Section 197 Certificate or Lower Deduction Certificate for NRIs and Indians?

Section 197 certificate, also known as the lower deduction certificate, is issued by an Assessing officer. It allows an individual to claim reduced or zero TDS on several payments, such as interest, rent, or professional fees.

Any taxpayer, including an NRI, whose estimated tax liability is less than the TDS amount that needs to be deducted, can apply for a Section 197 certificate. To do the same, you need to submit Form 13 to the assessing officer (AO).

Yes, NRIs who are receiving India-sourced income, like rent, NRO interest, consultancy fees, etc., can claim a NIL or reduced TDS under this section.

In Form 13, you need to provide several information, such as income type, estimated income, previous tax returns, TAN/PAN, etc.

The Section 197 certificate remains valid untill 31st of March of the ongoing financial year or untill it is clearly cancelled.