Income Tax: Know Who Can Apply For Exemption From TDS Deduction

Under Tax Deducted at Source (TDS), a person who is liable to make a payment of specified nature to any other person deducts tax at source and remit the same into the account of the government

An individual can fill Form 13 for TDS exemption/concession with the assessing officer applicable to the assessee.

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Tax is deducted at source to make sure that when a person receives income, the tax authorities have received tax in advance. Going by the concept of the Deducted at Source, a person who is liable to make a payment of specified nature to any other person deducts tax at source and remits the same into the account of the government.

Sources of income starting from salary, interest, commission, rent, brokerage, professional fees, royalty, and others attracts TDS. It is deducted at the specified rate by the tax department.

It is important that the person who pays the assessee should deposit the TDS to the tax authorities. However, the taxpayer/assessee may not have any taxable income and this TDS deduction may pose a problem for the taxpayer.

Know how to manage TDS deduction

An individual can fill Form 13 for TDS exemption/concession with the assessing officer applicable to the assessee. Individuals can also find tax offices in certain locations that provide the option to file the application in an online format.

Check supporting documents

You will need following documents along with the signed Form 13:

IT return copies with proof for the last three financial years. Income computation for the same period as well as the current year.

Assessment orders for the last three financial years. Audit report for the same.

E-TDS return acknowledgment for the last three financial years. Estimated income and projected profit and loss account for the current financial year.

You also need to submit a copy of the PAN TAN of the parties who are going to pay the assessee.

Once the application is submitted, the same will be processed within 30 days of the end of the month in which the application is submitted.

Who can apply?

This application can be submitted by any person, corporate, HUF, individual, etc. An individual can also submit a self declaration in Form 15G or Form 15H for non-deduction of TDS.

In case you don't want to follow the above process, the taxpayer can claim a refund of the TDS at the time of filing tax return.