CMA Ramesh Krishnan
Quick Summary
The concept of TDS under the Income Tax Act is common and the objective of this concept isto collect tax from the very source of income. As per the TDS concept, a person (deductor) who is liable to make payment of specified nature to any other person (deductee) shall deduct tax at source and remit
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FAQ :
TDS (Tax Deducted at Source) is a mechanism for the government to collect tax from the income's origin. Excess tax deduction can occur when the prescribed TDS rate is higher than the actual income tax payable by the recipient.
A lower or no tax deduction certificate, issued under Section 197 of the Income Tax Act, allows a taxpayer to have tax deducted at a rate lower than the standard rate, or no tax deducted at all, if their income justifies it.
You can apply for this certificate by filling out Form 13 and submitting it online through the TRACES portal. The application should be made before the start of the previous year, though it can be submitted anytime before the year ends.
Required documents include audited or provisional financials for the two preceding years, projected financials for the current year, income computation details for the last four assessment years, and customer-wise details with projected income and applicable TDS sections.
No, the certificate is always effective from a prospective date, not retrospectively. It is also valid only for the specific period and income limit mentioned on the certificate for each deductor.
Before applying, you must ensure that there are no pending tax demands, including any defaults related to TDS.
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