All About Income Tax Form 13

According to the income tax Act rules, Tax Deduction at Source (TDS) must be subtracted at the time of any payment. Payment recipients are required to withhold TDS.

Before the deadline for its submission, TDS must be submitted to the Income Tax Department. In case you would like to request a lower or no TDS Deduction, you must submit Form 13 under Section 197. In this post, let’s find out more about form 13 and eligibility criteria along with other information.

What is Form 13 TDS?

According to Section 197 of the IT Act of 1961, Form 13 for TDS deduction is an income tax certificate to lower TDS. The payee may submit Form 13 if they feel their income is not completely taxable in India. In some circumstances, TDS could be deducted from the recipient's income. But at the end of the year, it should be established how much overall tax they owe. The Income Tax Slab Rates determine the amount of tax due, and this tax Obligation can be lower than the TDS that was already subtracted.

When the TDS amount is more than the applicable amount while filing the Income Tax Return, the beneficiary of the income seeks a TDS Refund after the applicable TDS has been subtracted. An assessee can file an Income Tax Return (ITR) only after the Fiscal Year. The government has included Section 197 to simplify the procedure for the taxpayers. It specifies that the individual (whose TDS is being deducted) can apply to the income tax officer for a certificate for Nil/Lower TDS deduction if their total tax due for the year is less than the amount of TDS being deducted.

The income tax officer must receive a Form 13 application for Nil/Lower TDS deduction. They must give a certificate following Section 197 if they are confident that the lesser TDS deduction is appropriate.

Incomes Under Section 197

If the recipients’ income falls under any of the following sections, they can apply to Section 197:

Eligibility for Filing Form 13

If a person's income is subject to TDS under the provisions mentioned above and the recipient's income warrants a non-deduction or a smaller deduction of income tax based on the expected final tax burden, an application can be submitted. While anyone, even corporations, can submit a Section 197 application, there are some specific income categories for which this is not the case. Individuals can also submit a self-declaration (Form 15G/Form 15H) for non-deduction of TDS.

Details Required to Fill Form 13

While filling out form 13, the following details are required:

• Name and PAN
• Last 3 years' income and current year's projected income
• Details about why the payment is received
• Tax deduction for the current year
• Tax payments for the past 3 years
• Email
• Contact number
• Estimated Tax Liability for the current year

Documents Required to Fill Form 13

Here are the required documents for successfully completing Form 13:

• Signed Form 13
• Copies of financial statements and audit reports for the past 3 years for professional or business income
• Copies of the Income statement for the past 3 years and estimated computation for the current year
• Copies of Income returns, assessment orders, and acknowledgements for the past 3 years
• Current financial year's projected profit and loss statements
• PAN Card
• Past 2 years' E-TDS return statements
• Tax deduction account details for the payers
• Other documents relatable to the income type
• Details of previous TDS defaults (if any)

Procedures for Filling Form 13

Here is the entire process for filling out the form to getting it approved by the Assessing officer (AO):

• The AO must receive an application for nil/lower TDS deduction using form 13 before granting permission. This Form 13 can be submitted manually or online
• Mumbai, Tamil Nadu, and Karnataka regions have permitted online Form 13 filing to expedite the processing of requests for lower/nil source tax deduction certifications under Section 197(1) of the Income Tax Act of 1961
• It is advised that taxpayers first submit accurate and complete information needed to process the application
• If the application meets the AO's requirements, they will process the certificate's issuance
• The deductor can utilise a copy of this certificate, which can be attached to the invoice they were provided, to support the lesser tax deduction

Process of fill form 13 online

• Visit the official TRACES portal, which is https://contents.tdscpc.gov.in/en/home.html
• From the left side menu, choose the ‘Login’ option if you have already registered on this portal or go with ‘Register as New User’ if you are visiting here for the first time
• Once done, choose "Request for Form 13" from the "Statements / Form" page. Form 13 will then be presented, and you must fill necessary information
• Once all the information has been entered, and the necessary documents have been submitted, you must submit Form 13 using either a digital signature or an Electronic Verification Code (EVC)

Process to fill from 13 manually

• An application can be sent manually to the AO in cases where online applications are not allowed. For this, you will have to download Form 13 and fill it out accordingly
• You must mail or post the form to the required TDS AO
• Since the certificate will be generated automatically, the signature is not necessary

Points to Remember

Here are some other important things to bear in mind while filling out form 13:

• Unless it is cancelled or the date specified over the certificate has expired, the certificate is only good for the assessment year specified in the certificate
• The maximum income allowed is stated in the certificate for the relevant deductor
• An alternate method of obtaining your money does not require tax withholding. You must submit Form 15G or 15H for this
• Bank Fixed Deposit holders can file a declaration known as Form 15G. This makes sure that their interest income is not subject to TDS. However, the assessee cannot be under 60 years old or under hindu undivided family (HUF)
• Assesses who are above 60 years old must submit a self-declaration using Form 15H. Additionally, there must be no tax burden at all. No tax is withheld at the source when income is paid to such an assesses

Timeline to Fill the Form

No deadline is specified in the income-tax provision for filing an application under Section 197. However, because TDS is applied to income from the current fiscal year, it is advised to apply for the start of the fiscal year for regular revenue received throughout the year and as needed for one-time income.

Conclusion

The taxpayer must submit a Form 13 application to the income tax officer if they want to receive no or little TDS deduction. The Assessing officer will issue a certificate after reviewing the application and determining that the deduction is appropriate. The Assessing Officer must respond to an application for exemption from TDS requirements made in Form 13 within 30 days of the end of the month in which the completed application is received in all respects. Until the Assessing Officer cancels it, the certificate authorising a deduction under Section 197 is good for the assessment year indicated on the certificate.