short collection of tax.
The certificate must be from an accountant as defined in section 515(3)(b) of the Act.
Where it is furnished — Rule 221(2)
The form is furnished to the Director General of Income-tax (Systems) or the person authorised by him.
What section 398(2) requires
Under section 398(2), the payee, buyer, licensee or lessee must have: (i) furnished the return of income under section 263; (ii) taken the amount into account in computing income in that return; and (iii) paid the tax due on the income declared in that return.
The accountant's certificate is the evidence of these three facts. Under section 398(3)(c), interest under section 398(3)(a)(i) is then payable from the date the tax was deductible or collectible to the date the payee or buyer furnished the return.
Key takeaways
Form No. 149
Non-deduction or short deduction of tax.
Form No. 150
Non-collection or short collection of tax.
Interest still runs
Section 398(3)(c) keeps interest payable up to the date the payee or buyer furnished the return.
Practical checklist
- Confirm all three section 398(2) conditions before engaging the accountant.
- Use Form No. 149 for deduction cases and Form No. 150 for collection cases.
Avoid
- Do not use Form No. 150 for collection under a Table entry outside Sl. Nos. 1 to 5 and 9 of section 394(1).
- Do not assume interest is fully waived once the certificate is furnished.
FAQs
Who signs the certificate?
An accountant as defined in section 515(3)(b) of the Act (Rule 221(1)).
Does the certificate cancel all interest?
No. Under section 398(3)(c), interest under section 398(3)(a)(i) is payable up to the date the payee or buyer furnished the return of income.
Which collectors can use Form No. 150?
Section 398(2)(b) covers persons responsible for collecting tax as per section 394(1) (Table: Sl. Nos. 1 to 5 and 9), and Rule 221 follows that wording.
To whom is the form furnished?
To the Director General of Income-tax (Systems) or the person authorised by him (Rule 221(2)).
Glossary
- Assessee in default
- Status under section 398(1) for a person who fails to deduct, collect or pay tax as required.
- Form No. 149
- Accountant certificate for non-deduction or short deduction.
- Form No. 150
- Accountant certificate for non-collection or short collection.