Sunday, March 10, 2024

Simple Guide to Getting a Lower TDS Certificate through TRACES

Dealing with taxes can sometimes feel like navigating through a dense forest without a map. If you're looking to get a certificate for lower tax deduction at source (TDS) under section 197 of the Income Tax Act, 1961, this guide is your compass. We'll walk you through the process step-by-step, using simple language. Let’s get started!

First, Sign Up on TRACES:

TRACES stands for TDS Reconciliation Analysis and Correction Enabling System. It’s the place where you need to start. Here’s how:

  1. Go to the TRACES website: Open your web browser and visit
  2. Become a New User: Click on the "Login" button and choose the "Register as New User" option.
  3. Pick ‘Taxpayer’: You’ll see a drop-down list; select "Taxpayer" from it.
  4. Fill in the Form: Once you click “Proceed”, a registration form will pop up. Fill it with the necessary information.
  5. Submit and You’re Done: After submitting the form, your registration on TRACES is complete.

Next, Apply for Form 13 on TRACES:

After registering, you need to apply for Form 13. Here’s what to do:

  1. Log In and Set Up: Log into TRACES. Go to ‘My Profile Tab’ and register the Digital Signature Certificate (DSC) of the authorized person.
  2. Request Form 13: Click on the ‘Statements / Form’ tab and select ‘Request for Form 13’.
  3. Fill in Details in Form 13: You need to enter various details like:
    • Basic company and authorized person details (this should fill in automatically).
    • Your income details and the TDS section applicable (like Section 194C, 194J, etc.).
    • The TDS rate you are proposing.
    • Income details for the current and last financial year.
    • Your estimated tax computations.
  4. Upload Documents: You will need to upload several documents, including:
    • Final Assessment orders of the last 4 years.
    • Estimated income and tax computation details.
    • Audited Financial Statements of the last 3 years.
    • Projected Balance Sheet & Profit/Loss statement.
    • Copies of TDS returns for the last 2 years.
  5. Submit Form 13: After filling in the details and uploading documents, submit Form 13.

After Submitting Form 13:

  1. Review by AO: The Assessing Officer (AO) will review your form and may ask for clarifications.
  2. Further Approvals: After the AO's approval, the application moves up for approval by Additional CIT, then CIT.
  3. Certificate Generation: Once approved by CIT, your application is complete. The system will then generate your Lower Withholding Certificate.
  4. Download Certificate: You can download this certificate from the TRACES portal.

There you go! With these steps, you can navigate through the process of obtaining a Lower TDS Certificate under section 197. Remember, patience is key, and careful filling of forms and uploading of documents can make the journey smoother