Section 197 Lower TDS Eligibility Checker
See instantly whether you can apply for a lower or nil TDS certificate — compare the tax you actually owe with the TDS being deducted, and find how much cashflow you'd unlock.
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Section 197 assessment
Form 13Let a CA file your Form 13 on TRACES
We compute your projected income, draft the application and get the lower / nil TDS certificate issued.
Disclaimer: Indicative eligibility guide only. Actual issue of a Section 197 certificate is at the discretion of the Assessing Officer based on your projected income, past returns and TDS history. Not tax advice.
What is a Section 197 lower / nil TDS certificate?
TDS is deducted at flat rates on your gross receipts — regardless of your actual tax liability. For low-margin businesses, loss-making firms, NRIs selling property, or anyone whose real tax is far below the TDS rate, this locks up money that you can only recover as a refund after filing your return, months later. Section 197 of the Income-tax Act lets you apply in advance — using Form 13 on the TRACES portal — for a certificate authorising the payer to deduct TDS at a lower rate, or not at all, matching your genuine tax liability.
File Form 13
Log in to TRACES, submit Form 13 with your projected income, expected receipts and computation of estimated tax for the year.
AO reviews
The jurisdictional Assessing Officer examines your past ITRs, TDS history and the projection, then fixes a lower rate (or nil).
Certificate issued
A certificate under Sec 197 is generated on TRACES specifying the rate and validity — usually for the financial year.
Give to deductor
Share the certificate with the payer, who then deducts TDS at the certified rate on payments made during the validity period.
Which sections does Section 197 cover?
A lower / nil deduction certificate can be sought against most TDS provisions. The common ones — with the normal rate applied before you obtain a certificate — are below.
| Section | Applies to | Normal rate |
|---|---|---|
| 192 | Salary | Slab |
| 194A | Interest (other than securities) | 10% |
| 194C | Contractor / sub-contractor payments | 1% / 2% |
| 194H | Commission or brokerage | 2% |
| 194I | Rent — plant / building | 2% / 10% |
| 194J | Professional / technical fees | 10% |
| 195 | Payments to non-residents (e.g. NRI property sale) | Up to ~23% |
When are you eligible — worked examples
Eligibility, in essence, is simple: if the TDS being deducted is more than the tax you'll actually owe, the excess would sit with the department until refund — so a lower / nil certificate makes sense.
Key terms explained
Form 13
The prescribed application for a lower / nil TDS certificate, filed online on TRACES. You attach projected income, computation of estimated tax and details of the deductors and sections involved.
TRACES
The TDS Reconciliation Analysis and Correction Enabling System — the income-tax portal where deductees file Form 13 and where the issued Section 197 certificate is generated and verified by deductors.
Certificate validity
A Section 197 certificate is usually valid for the financial year (or part of it) and lapses at year-end. It must be renewed each year, and cannot be applied retrospectively to TDS already deducted.
Section 195 — NRI use
The most common real-world use: an NRI selling Indian property faces TDS on the full sale value, though tax is due only on the capital gain. A Sec 197 certificate lowers TDS to the actual gains tax, freeing large sums.
Questions people ask
Short answers on Lower TDS Certificate (197). Tap a question to open it.
01What is a section 197 certificate?
An order from the assessing officer directing the payer to deduct TDS at a lower rate, or not at all, because the recipient's actual tax liability is lower than the standard TDS would be. It is applied for in Form 13 on the TRACES portal.
02Who typically needs one?
Loss-making businesses, entities with large carried-forward losses, NRIs selling property where TDS under section 195 far exceeds the actual capital gains tax, and businesses with thin margins where TDS on gross receipts exceeds the tax on profit.
03How long does it take and how long is it valid?
Applications are usually processed within a few weeks where the record is clean. The certificate is valid for the financial year specified, or a shorter period, and only for the payers named in it.
04Can I apply after the TDS has been deducted?
No. A certificate operates prospectively from the date of issue. TDS already deducted can only be recovered as a refund by filing a return, which is why NRIs selling property should apply well before the sale is completed.
05What is the difference between section 197 and Form 15G/15H?
Forms 15G and 15H are self-declarations available only to residents whose total income is below the taxable limit, for specified incomes. A section 197 certificate is an officer's order, available to residents and non-residents alike, and can cover any TDS section.
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Disclaimer: This tool gives indicative results for general guidance only and is not professional advice. Please verify with a qualified CA before acting on the numbers.