Facing Refund Delays? Lower TDS Certificate Might Be a Solution

If a person knows that their actual tax payable will be very low or zero, they can request the officer to give them a certificate so that less TDS or no TDS at all is cut from their income. This helps prevent extra tax being deducted upfront.

Who can apply for a certificate?

Anyone can apply for a Nil or Lower TDS certificate; it doesn’t matter if you are an individual, a firm, a resident, a non-resident, an Indian company, or a foreign company.

Which incomes are eligible for a no deduction/lower deduction certificate?

You can get this certificate only for the following types of income:

• TDS from Dividend (Section 194)
• TDS from Income Distributed by Business Trust 1 (Section 194LBA)
• TDS from Salaries (Section 192)
• TDS from Interest on Securities (Section 193)
• TDS from payment of a certain sum for purchase of goods (Section 194Q)
• TDS from payment of any other income to a Non-Resident (Section 195)
• TDS from Income in respect of units of Investment Fund (Section 194LBB)
• TDS from Interest other than Interest on Securities (Section 194A)
• TDS from Payment to Contractors (Section 194C)
• TDS from the Insurance Commission (Section 194D)
• TDS from commission on sale of lottery tickets (Section 194G)
• TDS from Commission or broking (Section 194H)
• TDS from Rent (Section 194-I)
• TDS from Fees for professionals or technical services (Section 194J)
• TDS from income in respect of units (Resident) (Section 194K)
• TDS from payment of compensation on compulsory acquisition of an immovable property (Section 194LA)
• TDS from Income in respect of investment in Securitization Trust (Section 194LBC)
• TDS from the payment made to a contractor or a professional by certain individuals or Hindu undivided family (Section 194M)
• TDS from the payment made to e-commerce participants (Section 194-O)

How to apply for this certificate?

You have to fill out Form 13 to apply for this certificate. The form is submitted online, and you can sign it using a Digital Signature or an E-Verification Code (EVC).

Most importantly, you must have a PAN to apply; without a Permanent Account Number, the tax officer will not issue this certificate.

Issue of Certificate

The tax department will send the nil or lower TDS certificate directly to the person who is supposed to deduct the TDS, and they will also inform the person who applied for it.

But if the applicant has more than 100 people who might deduct TDS and doesn’t know all their details, then the certificate can be given directly to the applicant. In that case, the applicant can receive their income with lower TDS deducted.

The certificate is valid for the time period written on it, unless the Assessing Officer cancels it earlier.

How to file Form 13

Following are the steps to file form 13:

Step 1: Go to the portal https://contents.tdscpc.gov.in/ and ‘Login‘.

Step 2: Log in as a “Taxpayer”.

Step 3: Navigate to the “Statement/Forms > Request for Firm 13” from the dropdown menu.

Step 4: Select your “Residential status” to proceed.

Step 5: Read the checklist carefully and click “Proceed”.

Step 6: Select the relevant option from the dropdown of ‘Request Type’ and ‘Financial Year’ and click ‘Proceed’.

Step 7: The request number will be generated.

Step 8: Select the number of entries for which a nil or lower TDS certificate is required.

Step 9: Furnish the following details: (i) to (v): Your basic details like status, residential status, PAN, email, and mobile number will already be filled in automatically. You only have to choose your State and District from the dropdown. Based on that, the system will automatically select your Assessing Officer (AO).

(vi): Here, you must mention if you already have any pending tax liability under the Income Tax Act.

(vii) to (xi): In these points, you need to enter your estimated income for the year, the tax you think you will owe, any income that is exempt from tax, and details of advance tax or TDS/TCS already paid.

(xii): You must choose whether you are claiming exemption under Section 10, 11, or 12 (for certain trusts or institutions covered by Rule 28AB) or not.

Step 10: Select “Save and Proceed”.

Step 11: Choose the type of ‘Annexure’ from the dropdown and click “Proceed”.

Step 12: Enter the details in the “Annexure-I (No/Lower Deduction)” and click on “Save and Proceed”.

Step 13: Upload the required document by clicking “Browse”. It is also mandatory to fill the template of estimated income.

Step 14: Fill the declaration and click “preview and submit”.

Step 15: Once you finish filling out Form 13, the completed form will appear on your screen. To edit, click the back button on your browser to return and edit the details. Verify the details and click Submit to send the form.

Step 16: Validate the form using the suitable option and proceed to submit the form.