Form 13 – Non-Deduction/Lower Deduction of TDS

What is form 13?

As per the provisions of the Income Tax Act, TDS is required to be deducted at the time of making any payment. In cases where such TDS is being deducted, the tax payable will be computed by first deducting the TDS and then the recipient of income claims a refund of TDS at the time of filing of his Income.

Therefore, when a taxpayer’s final tax liability is less than the amount of TDS being deducted he may file an application for Nil/ Lower deduction of TDS in Form 13 with the income tax officer where the taxpayer’s income is justified for a non-deduction or lesser deduction of income tax based on his projected final tax liability.

Income Covered Under Section 197

Application in FORM 13 can be made by the recipient of income in case of the following category of receipts where TDS is required to be made under the following Sections:

Section 192 – Salary income
Section 193 – Interest on securities
Section 194 – Dividends
Section 194A – Interest other than interest on securities
Section 194C – Contractors income
Section 194D – Insurance commission
Section 194G – Commission/remuneration/prize on lottery tickets
Section 194H – Commission or brokerage
Section 194-I – Rent
Section 194J – Fee for Professional or technical services
Section 194LA – Compensation on acquisition of immovable property
Section 194LBB – Income in respect of units of investment fund
Section 194LBC – Income in respect of investment in securitization trust
Section 195 – Income of non-residents

Procedure for filing Form 13 post registration on TRACES

Login in TRACES and under ‘My Profile Tab’, register DSC of the authorized person;
Under ‘Statements / Form’ tab select ‘Request for Form 13’.
Form 13 would be displayed and the following appropriate details need to be filled up by the applicant –
Basic details of the Company and authorized person registered on TRACES portal (The same shall be auto-populated)
Details of existing liability under Income-Tax Act;
TAN wise details of estimated income/amount to be received from parties during the subject year (for e.g. FY 2019-20) along with relevant section of TDS (e.g. Section 194C, Section 194J etc.);
Requested rate of TDS proposed by the taxpayer in respect of the estimated income;
Details of projected income of the subject year (for e.g. FY 2019-20) and immediately preceding financial year (FY 2018-19);
Details of estimated tax computation of the subject year (for e.g. FY 2019-20) and immediately preceding financial year (FY 2018-19).
Further, supporting documents are required to be uploaded which include:
Final Assessment orders for last 4 assessment years;
Details/workings for estimated income and tax computation (self attested by authorized person) ;
Audited Financial Statements of last 3 years;
Projected Balance Sheet & P/L income of the subject year (for e.g. FY 2019-20) and immediately preceding financial year (FY 2018-19) (self attested by authorized person).
Acknowledged copy(s) of TDS returns filed for last 2 financial years.
Once all the details are filled up and appropriate documents are uploaded, the applicant is required to submit the Form 13.

Validity of an application made under section 197

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.

What are the documents to be submitted for FORM 13?

Signed Form 13
Copies of return of income along with enclosures and acknowledgment for previous 3 financial years
Copies of assessment orders for previous 3 financial years
In case of assessee having business or profession income, copies of financial statement along with audit report if any for previous 3 financial years
Projected profit and loss account for the current financial year
Computation of income statement for previous 3 financial years and estimated computation for the current financial year
Copy of PAN card
Tax Deduction Account Number of all parties responsible for paying you
E-TDS return acknowledgment for previous 2 financial years
Estimated income during financial year
Any other documents depending on nature of income
TDS default earlier

The deductor, may deduct TDS at a lower rate only if his name is specifically stated in the Certificate issued in response to FORM 13 filed.

Note:

Resident individual taxpayers, HUF (Hindu Undivided Family) /any person not being firm or company are allowed to submit self-declaration in Form 15G/15H requesting not to deduct TDS on the income as their income is less than the basic exemption limit.

To know more on form 15G/15H kindly refer to our website Refer article: FORM 15G/15H @www.pkcindia.com

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