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TDS Section on Nil or Lower Deduction – Sec 197

Introduction to Section 197
The TDS section of 197, will allow certain taxpayers to get an exemption from TDS either at no rate or a very low rate.TDS is generally detected by the employer(Deductor) and it will be credited to the IT Department.

What if Excess TDS is detected?
If excess TDS is deducted, the taxpayer can apply for a Tax refund by filing the Income Tax return for the excess TDS detected. Allowed to apply and obtain an income tax refund by filing an income tax return for the excess TDS deducted. This can be applied via Form-13 to the Assessing Officer.

Assessing Officer:
An Assessing Officer can grant relief from TDS provisions. After Checking the evidence, If evidence abides by the rule that the currently existing and estimated tax liability of a person being lower than the number of TDS deducted, then they are eligible under section 197.

Section 197-When it can be made applicable?
Based on the Assessment made by the AO-Assessing officer, the eligibility will be determined to claim the benefits.
The Following Points can be considered for eligibility
• When the Tax payable on the estimated income of the previous year relevant to the assessment year.
• When the Tax payable on the assessed or returned income of the preceding three years.
• When the Existing liability of the person falls under the Income-tax Act, 1961 and Wealth-tax Act, 1957.
• When the Payment of advance tax for the assessment year is relevant to the previous year until the date of making the relevant application.
• When Tax deducted at source for the assessment year is relevant to the previous year until the date of making the relevant application.
• When Tax collected at source for the assessment year is relevant to the previous year until the date of making the relevant application.

Submitting the Application:
In order to fill the Form-13, the taxpayer has to download the form with furnishing the PAN Details in the Form. An individual has to file the application for Nil or lower deduction of tax online using a digital signature or electronic verification code. The assessing officer will determine the existing and estimated tax liability after seeing the assessor’s tax payable on income for the current financial year. Based on the Scenario the tax paid, Received on liability will also be assessed till last four financial years.