Finance

TDS Deduction: Avoid Additional Deduction by Filing Form-13

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.  Taxpayers can request that TDS be deducted in proportion to their income sources by submitting this form, thereby avoiding excessive 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 ought to submit 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 who want to limit their TDS deductions but rely primarily on investments.

Important Filing Dates for Form 13

• The application deadline for the upcoming fiscal year 2024-2025 is March 15, 2025. • The application process for the 2025-26 fiscal year has already begun.

Process to Fill Form-13

• Verify Eligibility: Check to see if your income qualifies for a lower or no 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.

Suitable Sources of Income

  •Salary

 • interest on Securities

• Dividends

 • Banks 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.

 • Provide the necessary information, such as sources of income and anticipated tax obligations. 

•  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

 • Prevent Excess TDS Deduction: This method ensures that only the necessary tax is deducted at the 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.

 • Process that is quick and efficient: online applications are processed in a few weeks.

 • Facilitates effective tax management and financial planning; simplifies personal tax 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.