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Income Tax Form 13- NIL or Lower TDS

Section 197 has been inserted by the Central Government. As per this amendment, the person caught in the situation where 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, shall compose and submit an application to the Income Tax Officer to give him a certificate for Nil/ Lower deduction of TDS. The application is required to be filed in Form 13 under section 197 to the Income Tax Officer & after being satisfied the lower tax deduction is justifiable, he/she shall issue the certificate.

In above mentioned case, where such high TDS is being deducted – the TDS is first deducted and then the recipient of income claims a refund of TDS at the time of filing of his Income Tax Return. This is a time consuming and burdensome process as Income Tax Returns can only be filed after the end of the Financial Year.

Once the certificate mentioned in para 1 is issued under section 197, the TDS will be deducted after considering the TDS rate mentioned in the certificate in Income tax form 13. Worth mentioning here that the certificate shall be issued via online mode and the taxpayer could download the same from the web portal of the Income Tax Department.

Timeline for Making the Application:

Income-tax provision does not provide for a deadline to make an application under Section 197. However, as TDS is made on income of on-going financial year it is advisable to make an application at the beginning of financial year in case of regular income throughout the financial year and as and when the need arises in case of one-off incomes.

Details required for Form 13:

  1. Name and PAN No.
  2. Details regarding the purpose for which the payment is being received
  3. Details of income of the last 3 years and the projected current year’s income
  4. Details of payment of tax of the last 3 years
  5. Details of tax deducted/ paid for the current year
  6. Estimated Tax Liability for the current year
  7. Email ID
  8. Mobile Number

Download the Form 13 in pdf:

Form_13_PDF

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