Income Tax Form 13 for Lower Deduction of TDS: Section 197
As per the provisions of the Income Tax Act, TDS/TCS is required to be deducted at the time of making any payment. This TDS is deducted by the person making the payment and is required to be deposited with the Income Tax Department before the due dates of depositing TDS.
In some circumstances, a case may arise that TDS is being deducted from the income of the receiver, but his total tax liability computed at the end of the year as per the Income Tax slab rates is less than the TDS deducted.
In such cases, TDS is first deducted by the person making the payment, then such TDS is deposited with the govt., and then a refund of TDS is being claimed.
To reduce the hardships faced by the taxpayers, the govt. has inserted Section 197 which states that in case the total tax liability at the end of the person whose TDS is being deducted, he may file an application to the Income Tax Officer to give him a certificate for Nil/Lower deduction of TDS.
Once such certificate is granted under Section 197, the TDS will be deducted as per the TDS rate stated in the Certificate.
An application for Nil/Lower deduction of TDS is required to be filed in Form 13 to the Income Tax Officer, and the tax officer being satisfied that lower deduction of TDS is justified shall issue a certificate for the same under Section 197.
Nil/Lower deduction of TDS is only applicable once the income tax officer has issued a certificate for the same in response to an application made in Form 13. This certificate is required to be submitted to the person who is deducting the TDS. This certificate is required in all cases except where payment is being made as Interest on Securities or Interest on Fixed deposits under Section 197A. In such cases, Form 15G/Form 15H is required to be submitted.
Procedure to file form 13 and details to be submitted:
- Name and Pan Card Details
- Details of income of last 3 years along with current year’s predicted income
- Details of tax deducted in the current year
- Details of tax paid in the last 3 years
- Details regarding for the payment to be received
