Rule 212 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Rule 212 of the Income-tax Rules, 2026 puts a buyer's no-TCS declaration into Form No. 127, in duplicate, with one copy to the Chief Commissioner by the 7th of the following month; rule 221 puts the accountant's certificate into Form No. 149 or Form No. 150.
What the buyer declares
Sub-rule (1) of rule 212: a declaration under section 394(2), certifying that the goods being purchased as referred to in section 394(1) are to be utilised for the purposes of manufacturing, processing or producing articles or things and not for trading purposes, shall be in Form No. 127 and verified in the manner indicated therein. The 1962 parallel is rule 37C.
The certificate in rule 212 is forward-looking — the goods "are to be utilised" for manufacturing, processing or producing. It is a statement of intention at the time of purchase, and the buyer signs it under verification. A buyer who declares a manufacturing purpose and then trades the goods has made a false declaration, not merely changed his mind. Where the intended use is genuinely mixed, the declaration does not fit and tax should be collected.
The two-copy routing
| Step | Provision in rule 212 |
|---|---|
| Form | Form No. 127, verified as indicated in it — sub-rule (1) |
| Copies | Furnished in duplicate to the person responsible for collecting tax — sub-rule (2) |
| Onward delivery | The collector delivers or causes to be delivered one copy to the Chief Commissioner of Income-tax or the Commissioner of Income-tax — sub-rule (3) |
| Deadline | On or before the 7th day of the month succeeding the month in which the declaration was furnished to him — sub-rule (3) |
| Which authority | The Chief Commissioner or Commissioner to whom the Assessing Officer having jurisdiction to assess the collector is subordinate — sub-rule (4) |
Sub-rule (4) of rule 212 answers the question that otherwise stalls the filing: the authority is fixed by the collector's assessing jurisdiction, not the buyer's. A collector receiving declarations from buyers across several states sends them all to his own Chief Commissioner or Commissioner.
The 7th-of-the-following-month deadline runs from the month the declaration was furnished to the collector, not from the month of sale or of payment. A declaration handed over on 28 April is due by 7 May regardless of when the goods were invoiced.
Rule 221 — the accountant's certificate
Where rule 212 prevents a collection, rule 221 rescues a deductor or collector who did not deduct or collect when he should have. Sub-rule (1): the certificate from an accountant, as defined in section 515(3)(b), under section 398(2), shall be furnished —
| Situation | Form |
|---|---|
| Non-deduction or short deduction of tax | Form No. 149 |
| Non-collection or short collection of tax | Form No. 150 |
Sub-rule (2): Form No. 149 or Form No. 150 shall be furnished to the Director General of Income-tax (Systems) or the person authorised by him. The 1962 parallels are rules 31ACB and 37J.
Section 398(2) relieves a person responsible for deduction or collection under section 394(1) from being deemed an assessee in default. The logic is that where the payee or buyer has already returned the income and paid the tax, collecting it a second time from the deductor would be a double recovery. The accountant's certificate is the proof of that. What it does not do is erase the failure: interest for the period of delay, and any penalty consequences, are separate questions that rule 221 does not address.
Note that rule 221 keeps two forms for what looks like one situation. The split follows the deduction / collection divide throughout Chapter XIX — Form No. 149 for TDS failures, Form No. 150 for TCS failures — and using the wrong one is a filing defect, not a formality.
How the two rules relate
- Rule 212 operates before the transaction: a valid Form No. 127 means no tax is collected in the first place.
- Rule 221 operates after a failure: a certificate in Form No. 149 or Form No. 150 keeps the deductor or collector out of assessee-in-default status.
- Both are anchored in section 394(1) — rule 212 at Sl. Nos. 1 to 5, rule 221 at Sl. Nos. 1 to 5 and 9.
- Both put a filing obligation on the collector or deductor, not only on the taxpayer claiming relief.
Worked example
| Facts | Position under rule 212 and rule 221 |
|---|---|
| Buyer purchases scrap for use in its own furnace | Form No. 127 declaration available under rule 212 |
| Buyer intends to resell the goods | No declaration — the trading purpose is excluded |
| Declaration given to the collector on 28 April | One copy to the Chief Commissioner by 7 May |
| Goods invoiced in February, declaration furnished in April | Deadline still runs from April — 7 May |
| Collector sells to buyers in five states | All copies go to the collector's own Chief Commissioner or Commissioner |
| Collector keeps both copies | Non-compliant — sub-rule (3) requires one to be delivered |
| Deductor failed to deduct; payee has returned the income and paid | Accountant's certificate in Form No. 149 under rule 221 |
| Collector short-collected TCS in similar circumstances | Form No. 150, not Form No. 149 |
| Certificate sent to the Assessing Officer | Wrong route — it goes to the DGIT (Systems) or his authorised person |
| Certificate obtained; deductor assumes interest is waived | Not so — rule 221 addresses default status only |
Compliance checklist
- Confirm the goods fall within section 394(1) before accepting a rule 212 declaration.
- Take the declaration in Form No. 127, verified, and in duplicate.
- Test the buyer's purpose against manufacturing, processing or producing — trading is out.
- Diarise the 7th of the following month from the date the declaration reaches the collector.
- Send the copy to the Chief Commissioner or Commissioner over the collector's Assessing Officer.
- Retain the second copy with the transaction file.
- For a deduction failure use Form No. 149; for a collection failure use Form No. 150.
- File the certificate with the DGIT (Systems), and treat interest as a separate exposure.
Common mistakes
- Accepting a Form No. 127 declaration for goods bought for resale.
- Taking a single copy when rule 212(2) requires duplicate.
- Running the 7th-day deadline from the invoice month rather than the month of furnishing.
- Sending the copy to the buyer's Commissioner instead of the collector's.
- Using Form No. 149 for a collection failure.
- Filing the accountant's certificate with the Assessing Officer.
- Assuming the certificate removes interest as well as default status.
Which year this governs
The Income-tax Rules, 2026 are made under the Income-tax Act, 2025. The 1962 parallels are rule 37C for rule 212 and rules 31ACB and 37J for rule 221, given for tracing only. Verify the current text and form numbers before filing.