Form 13 regarding

Hi Ravi,

In the scenario you described:

• The deductor paid the consideration in Q1 with TDS deducted at 1% and remitted under his TAN.

• Later, in Q2, the AO issued a lower deduction certificate (Form 13) allowing 1% deduction.

Key points:

• Since the TDS was deducted and deposited at 1% in Q1 itself (the quarter when payment happened), the deductor has already complied with the lower deduction certificate (LDC) rate.

• The LDC issued in Q2 applies from the date of issue or as specified in the certificate, but since the deductor has already deducted tax at the prescribed lower rate (1%) from Q1, there is no additional TDS to deduct or adjust for Q2.

Filing TDS Statements:

• The deductor must file the TDS return for Q1 reflecting the payment and TDS deducted at 1% under his TAN.

• For Q2, if no further payment is made to the non-resident, no TDS is deductible or payable.

• If the LDC applies to payments made after issuance, the deductor should deduct tax as per the certificate for those subsequent payments and report in the respective quarter's TDS statement.

Summary:

• File the TDS return for Q1 reflecting the 1% TDS deduction.

• No adjustment or separate reporting is needed in Q2 for the earlier payment.

• Future payments (if any) after issuance of the LDC are to be reported in the relevant quarter.

If the deductor remitted TDS for Q1 correctly as per the certificate (or 1% as applicable), compliance is complete.