Section 197 of the Income Tax Act, 1961 allows a taxpayer to apply for lower or nil TDS (Tax Deducted at Source) deduction on certain incomes, ensuring that excess TDS is not deducted, which can lead to cash flow issues or refund delays. This is particularly helpful when the total tax liability is lower than the TDS rates prescribed under the Act.

Who Can Apply Under Section 197?
Any resident or non-resident taxpayer (individual, firm, LLP, company, trust, etc.) receiving income liable for TDS can apply, including:
🔸 Freelancers & professionals
🔸Salaried individuals
🔸Contractors & Etc.

Documents Required
1. PAN Card
2. Previous 2–3 years’ Income Tax Returns (ITR) with computation
3. Financial statements (Balance Sheet, P&L)
4. Projected income & tax liability for the financial year
5. TDS details & projected receipts
6. Details of ongoing contracts or income streams
7. Copy of Tax Audit Report (if applicable)
8. Exemption certificates (for charitable institutions)

Time Required for Processing
✔️ Typically processed in 15 to 30 days from the date of application.
✔️Delays may occur if additional queries/documents are raised by the AO.

📝 How to Apply for Section 197 Certificate?
Applications must be made electronically through the TRACES portal:

Step-by-Step Process:

1. Login to the TRACES portal
2. Navigate to “Statements/Forms” → “Request for Form 13 (Section 197/206C(9))”
3. Fill in Form 13 with details of:
🔸PAN
🔸Expected income & TDS details
🔸Justification for lower deduction
4. Upload supporting documents (see below).
5. Submit the form and note the reference number.
6. The Assessing Officer (AO) may contact you for clarification or documents.
7. Once satisfied, the AO issues a digital certificate under Section 197.

🕐 Validity of Section 197 Certificate
🔸 Valid for the financial year for which it is issued, unless otherwise specified.
🔸A fresh application must be submitted for each financial year.
🔸The certificate is valid only for the deductor(s) and income streams mentioned in it.