Banks, companies, employers, and other institutions deduct TDS at the rates prescribed under the Income Tax Act, 1961, even if the total tax liability of the taxpayer is not that high. If excessive TDS is being deducted on your income, then filing Form-13 can be a good solution.
What is Form-13?
Form-13 is a special provision under the Income Tax Act, 1961, that allows taxpayers to apply for lower or zero TDS deduction. By submitting this form, taxpayers can request that TDS be deducted in the correct proportion on their income sources, thereby avoiding excess deductions. This form is particularly beneficial for those receiving income from bank interest, dividends, rental income, and other sources where tax liability is low or nil.
Who Should File Form-13?
- Salaried employees whose total tax liability is less than the TDS deducted.
- Senior citizens whose income comes from pension, interest, or rent.
- Individuals receiving income from rent, dividends, or other investment sources.
- Business owners and freelance professionals who want to reduce TDS on their annual income.
- Individuals whose income is primarily from investments but want to avoid excessive TDS deductions.
Important Dates to File Form-13
- The last date to apply for the current financial year 2024-25 is March 15, 2025.
- The application process for the financial year 2025-26 has already started.
Process to Fill Form-13
Check Eligibility: Ensure that your income falls under the category eligible for lower or nil TDS deduction.
Apply Online: Log in to the Income Tax Department portal and fill out Form-13.
Submit Documents: Upload necessary documents such as past income tax returns, bank statements, and income certificates.
Receive Certificate: The Income Tax Department will review the application and issue a certificate.
Submit to Employer/Bank: Provide this certificate to your employer, bank, or financial institution to ensure correct TDS deduction.
Applicable Income Sources
- Salary
- Interest on securities
- Dividends
- Bank interest
- Contractual income
- Commission income
- Rental income
- Professional service payments
- Non-resident Indian (NRI) income
How to Apply Online
Visit the official Income Tax Department portal:
Log in to your account and click on Form-13 for Lower/Nil Deduction of TDS.
Fill in the required details, including income sources and expected tax liability.
Upload necessary documents (last three years' ITR, bank statements, employer certificate, etc.).
Submit your application and wait for the department to process and issue the certificate.
Benefits of Filing Form-13
Avoid Excess TDS Deduction: Ensures that only the necessary amount of tax is deducted at source.
Better Cash Flow Management: More available cash for monthly expenses and financial planning.
No Need for Refund Applications: Eliminates the hassle of claiming excess TDS as a refund later.
Fast and Efficient Process: Online applications are processed within a few weeks.
Simplifies Personal Tax Planning: Helps in efficient tax management and financial planning.
By proactively filing Form-13, taxpayers can ensure that their TDS deductions are in alignment with their actual tax liability, leading to better financial management and reduced tax-related hassles.
