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Lower / Nil TDS

  • Reduces excess tax deduction at source
  • Improves cash flow throughout the year
  • Prevents refund dependency after ITR filing
  • Legally authorised reduction of TDS rates
  • Applicable to individuals, professionals, and businesses
  • Accepted by deductors and banks
  • Minimises interest and mismatch issues

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Experience Icon

7 Years

Of Experience

Cases Solved Icon

3622 +

Cases Solved

Awards Gained Icon

10 +

Awards Gained

Trusted Clients Icon

144 k +

Trusted Clients

Queries Solved Icon

36 k+

Queries Solved

Experience Icon

7 Years

Of Experience

Cases Solved Icon

3622 +

Cases Solved

Awards Gained Icon

10 +

Awards Gained

Trusted Clients Icon

144 k +

Trusted Clients

Queries Solved Icon

36 k+

Queries Solved

Experience Icon

7 Years

Of Experience

Cases Solved Icon

3622 +

Cases Solved

Awards Gained Icon

10 +

Awards Gained

Trusted Clients Icon

144 k +

Trusted Clients

Queries Solved Icon

36 k+

Queries Solved

Overview

A Lower or Nil TDS Certificate is an approval issued by the Income Tax Department under
Section 197, allowing income to be received at a reduced or zero TDS rate.

This certificate is meant for taxpayers whose:

  • • Actual tax liability is lower than the standard TDS deducted, or
  • • Total income is below taxable limits, or
  • • Advance tax and deductions already cover tax liability

Without a lower TDS certificate, tax is deducted at standard rates, leading to:

  • Blocked working capital
  • Heavy reliance on refunds
  • Cash-flow stress during the year

Who Should Apply for a Lower / Nil TDS Certificate?

This service is ideal for:
  • Professionals and consultants
  • Freelancers and contractors
  • Businesses receiving large payments
  • Commission agents
  • Rent recipients
  • Interest income earners
  • NRIs with taxable Indian income
  • Taxpayers consistently receiving refunds
If TDS deducted every year is significantly higher than final tax payable, applying for Section 197 relief is advisable.

Income Types Covered Under Section 197

Lower or Nil TDS certificates can be applied for income subject to TDS under sections such as:
  • 194J – Professional / technical fees
  • 194C – Contractor payments
  • 194I – Rent
  • 194A – Interest (non-salary)
  • 194H – Commission or brokerage
  • 195 – Payments to non-residents (case-specific)
Salary income is not covered under Section 197.

How the Lower TDS Process Works

  • Application filed online with income projections
  • Department reviews past returns, tax payments, and compliance
  • Clarifications or documents may be requested
  • Certificate issued specifying:
a. Applicable section
b. Approved TDS rate
c. Validity period
d. Deductors to whom it applies.

Once issued, deductors are legally bound to deduct tax at the approved rate.

Documents Required for Lower / Nil TDS Application

Documents
  • 1 PAN of applicant
  • 2 Previous years’ income tax returns
  • 3 Computation of income for the current year
  • 4 Estimated income and tax liability
  • 5 Details of deductors and expected receipts
  • 6 TDS details from earlier years
  • 7 Advance tax payment details (if any)
  • 8 Supporting documents for deductions or exemptions

For More Information


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2nd Floor, Sanali Estate, Abids, , Hyderabad, Telangana , 500001, IN

Consequences of Not Applying for Lower TDS

Excess TDS continues throughout the year
Refunds are received only after ITR processing
Interest on refund is limited
Working capital remains blocked
High-value income earners face liquidity issues

How We Work

Step 01

Eligibility & Refund Analysis

Step 02

Income Projection & Tax Computation

Step 03

Application Drafting & Filing

Step 04

Department Query Handling

Step 05

Post-Approval Deductor Coordination

Common Errors and Mistakes

01

Applying late in the financial year

02

Unrealistic income projections

03

Ignoring advance tax obligations

04

Not updating deductor details

05

Assuming refund eligibility guarantees approval

06

Using certificate beyond its scope or validity

Validity and Renewal

Certificate is valid only for the specified financial year
It applies only to named deductors
Renewal is required every year
Any change in income pattern must be reviewed

FAQs

Is lower TDS approval guaranteed?

No. It depends on income history, compliance, and projections.

Can NRIs apply for a lower TDS certificate?
Does the certificate apply to all deductors?
What if income increases after approval?
Can salary TDS be reduced using this certificate?

Professional Excellence in Finance.

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What Our Clients Say

Discover what our satisfied clients have to say about their experience working with us

Sandeep Reddy
Founder, Retail Trading Business
" ARK Advisors made our audit process smooth and stress-free. Clear checklist, timely follow-ups, and very practical guidance. "
Anusha Sharma
Partner, Professional Services Firm
" Their team quickly identified compliance gaps and suggested actionable fixes. Reporting was crisp and easy for management to understand. "
Rohit Kulkarni
CFO, Manufacturing Unit
" We got strong process recommendations and control improvements. The audit insights genuinely helped us reduce leakage and improve discipline. "
Meghana Rao
Director, Startup
" Professional, responsive, and very transparent. They explained everything in simple terms and kept the entire process on schedule. "
Imran Khan
Owner, Hospitality Business
" The team ensured our documentation was audit-ready and supported us throughout. Great experience and strong attention to detail. "

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