Procedure for issuance of Lower/Nil TDS Certificate

• Every finance professional are making estimated accounts of the company and based on that you can also prepare the estimated computation of total income assuming same adjustments as done for the previous year.

• Determine the expected tax liability of the company

• Determine the TDS deducted and advance tax paid till date and also determine the expected TDS on the revenue for the balance period of the financial year.

• Based on the above, review the tax payable/ refundable periodically.

• In case there is expected tax refundable for the company, the finance professional should not block this company’s fund in the hands of Income tax department for next 2-3 years and should apply for lower TDS application to the TDS department immediately.

• For applying lower TDS certificate to the TD department, following documents are required to be submitted:

1.   Covering letter disclosing nature of business of the company, reason for company should get lower TDS certificate and also details of the party with their correct address & TAN.

2.   New Form 13

3.   Estimated financials & computation of Total Income

4.   Audited financials for the last 3 Years

5.   Tax Audit Report of the Last 3 Years

6.   Income tax return acknowledgment of last 3 Years

7.   E TDS return acknowledgment for last 2 years of all the 4 quarters.

8.   In case of any short payment of TDS in last 3 years, proof of the payment of TDS.

9.   Copy of application & certificate obtained for earlier years.

• After submitting the aforesaid application to the TDS department, the AO will review your documents and they may ask further queries & documents to satisfy that your company is eligible for getting the lower TDS certificate.

• It must be noted that AO is not bound to issue TDS certificate, once the application had been filed. The AO issue the certificate based on the merit on case to case basis.

• You must provide the correct TAN of all the parties for whom you want the TDS certificate as now a days, department are issuing only system generated certificate based on the TAN.

• Further, from April 1, 2011 department are not issuing nil TDS certificate to anyone. Hence, you must apply only for lower TDS certificate only and must mention the lower rate as required.

The above ten point summary regarding the process of issuing the lower TDS certificate must be useful to all finance professional and in case of any further query or suggestion, please contact at mr_manish_ca@yahoo.com.