How to Validate Certificate u/s 197?

By Mohammed S Chokhawala

Updated on: Oct 14th, 2024

1 min read

Section 197 of the Income Tax Act, 1961 provides for the facility of NIL deduction of tax at deduction at a Lower rate of tax. To avail of this benefit, the assessee whose TDS is likely to be deducted on certain receipts should make an application before the TDS Assessing Officer who has a jurisdiction over his/ her/ its case.

The deductee concerned may apply for a certificate for Nil or lower deduction of TDS on their receipts in Form No 13. Once the certificate received by deductee, he/she/it can submit to Deductor to deduct the TDS at NIL rate or lower rate. Deductor has to give this certificate details while filing TDS return and has to validate before filing. 197 certificate should be of 10 digit alpha & numeric number. Ex. 1234AAAA45A1.

How to Validate the Certificate u/s 197

Step 1: Login to TRACES as a Deductor with register User ID and Password. If you have not registered, you can read this guide to get registration procedure. The welcome page will be displayed.

Step 2: Click on “Statements/Payments” the second tab and select “197 Certificate Validation”.

Step 3: Enter 10 digit certificate number, PAN of the deductee and select “Financial Year”.

It will display all the details of Certificate. Number, Financial year, Valid period, TDS rate, Section code, Amount consumed etc.

That’s it! Now you can check the valid date, amount consumed whether the limit is crossed.

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Frequently Asked Questions

Who is eligible to apply under Section 197 of Income Tax Act?

Individuals whose anticipated annual income falls below the taxable threshold or whose calculated tax obligation, factoring in deductions and exemptions, is anticipated to be lower than the applicable Tax Deducted at Source (TDS) rate, are eligible for this provision. This encompasses salaried workers, independent contractors, practitioners, and enterprises earning income subject to TDS, such as interest, rental proceeds, commissions, or professional charges. Qualification necessitates demonstrating that the projected tax liability for the fiscal year is inferior to the TDS amount deducted at the standard rate, warranting a reduction or exemption from TDS deduction altogether.

What is the validity for Certificate issued under Section 197?

A Section 197 certificate, granting reduced or zero Tax Deduction at Source (TDS), typically lapses within the fiscal year of its issuance. Validity extends from the date of issuance until March 31st, the conclusion of the Indian financial year. To continue availing of reduced or nil TDS deduction in the subsequent financial year, a fresh application and certification process are requisite. Should the circumstances justifying the reduced or zero TDS deduction persist into the new financial year, taxpayers are advised to promptly initiate the renewal process.

About the Author

Mohammed S Chokhawala

Content Writer

I'm a chartered accountant, well-versed in the ins and outs of income tax, GST, and keeping the books balanced. Numbers are my thing, I can sift through financial statements and tax codes with the best of them. But there's another side to me – a side that thrives on words, not figures. Read more

Quick Summary

Section 197 of the Income Tax Act allows for NIL deduction of tax or a lower rate of tax by submitting a certificate (Form No 13) to the TDS Assessing Officer. Deductees can apply for this certificate to enable the Deductor to deduct TDS at NIL or a lower rate. To validate the certificate, log in to TRACES as the Deductor, enter the 10-digit certificate number and PAN of the deductee, and select the Financial Year.