Application of Lower Deduction Certificate is made under Form 13, in cases, where the actual income tax liability on the income of the assessee is lower than the TDS which has been deducted by the payer under the relevant provisions of the tax.
An application for a lower deduction of tax under Section 197 of the Income Tax Act can be made by the recipient of income in the following categories:
✔ Non-resident Indians (NRIs)
✔ Residents but not ordinarily residents (RNORs)
✔ Foreign companies
✔ Individuals or entities receiving income from a foreign company
✔ Individuals or entities receiving income from a foreign collaborator, joint venture, or a foreign associate.
This list is not exhaustive and the eligibility for a lower deduction certificate under Section 197 may vary depending on the type of income and the jurisdiction in which the recipient is located.
According to Section 197 of the Income Tax Act, a certificate is issued for a specific financial year and remains valid from the date of issuance until the end of the financial year, unless the assessing officer (TDS) cancels it before its expiration.
