Updated on: Jun 2nd, 2025
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5 min read
Form 13 is an application form that taxpayers submit to the Assessing Officer of the Income Tax Department for a lower or nil TDS deduction. Some taxpayers' total tax liability is less than the amount of TDS deducted. In such cases, the deduction of TDS will leave the taxpayers with no liquidity.
For non or lower TDS deduction, they can apply for Form 13 to the Income Tax department. After examining the assessee's income, the Assessing officer will issue a certificate for various types of income for non-dedication or lower TDS deduction.
The person responsible for making the payment is entrusted with the responsibility of deducting the tax at specified rates either at the time of credit in the books or payment to the recipient, whichever is earlier, and only pays the balance amount to the recipient. This tax, deducted by the person making the payment, is called Tax Deducted at Source (TDS).
This ensures tax is collected in advance, checks tax evasion and also helps track the recipients' income. However, this scheme of deducting tax at source itself may create hardship for a few taxpayers who may not have a taxable income at all.
Form 13 under Section 197 is an application form filled out by any person or a company to request a lower or nil TDS deduction when their estimated total tax liability is less than the TDS amount deducted. This form is submitted to the Assessing Officer of the Income Tax department. When the Assessing Officer is satisfied that the assessee's income is justifiable for lower or nil TDS deduction, he issues a certificate specifying the rate of TDS to be deducted for certain types of payments, which are mentioned below in this article.
The above could result in the taxpayer not having any taxable income at all for the year. While TDS rates are determined in general considering a larger income population as a whole and income category, it might lead to undue difficulties for certain taxpayers as above who would not have any taxable income yet tax gets deducted at source for them which they end up claiming as a refund. No doubt these taxpayers are eligible for interest on such refund, funds unnecessarily get blocked till the refund is received. Moreover, they have to go through the process of filing their return to claim it (in a case where it was not otherwise mandatory for them to file it under the law). Therefore, with an objective to remove this undue hardship on such taxpayers, income tax law provides for an option to obtain a certificate from the Assessing officer confirming either a lower rate of TDS compared to the rate specified under the law or an NIL rate of TDS, depending on facts and circumstances of each case based on the application made. Section 197 governs these provisions. In this article, we will discuss provisions for applying for a certificate for a lower deduction of TDS.
An application can be made where the income of any person attracts TDS as per the below-mentioned sections, and the income of the recipient justifies non-deduction or lower deduction of income tax based on his estimated final tax liability.
Section | Income Covered Under Section 197 | Threshold limit (Rs) |
192 | Salary | Basic exemption limit |
193 | Interest on securities | 10,000 (Interest paid on debentures issued by a company in which public are substantially interested) 10,000 (Interest on 8% saving (taxable) bonds, 7.75% savings (taxable bonds), 2018, Floating rate bonds (2020)) 10,000 (6.5% Gold bonds, 1977, 7% Gold bonds, 1980) |
194 | Dividend for an individual shareholder | 10,000 |
194A | Interest other than interest on securities | 1,00,000 for senior citizen 50,000 in case of others (when payer is bank, cooperative society and post office) 10,000 in other cases |
194C | Contractors income | 30,000 for a single payment 1,00,000 for the aggregate payments per financial year |
194D | Insurance commission | 20,000 |
194G | Income by way of commission, prize etc on lottery tickets | 20,000 |
194H | Commission or brokerage | 20,000 |
194-I | Rent | 6,00,000 in a financial year |
194J | Fee for professional or technical services | 50,000 |
194K | Income in respect of units of mutual fund | 10,000 |
194LA | Income by way of enhanced compensation | 5,00,000 |
194LBB | Income in respect of units of investment fund | Nil |
194LBC | Income in respect of investment in securitization trust | Nil |
194O | Payment of certain sum by e-commerce operator to e-commerce participants | 5,00,000 (when PAN or Aadhar is furnished to the e-commerce operator) |
194M | Payment of certain sum by certain individuals or Hindu undivided family | 50,00,000 |
195 | Income of non-residents | Nil |
206C(1G) | Remittance under Liberalised Remittance Scheme (LRS) and overseas tour program package | 10,00,000 |
The income-tax provision does not provide for a deadline to make an application under Section 197. However, as TDS is made on the income of an ongoing financial year, it is advisable to make an application at the beginning of the financial year in case of regular income throughout the financial year and as and when the need arises in case of one-off income.
Section 197 is issued for a particular financial year and stands valid from the date of issue and throughout the financial year unless cancelled by the assessing officer (TDS) before the expiry.
Online applications can be made by logging in to TRACES or by registering here for taxpayers in Karnataka.
The following documents need to be submitted with Form 13:
Once the application is complete in all aspects and is submitted to the jurisdictional assessing officer (TDS), it shall be disposed of within 30 days from the end of the month in which it is received. The assessing Officer will review the documents/information submitted and may ask for further queries and documents before issuing the certificate or rejecting the application.
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