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Form 13 – Non-Deduction / Lower Deduction Certificate for TDS

Updated on: 18 Jun, 2024 06:33 PM

Tax deducted at source (TDS) can be a hassle for taxpayers, especially those suffering from excess TDS deductions. Sometimes TDS deducts from the taxpayer's income more than they are liable to pay to Income tax authorities. Overpayment of taxes can be a nightmare for taxpayers.

However, Form 13 of Section 197 of the Income Tax Act made it easy for taxpayers to get the certificate for non/lower deduction of TDS. In this guide, we will discuss Form 13, the procedure of filing the form, and explanations related to Form 13 under Section 197 of the Income Tax Act.

What is Tax Deducted at Source (TDS)?

Tax deducted at source (TDS) is a way of collecting tax from the source of income. It means that the person or organization that pays you will deduct a certain percentage of tax from your income before paying you. This way, the government gets its share of the tax without any delay or evasion. TDS applies to different types of income, such as salary, interest, commission, rent, etc.


What is Section 197A?

Any individual, including corporations, can apply for Section 197. However, for specific income categories, resident individuals or non-corporate entities can also submit a self-declaration using specified forms (Form 15G/Form 15H) to exempt TDS deduction.


What is Form 13 Under Section 197?

Form 13, under section 197, is a document that allows you to claim lower or non-deduction of tax at source (TDS) from your income. If you have a valid reason to believe that your tax liability for the year is lower than the TDS deducted by your payer, you can apply for Form 13 to the income tax officer. The Income Tax department will issue a certificate specifying the rate of TDS applicable to you, which you can submit to your payer. This way, you can avoid excess tax deductions and save yourself from the hassle of claiming a refund later.


Type of Income Covered Under Section 197

If the recipient's income falls under the following sections, he can apply for section 197.

Sections Types of Incomes
192 Salary Income
193 Interest on securities
194 Dividends
194A Interest excluding interest on securities
194C Contractors income
194D Insurance commission
194G Commission/prize/remuneration on lotteries
194H Commission or brokerage
194I Rent
194J Fee for technical or professional services
194LA Compensation on acquiring immovable property
194LBB Income of units of investment fund
194LBC Income of investment in securitization trust
195 Non-residents’ income

What is the Eligibility for Filing Form 13?

If a person's Income falls under any section mentioned in the above chart, and individual’s estimate of tax liabilities justifies the lower deduction or non-deduction of TDS. In such a case, the individual can file Form 13.


When Should an Application be Submitted Using Form 13?

The Income Tax Act does not specify any timeline for filing an application through Form 13. The payee has the flexibility to submit an application at any point during the financial year. Nonetheless, initiating the application process at the start of the year is advisable to include income earned throughout the year, considering that TDS is deducted at the time of income accrual.


What are the Required Documents for Filling Form 13?

  • Signed form 13
  • Copies of audit reports and financial statements of the previous 3 years
  • The estimated calculation for the current year and copies of Income statements for the previous 3 years
  • Copies of the assessment order, income returns, and acknowledgment for the previous 3 years
  • Projected profit and loss statements for the current financial year
  • PAN Card
  • E-TDS return statements for the previous 2 years
  • Tax deduction account number for the payers
  • Any other documents relatable to the nature of Income
  • Previous TDS defaults

The application should be submitted to the jurisdictional Assessing Officer (TDS) within 30 days from the end of the month in which it is received. The Assessing Officer will review the documents submitted and may ask for further explanations and documents before issuing the certificate or rejecting the application. The certificate will specify the rate at which tax is to be deducted/collected or that no tax is to be deducted/collected. The certificate will be valid for the period specified therein or until the Assessing Officer's cancellation.


What is the Procedure for Filing Form 13 for Non/Lower Deduction of TDS?

  • An application of Form 13 of income tax for non-deduction or lower deduction of the TDS requires to be filled out and can be sent via email or post to the assessing officer.
  • Form 13 can be filed online or manually; however, taxpayers in Mumbai, Karnataka, and Tamil Nadu can only fill the Form 13 of income tax online for faster processing.
  • It is advisable to fill the complete form with accurate details for faster processing in the first instance.
  • If the application is proper, then the Assessing officer will issue the certificate.
  • A copy of the certificate is attached to the invoice and given to the TDS deductor for a lower deduction or non-deduction of TDS.

Steps to Apply for Form 13 Online

  • Log into the TRACES portal(https://contents.tdscpc.gov.in/)
  • Select 'Submit Request'
  • Choose 'Form 13’
  • Fill in details, attach necessary documents, such as such as financial statements, tax returns, and any other supporting evidence, and submit.
  • An acknowledgment receipt will be generated. The Assessing Officer will review and process the submission.

What is the Validity of an Application Made Under Section 197?

Form 13, issued under section 197, is issued for a specific financial year and is valid for the FY in question. It stands valid from the date of issuance throughout the financial year unless it gets canceled by the assessing officer before its expiry.

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FAQs on Lower Deduction Certificate for TDS

Q- What is Form 13?

Form 13 is an application for a Lower or Nil Deduction of Tax at Source (TDS) certificate, issued by the Indian Income Tax Department. It allows taxpayers to apply for a reduction or exemption from TDS on certain types of income. This certificate is particularly useful for individuals and businesses who expect their total income to fall below the taxable limit or who have already paid sufficient advance tax and hence do not require TDS to be deducted at standard rates.


Q- Who do we need to send form 13 TDS to?

Form 13 can be sent to the assessing officer via email or post. However, Mumbai, Karnataka, and Tamil Nadu Taxpayers can register and fill out the form online.


Q- What is the exemption under Section 197 of the Income Tax Act?

Eligible Taxpayers can fill out Form 13 under Section 197 of the Income Tax Act and get the benefits of lower deduction or non-deduction of TDS.


Q- Who will issue Form 13?

After filling out Form 13, a certificate for lower or non-deduction of TDS can be issued by the assessing officer of the Income Tax department.


CA Abhishek Soni
CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2Win.in. Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.

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