Before the deadline for its submission, TDS must be submitted to the Income Tax Department. In case you would like to request a lower or no TDS Deduction, you must submit Form 13 under Section 197. In this post, let’s find out more about form 13 and eligibility criteria along with other information.
According to Section 197 of the IT Act of 1961, Form 13 for TDS deduction is an income tax certificate to lower TDS. The payee may submit Form 13 if they feel their income is not completely taxable in India. In some circumstances, TDS could be deducted from the recipient's income. But at the end of the year, it should be established how much overall tax they owe. The Income Tax Slab Rates determine the amount of tax due, and this tax Obligation can be lower than the TDS that was already subtracted.
When the TDS amount is more than the applicable amount while filing the Income Tax Return, the beneficiary of the income seeks a TDS Refund after the applicable TDS has been subtracted. An assessee can file an Income Tax Return (ITR) only after the Fiscal Year. The government has included Section 197 to simplify the procedure for the taxpayers. It specifies that the individual (whose TDS is being deducted) can apply to the income tax officer for a certificate for Nil/Lower TDS deduction if their total tax due for the year is less than the amount of TDS being deducted.
The income tax officer must receive a Form 13 application for Nil/Lower TDS deduction. They must give a certificate following Section 197 if they are confident that the lesser TDS deduction is appropriate.
If the recipients’ income falls under any of the following sections, they can apply to Section 197:
|193||Interest in Securities|
|194A||Other Interests than that over securities|
|194G||Prize/remuneration/commission on lotteries|
|194H||Brokerage or commission|
|194J||Fee for technical or professional services|
|194LA||Compensation for acquiring immovable properties|
|194LBB||Income over units of investment funds|
|194LBC||Income on investment in securitization trust|
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If a person's income is subject to TDS under the provisions mentioned above and the recipient's income warrants a non-deduction or a smaller deduction of income tax based on the expected final tax burden, an application can be submitted. While anyone, even corporations, can submit a Section 197 application, there are some specific income categories for which this is not the case. Individuals can also submit a self-declaration (Form 15G/Form 15H) for non-deduction of TDS.
While filling out form 13, the following details are required:
Here are the required documents for successfully completing Form 13:
Here is the entire process for filling out the form to getting it approved by the Assessing officer (AO):
Here are some other important things to bear in mind while filling out form 13:
No deadline is specified in the income-tax provision for filing an application under Section 197. However, because TDS is applied to income from the current fiscal year, it is advised to apply for the start of the fiscal year for regular revenue received throughout the year and as needed for one-time income.
The taxpayer must submit a Form 13 application to the income tax officer if they want to receive no or little TDS deduction. The Assessing officer will issue a certificate after reviewing the application and determining that the deduction is appropriate. The Assessing Officer must respond to an application for exemption from TDS requirements made in Form 13 within 30 days of the end of the month in which the completed application is received in all respects. Until the Assessing Officer cancels it, the certificate authorising a deduction under Section 197 is good for the assessment year indicated on the certificate.
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