Lower Deduction of TDS: Section 197: Income Tax Form 13 –
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: In accordance with the provisions of the income tax law, TDS is needed to be deducted when making any payment. This TDS is reduced by people who make payments and are required to be stored with the income tax department before the TDS deposit maturity date.
In some circumstances, a case can arise that TDS is deducted from the recipient’s income, but the total tax obligation is calculated at the end of the year according to the level of tax manufacturer less than the reduced TDS. This is very common in the event of property sales by NRI where more than 20% of TDS is reduced by all selling points instead of being deducted on the capital gain.
In such cases, where the high TDS was deducted – TDS was first deducted and then the recipient of the income claimed the TDS refund during the submission of a refund of its income tax. This is a time-consuming and burdensome process because the refund of income tax can only be submitted after the end of the financial year. In addition, if the amount of refund is higher, the refund will not be processed easily and can take extra time to be processed by the Income Tax Department
To reduce the difficulties faced by taxpayers, the government has included Section 197 stating that if the total tax liabilities at the end of the TDS person who is being reduced by less than the amount of TDS is being reduced, it may be an application file for income tax officers to give him a certificate for reduction TDS NIL / Lower.
The application for reducing the Nil / Low TDS is needed to be submitted in Form 13 to income tax officers, and tax officers about satisfied that lower TDS reduction is justified will issue a certificate for the same part of 197.
After such certificates are given based on Section 197, TDS will be deducted according to the TDS rates stated in the certificate. This certificate will be issued online and taxpayers can download the same from the Income Tax Portal
Reduction TDS Nile / Low only applies after income tax officers have issued a certificate for the same thing in response to the application created in the form 13. This certificate is needed to be submitted to people who are reduced by TDS. This certificate is needed in all cases unless payment is made as interest in securities or interest in deposits remains below section of 197a. In such cases, Form 15G / Form 15H must be submitted.
Procedure for submitting a form 13 for income tax officers
The application for reducing the Nile / Low TDS below Section 197 must be made by taxpayers for income tax officers in Form 13. Various details must be completed by taxpayers in this form 13, some of which include: –
1. Name and PAN No.
2. Details about the purpose of payment are accepted
3. Details of the last 3 years and this year’s income projection
4. Details of the last 3 years tax payment
5. Detailed tax details / paid for the current year
6. Estimate of tax liabilities for the current year
7. E-mail
8. Mobile phone number
Draft copy of Form 13 can be seen here – draft form 13
The certificate issued by income tax officers below Section 197 only applies to the year mentioned in the certificate unless canceled before the end of the date mentioned in the certificate. By default, all certificates are valid from the date of issuance of certificates until March 31.
In addition, this is not a blanket and deductor certificate must make a lower TDS reduction only if the name is specifically mentioned in the certificate that will be issued in the application made for income tax officers in the form of 13.
Other relevant points about form 13 for reducing TDS nil / low
Applications in Form 13 can only be submitted for payments where TDS is needed to be deducted by section 192, section 193, section 194a, section 194C, section 194d, section 194g, part 194j, section 194j, 194k, section 194la, section 194bb, Section 194lbc , Section 194m, Section 194-O and Section 195. If payment is required to be deducted under another part of the Income Tax Act, the application in Form 13 cannot be submitted.
Lower TDS certificates / Nil will only be issued as long as the income tax officer is satisfied that the taxpayer’s revenue justifies a lower TDS reduction.
