Form 13- Non Deduction/ Lower deduction of TDS

TDS is deducted to avoid  evasion of  income tax. TDS rates for deduction are provided under section 192, section 194 and 195 ( non -resident)

According to provision of Tax deduction at source ( TDS) person responsible for making the payment is entrusted with the responsibility of deducting the tax as per specified rate mention in the appropriate section at the time of credit in the books or payment to the receipt. This ensures ta is collected in advance and  such provision also help to track recipients in the future. Due to compulsory deduction it also hardship with taxpayers who may not have  taxable income in the relevant assessment.

Such type of case may be

Taxpayer has  not have taxable income during the relevant assessment.

Taxpayer has a loss for the current year.

Taxpayer is eligible to claim certain exemption.

The above mention case the taxpayer not having any tax liability on all income. While  TDS rates are will be deducted according TDS provision. If a taxpayer do  not have tax liability then need to claim refund of TDS amount. In such case it hardship with a taxpayer. Income tax law provides for an option to obtain a certificate from the assessing confirming either a lower rate of TDS compared to the  TDS rate or NIL rate of TDS

Income tax provision  made some arrangement in section 197

Following section  fall under this provision

Section 192  Income from salary

Section 193 Interest on securities

Section 194- Dividends

Section194A- Interest other than interest on securities

Section 194C- Income from contractors

Section 194 D- Insurance Commission

Section 194G Prize on lottery tickets

Section 194H Commission or brokerage

Section 194 I Rent

Section 194  J Fee for professional or technical services

Section 194 LA  Compensation on acquisition of immovable property

Section 194LBB Income in respect of units of investment fund

Section 194 LBC Income in respect of investment in securitization trust

Section 195- Income of non residents

 Who can make application under section 197

A taxpayer  whose tax liability is nil or lower

 Time line for application

During  any time of relevant assessment but it is advisable  application should be made beginning of financial year so that no TDS deducted or deducted lower rate of TDS.

Validity of an Application made under section 197

Generally one  financial year or from the date of issue to end of financial year.

 

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