Lower TDS Certificates U/S.197:

Standard Requirements for making an Applicant u/s 197 :
The process involves registration on the TRACES website, submission of Form 13 and supporting documents and completion of the process by the Assessing Officer, ensuring a quicker and more efficient process. An assessee must complete Form 13 to get a NIL or lower TDS certificate under section 197. Such a certificate is issued by the Income Tax Department if the assessee’s estimated tax liability justifies no deduction tax or deduction of tax at a lower rate. The certificate can be obtained concerning incomes such as Salaries, Interest on Securities, Dividend, Interest other than interest on securities, rent, fees for professionals or technical services, payment of compensation on compulsory acquisition of immovable property.

First, register with PAN (Permanent Account Number) at TRACES (www.tdscpc.gov.in) website. After login, submit Form 13 and Annexure with supporting documents using either Digital Signature, Electronic Verification Code, Aadhar-based Authentication, or Mobile OTP. NRIs can submit the form with the help of a digital signature only.

2. Contact person (responsible for TDS) details:
These details will be used in case any information/ documents are required for processing the application.

3. Income/Tax payment details:

  1. Details of last three years’ income and projection for current year to be provided.
  2. Tax payment details for last 3 years to be filled.
  3. Details of tax already deducted / paid for current FY to be filled.
  4. Details of demand outstanding before any Income Tax authority to be provided including details of AY, amount outstanding, section and current status (whether any stay granted).
  5. Particulars of default as reported in column 27 of tax audit report (Form No. 3CD) for last three years to be provided. Reasons for the default and corrective action taken should also be mentioned.
  6. Details of pending scrutiny assessment or penalty proceedings to be provided.

4. TAN details, if applicable.

5. Details of Cumulative Tax likely to be foregone by issue of certificate

  1. Section: Section of the Income Tax Act under which the receipt is liable for TDS.
  2. Projected amount: Cumulative amount of projected receipt under this section.
  3. No. of parties: No. of parties from whom the receipt is expected.
  4. Normal rate of TDS: Rate of TDS applicable as per Income Tax Act if no certificate is issued.
  5. Lower rate requested: Rate at which lower deduction certificate is requested for receipts covered under this section.
  6. Tax Foregone.
  7. Total Tax foregone as per certificate proposed.
  8. Tax foregone as per certificate, if any issued earlier during Financial Year: to be filled if certificate for lower deduction issued earlier for the same financial year.
  9. Cumulative tax foregone.

6. Deductor wise details with respect to payments for which certificate is sought to be provided.

  1. Name: Name of the deductor from whom payment is expected. Name should be same as appearing in TAN allotment letter.
  2. TAN
  3. Address: Current correspondence address of the deductor.
  4. Email: Email ID of the deductor.
  5. Receipt amount: Expected receipt amount to be filled.
  6. TDS Section under which receipt is covered.

7. Documents to be submitted along with application:

  1. ITR-V/Acknowledgement of filing Income Tax return for relevant financial years to be provided.
  2. Computation of Income for relevant financial years.
  3. Balance Sheet and Profit and Loss Account for relevant financial years with all Schedules/Annexures.
  4. Audit report in Form-3CD/3CA-3CB/10B (Whichever is applicable) for relevant financial years.
  5. Complete Chart showing all the payments made, the head of such expenses (e.g. contract payment, legal professional fees, etc.) and the section under which tax has been deducted by the applicant.