20 May 2016
nder section 197(1) of the Income Tax Act, 1961, a person who is in receipt of any income on which tax is required to be deducted at source at the rates prescribed under the provisions of sections 192, 193, 194, 194A, 194C, 194D, 194G, 194H, 194I, 194J, 194K, 194LA and 195, can make an application in Form No. 13 to the Income Tax Assessing Officer for issue of a certificate for deduction of TDS at rates lower than prescribed.
If the Assessing Officer is satisfied that existing and estimated tax liability on the total income of the applicant justifies the deduction at lower rates or at no deduction at all, he/she may issue such certificate.
When the recipient furnishes such certificate to the person responsible for paying the income, the payer, until the certificate is revoked/cancelled by the Assessing Officer, shall deduct tax as per rates / deduct no tax as specified in the certificate.
Rule 28AA of the Income tax Rules, 1962, prescribes the rules to be observed in this regard. Sub Rule (2) provides that the existing and estimated tax liability shall be determined by the Assessing officer after taking into the consideration, the following:
1. tax payable on estimated income of the previous year relevant to the assessment year 2. tax payable on the assessed or returned income, as the case may be, of the last three previous years. 3. existing liability under Income Tax Act, 1961 and Wealth tax Act, 1957 4. advance tax payment for the assessment year relevant to the previous year till the date of the making application. 5. tax deducted at source/tax collected at source for the assessment year relevant to the previous year till the date of the making application.
The certificate can be issued for part of or complete previous year. Sub Rule (3) provides that the certificate issued by the Assessing Officer shall be valid for such period of the previous year as specified unless cancelled before the expiry of such period. you have to visit your area income tax office for that.
14 July 2024
Form LDC, which stands for Lower Deduction Certificate, is used to apply for a certificate from the Income Tax Department that allows for a lower rate of deduction of tax at source (TDS) on payments made to you. Here's how you can fill and obtain Form LDC:
### Steps to Fill Form LDC:
1. **Obtain Form LDC:** - You can download Form LDC from the official website of the Income Tax Department of India or the TDS Reconciliation Analysis and Correction Enabling System (TRACES) portal.
2. **Fill Out the Form:** - Fill in all the required details accurately. The form typically requires information such as your PAN (Permanent Account Number), details of the deductor (the entity deducting TDS), nature of income, estimated income for the relevant period, reasons for seeking lower deduction, etc.
3. **Attach Supporting Documents:** - Depending on the nature of income for which you are seeking lower deduction, you may need to attach supporting documents. For example, if it's for professional fees, you might need to attach invoices or contracts.
4. **Submit the Form:** - Submit the filled and signed Form LDC along with the supporting documents to the Income Tax Assessing Officer (AO) or the Tax Deduction and Collection Account Number (TAN) registration office of the deductor.
5. **Verification and Approval:** - The Assessing Officer will verify the details provided and may issue a Lower Deduction Certificate if satisfied with the justification provided.
### Important Points to Note:
- **Validity:** Form LDC is generally valid for one financial year. - **Renewal:** You may need to apply for renewal of Form LDC each year if the lower deduction is required beyond the current financial year. - **Online Submission:** Some jurisdictions allow for online submission of Form LDC through the TRACES portal. Check with your tax authority for specific procedures.
### Where to Obtain Form LDC:
You can download Form LDC and find more information regarding its submission from the official Income Tax Department website (https://www.incometaxindia.gov.in) or from the TRACES portal (https://www.tdscpc.gov.in).
### Additional Tips:
- It's advisable to consult with a tax professional or chartered accountant to ensure all requirements are met and to maximize the chances of approval for a lower deduction certificate. - Keep copies of all documents submitted for your records.
By following these steps and guidelines, you can correctly fill out and submit Form LDC to obtain a lower deduction certificate for TDS purposes.
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