Lower tds
This query is : Resolved
21 March 2013
If a company is going to have loss as per projected computation say of Rs 12,00,000/- then how is lower tds rate calculated and tds liability is around 1,15,000 plz reply urgently
21 March 2013
dear..
as per sec. 197.. is a person thinks that his total income would be nil. or in any other case he feels that TDS should be lower deducted..
then he can make an application to the respective ITO(TDS) to grant a certificate in this respect.
as per sec. 197.. is a person thinks that his total income would be nil. or in any other case he feels that TDS should be lower deducted..
then he can make an application to the respective ITO(TDS) to grant a certificate in this respect.
21 March 2013
SO SIR THE APPLICATION WOULD ASK THE AO TO GRANT 0 % TDS AS NO TAX WILL BE PAID CAN U PROOVIDE ME WITH INFO ON HOW TO COMPUTE THE PROCEDURE AT WHICH LOWER TDS IS CALCULATED
03 August 2024
To apply for a lower TDS (Tax Deducted at Source) rate or even a 0% TDS rate, given that a company is projected to have a loss and thus no tax liability, you need to follow a specific procedure. Here’s how to calculate and apply for a lower or zero TDS rate based on projected loss:
### Steps for Applying for Lower or Zero TDS Rate
1. **Compute the Projected Tax Liability:**
- **Determine Losses:** Calculate the projected loss, which in your case is ₹12,00,000.
- **Estimate Tax Liability:** Since the company is expected to have a loss, its tax liability might be zero.
2. **Calculate TDS Liability:**
- If the company has no taxable income due to the projected loss, its tax liability is effectively zero. Hence, the TDS liability that would normally apply (₹1,15,000) can be requested to be reduced to 0%.
3. **Prepare Documentation:**
- **Form 13:** Complete Form 13 for requesting a lower TDS rate. In the form, you will provide details of your projected loss and explain why you should not have TDS deducted or should have it deducted at a lower rate.
- **Supporting Documents:** Include projections of your financial statements, tax computation, and any other relevant documents that support the claim of zero tax liability. This could include detailed profit and loss projections, balance sheets, and any other relevant financial statements.
4. **Submit Application:**
- **Online Submission:** You can submit Form 13 online through the Income Tax e-filing portal:
- Log in to the Income Tax e-filing portal.
- Navigate to the ‘e-File’ menu and select ‘Income Tax Forms’.
- Choose ‘Form 13’ and complete the form with accurate details.
- **Physical Submission:** Alternatively, you can submit Form 13 to your local Assessing Officer (AO).
5. **Receive Certificate:**
- **Processing Time:** The time required to receive the certificate can vary but typically ranges from a few days to a few weeks.
- **Certificate Issuance:** Once the application is processed, you will receive a Lower Deduction Certificate indicating the TDS rate (possibly 0% if no tax liability).
6. **Provide Certificate to Deductor:**
- **Submission:** After receiving the certificate, submit it to the deductor (e.g., clients, customers) so they can apply the reduced or zero TDS rate.
### Key Points to Consider
- **Accurate Projections:** Ensure that your projected loss and tax calculations are accurate and realistic. Inaccurate projections could lead to rejection of the application or issues with compliance.
- **Document Submission:** Attach all relevant documents that substantiate your claim for a lower or zero TDS rate.
- **Follow-up:** Regularly follow up with the Income Tax Department or your Assessing Officer to check the status of your application.
### Sample Calculation for Zero TDS
Given:
- **Projected Loss:** ₹12,00,000
- **Projected Tax Liability:** ₹0 (since there is a loss)
**Application for Zero TDS:**
In Form 13, you would indicate that based on your financial projections, the company will have a zero tax liability. Therefore, you request that TDS be reduced to 0% on the basis of these projections.
### Summary
- **Compute:** Verify the projected loss and tax liability.
- **Prepare:** Fill out Form 13 and gather supporting documents.
- **Submit:** Submit Form 13 online or physically to your Assessing Officer.
- **Follow-up:** Track the status and provide the lower TDS certificate to the deductor.
This process ensures that you apply for a lower or zero TDS rate effectively while adhering to regulatory requirements.
### Steps for Applying for Lower or Zero TDS Rate
1. **Compute the Projected Tax Liability:**
- **Determine Losses:** Calculate the projected loss, which in your case is ₹12,00,000.
- **Estimate Tax Liability:** Since the company is expected to have a loss, its tax liability might be zero.
2. **Calculate TDS Liability:**
- If the company has no taxable income due to the projected loss, its tax liability is effectively zero. Hence, the TDS liability that would normally apply (₹1,15,000) can be requested to be reduced to 0%.
3. **Prepare Documentation:**
- **Form 13:** Complete Form 13 for requesting a lower TDS rate. In the form, you will provide details of your projected loss and explain why you should not have TDS deducted or should have it deducted at a lower rate.
- **Supporting Documents:** Include projections of your financial statements, tax computation, and any other relevant documents that support the claim of zero tax liability. This could include detailed profit and loss projections, balance sheets, and any other relevant financial statements.
4. **Submit Application:**
- **Online Submission:** You can submit Form 13 online through the Income Tax e-filing portal:
- Log in to the Income Tax e-filing portal.
- Navigate to the ‘e-File’ menu and select ‘Income Tax Forms’.
- Choose ‘Form 13’ and complete the form with accurate details.
- **Physical Submission:** Alternatively, you can submit Form 13 to your local Assessing Officer (AO).
5. **Receive Certificate:**
- **Processing Time:** The time required to receive the certificate can vary but typically ranges from a few days to a few weeks.
- **Certificate Issuance:** Once the application is processed, you will receive a Lower Deduction Certificate indicating the TDS rate (possibly 0% if no tax liability).
6. **Provide Certificate to Deductor:**
- **Submission:** After receiving the certificate, submit it to the deductor (e.g., clients, customers) so they can apply the reduced or zero TDS rate.
### Key Points to Consider
- **Accurate Projections:** Ensure that your projected loss and tax calculations are accurate and realistic. Inaccurate projections could lead to rejection of the application or issues with compliance.
- **Document Submission:** Attach all relevant documents that substantiate your claim for a lower or zero TDS rate.
- **Follow-up:** Regularly follow up with the Income Tax Department or your Assessing Officer to check the status of your application.
### Sample Calculation for Zero TDS
Given:
- **Projected Loss:** ₹12,00,000
- **Projected Tax Liability:** ₹0 (since there is a loss)
**Application for Zero TDS:**
In Form 13, you would indicate that based on your financial projections, the company will have a zero tax liability. Therefore, you request that TDS be reduced to 0% on the basis of these projections.
### Summary
- **Compute:** Verify the projected loss and tax liability.
- **Prepare:** Fill out Form 13 and gather supporting documents.
- **Submit:** Submit Form 13 online or physically to your Assessing Officer.
- **Follow-up:** Track the status and provide the lower TDS certificate to the deductor.
This process ensures that you apply for a lower or zero TDS rate effectively while adhering to regulatory requirements.
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