Lower TDS Deduction Certificate
Form 13, so tax is not over-deducted all year.
Where TDS at the standard rate exceeds what a taxpayer will actually owe, the excess sits with the department until a refund is processed after the year end. Section 197 allows an application for a certificate directing the deductor to deduct at a lower rate, or not at all.
It is most useful for loss-making companies, non-residents selling property where TDS is 20% or more of the whole consideration rather than the gain, and contractors on thin margins.
The application is made on TRACES and is decided on projected income for the year against past assessments. It has to be applied for early — a certificate is prospective and does not recover tax already deducted.
What is included
- Projected income and liability computed
- Form 13 application on TRACES
- Departmental queries answered
- Certificate issued to each deductor
What we need from you
- Returns and computations for the last three years
- Projected income statement for the current year
- Details of the deductors and estimated receipts
- Sale agreement, for a property transaction
Questions
Who benefits most from a lower TDS certificate?
Non-residents selling Indian property, where TDS is charged on the whole sale value rather than the gain, and loss-making or thin-margin businesses. In both cases the standard deduction can exceed the entire year's actual tax liability.
Also in Income tax
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