TDS Deduction: Save Yourself from Extra TDS by Submitting Form-13 – Complete Guide

TDS Deduction Update: Are you troubled by the excess TDS deduction on your income despite your tax liability being lower? If yes, then filling Form-13 under the Income Tax Act-1961 can be a great solution for you. The Income Tax Department has introduced Form-13 for FY 2025-26, allowing taxpayers to request lower or zero TDS deduction on their income. By applying for Form-13, you can avoid the hassle of tax refunds and ensure that only the required TDS is deducted from your income.

If TDS (Tax Deducted at Source) is being deducted excessively from your salary, interest, or dividend income, then submitting Form-13 will prevent additional tax deduction. This form is especially beneficial for salaried individuals, senior citizens, professionals, and business owners whose actual tax liability is less than the TDS being deducted.

✅ What is Form-13 and Why is it Important?

Understanding Form-13

Form-13 is a deduction application form issued under Section 197 of the Income Tax Act-1961. It allows individuals to request their employer, bank, company, or financial institution to deduct TDS at a lower or nil rate if their actual tax liability is less than the standard TDS deduction.

Why Should You Fill Form-13?

In many cases, TDS is deducted at a higher rate even if your total tax liability is lower. This results in a cash flow shortage and later you have to claim a refund from the Income Tax Department. To avoid this hassle, Form-13 provides the option to reduce or nullify TDS deductions, allowing you to receive higher net income monthly.

✅ Who Should Apply for Form-13?

The Income Tax Department has defined specific categories of people who are eligible to apply for Form-13. If you fall under any of these categories, you can easily apply to reduce your TDS deduction:

Eligible Individuals for Form-13:

✅ Why is Additional TDS Deducted?

Many times, banks, employers, companies, or financial institutions deduct TDS at a fixed percentage based on Income Tax Act norms, irrespective of the actual tax liability of the taxpayer. This causes unnecessary deductions, impacting the taxpayer’s monthly cash flow.

For example:

• If you invest in Fixed Deposits (FDs) and your annual interest income exceeds ₹40,000 (₹50,000 for senior citizens), the bank deducts 10% TDS, irrespective of your final tax liability.
• Similarly, dividends, professional payments, or rental income are also subject to TDS deductions even if your final tax is significantly lower.

To avoid this additional TDS deduction, you can simply fill Form-13 and request the Income Tax Department to allow lower or nil TDS deduction.

✅ How to Fill Form-13 Online for Lower/Nil TDS Deduction

The Income Tax Department has made it easy for taxpayers to apply for Form-13 through their official portal. Here’s the step-by-step process to fill Form-13 online:

Step 1: Visit the Income Tax e-Filing Portal

• Go to the official Income Tax Department portal: https://www.incometax.gov.in/iec/foportal
• Login using your PAN, password, and captcha.

Step 2: Apply for Lower/Nil TDS Deduction

• After logging in, go to ‘e-File’ Section.
• Under the ‘Forms’ section, click on Form-13 (Application for Lower Deduction/Nil Deduction).

Step 3: Fill Your Income Details

• Mention your source of income such as:
  • Salary Income
  • Interest from Bank FD
  • Dividend Income
  • Rental Income
  • Professional Income

Step 4: Upload Supporting Documents

Upload the following documents to support your claim:

• ✅ Income Tax Return (ITR) of the last 3 years.
• ✅ Bank Statements showing your annual interest income.
• ✅ Form-16 (for salaried employees).
• ✅ Rental Agreements (for rent income).
• ✅ Any other supporting document.

Step 5: Submit and Track Your Application

• Once you submit the form, your application will be sent to the Income Tax Officer.
• If everything is verified, the department will issue a Lower/Nil TDS Deduction Certificate within 2-4 weeks.
• You need to submit this certificate to your employer, bank, or company to stop the additional TDS deduction.

✅ What is the Last Date to Submit Form-13?

The Income Tax Department has set a deadline for submitting Form-13 to ensure you get the benefit for the financial year 2025-26.

💡 Pro Tip: If you apply before March 15, 2025, you can avoid higher TDS deduction for the current financial year.

✅ Benefits of Filling Form-13

Filing Form-13 comes with several benefits for taxpayers, especially those with minimal tax liability. Here are some key advantages:

✔ 1. Avoid Higher TDS Deduction

If your tax liability is low, filing Form-13 will ensure less or no TDS deduction from your income.

✔ 2. Improved Cash Flow

By reducing unnecessary TDS deductions, you will have more cash in hand for personal use or investment.

✔ 3. No Need for Tax Refunds

Most people face the hassle of tax refunds at the end of the financial year. Form-13 eliminates the need for refunds.

✔ 4. Quick Online Process

The application process is completely online and the certificate is issued within 2-4 weeks.

✔ 5. Better Tax Management

You can manage your annual tax payments more efficiently without worrying about excess TDS deductions.

✅ Conclusion

Filing Form-13 is an excellent solution for taxpayers who are facing higher TDS deductions despite lower tax liability. Whether you earn from salary, FD interest, rental income, dividends, or professional fees, Form-13 ensures that your TDS deduction remains lower as per your actual tax liability.

👉 Don’t wait! If extra TDS is being deducted from your income, apply for Form-13 today and avoid unnecessary tax deductions.