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July 30, 2021

Steps to file lower TDS Certificate for NRI in case of property sale

by Mahesh Mara in Income Tax

Steps to file lower TDS Certificate for NRI in case of property sale

Person who is responsible for making the payment is assigned with the responsibility of deducting the TDS at specified rates either at the time of credit in the books or payment to the recipient, whichever is earlier and only pay the balance amount to the recipient. This mechanism ensures that tax is collected in advance, checks tax evasion and also helps track income of recipients in the future. However, this scheme of deducting tax at source itself may create hardship to few taxpayers who may not be have a taxable income at all. Some situations are as follows:

  • Assessee has incurred a loss for the current year;
  • Assessee has carried forward losses of previous years available for set off in the current year;
  • Assessee is eligible to claim certain exemptions or deductions during the year;

Therefore, with an objective to remove this undue hardship on such taxpayers, income tax law provides for an option to obtain a certificate from the Assessing officer confirming either a lower rate of TDS compared to the rate specified under the law or a NIL rate of TDS, depending on facts and circumstances of each case based on the application made. Section 197 governs these provisions. In this article we will learn how to file application for lower deduction certificate online for Non resident having property transaction.

Process to file Lower deduction Certificate online:

Below are the steps to file lower deduction certificate online

Step 1: Go to https://contents.tdscpc.gov.in/

And click on “Register as New user”

It will redirect you to “register as new User” Tab

Step 2: Now, fill the following details:

1. PAN of the Seller

2. Date of Birth or Incorporation of Seller

3. Name of the Seller

Now enter verification code and click on proceed button

Now, in the next page fill any of the following details:

Option 1-Details of TDS/TCS Deposited

Option 2- Challan Details of Tax Deposited by Taxpayer ( i.e. Advance Tax, Self Assessment Tax, TDS on Property and TDS on Rent )

Option 3-Mention Details of 26QB statement details filed by Buyer before correction

Option 4- Authentication through Aadhaar/ VID

And click on next button. Now, enter the communication address, mobile no and mail id of the buyer and click on next button.

Now, enter the password, select the appropriate secret question and enter the answer for question and click on create account button.

In the next page the applicant is required to confirm the details entered and click on confirm button. Later, the applicant will receive the Activation link and codes have on the email address and mobile number provided during registration. Click on the link on mail id, you will see below screen

Enter Pan as User id and enter the OTP received on mail id and mobile no and click on “Submit” button. You will successfully get yourself registered on the TRACES website.

Step 3: Online application for Lower deduction through Form 13

Now, Login to Traces website using Login and Password created at the time of registration. Now, under “Statements/ Forms” tab, select “Request for Form 13” option

In the next page a message will be displayed “Your DSC is not Registered at TRACES. Kindly register your DSC otherwise your final submission of request for Form-13 will be done through EVC. Do you want to proceed ?” Select “Yes”

In the next page, select Residential of the applicant:

  • Resident
  • Non-Ordinarily Resident
  • Non-Resident

In the next page a checklist with respect to lower deduction shall appear, click on “Proceed” button below the checklist

Step 4: Filling of Form 13

In the next page select,

Request Type as Original

Financial year as FY 2021-22, and

Application Type as “Online”

And click on “Proceed” button

In the next page details such as

  • Status of person
  • Residential status
  • PAN of the person
  • Email id and mobile no of applicant
  • Previous year to which the payment relates

Shall be prefilled automatically by the website. The applicant has to enter the below details:

  • State and District as per current address of the taxpayer
  • Details of existing tax liability under Income Tax Act, 1961 and Wealth-tax Act, 1957
  • Estimated total Income for the previous year for which form 13 is being filed
  • Total tax including interest payable for the total income referred above
  • Details of income claimed to be exempt and not included in the total income above
  • Details of payment of advance tax and tax already deducted/ collected if any for the previous year referred above

Once the above details are filled click on “Save & proceed” button

In the next page select, Annexure as “Annexure I- For No/ Lower deduction”, and click “proceed” button

Now, click on add row and provide details of deductor. Provide the following details:

  1. Tax deduction and collection Account no, the name will automatically get prefilled in next column
  2. Section under which tax is to be deducted
  3. Nature of payment
  4. Estimated amount of Income/ sum to be received, and
  5. Requested rate of deduction

Once the above details are filled click on “Save & proceed” button

Step 5: Uploading documents and Final submission

Now, attach the below documents:

1. Upload & Fill Estimated Income Computation for which F.Y certificate is sought
  (Template for estimated income is mandatory to fill by clicking on ‘Template’)*

2. Upload & Fill computation of estimated total income any of the four previous year preceding
    to the previous year for which return of income has not been filed

3. Upload Assessment Orders if assessed, for the last four assessment years

4. Upload return of income for any of the four previous year has been filed in paper form

5. Upload Details of income claimed to be exempt and not included in the total income**

6. Upload any other document (For example: Estimated Profit & Loss Account, estimated Balance     sheet, Working of MAT liability for all relevant A.Y etc.)

Now, click on “Template” button in point 1 i.e. Upload & Fill Estimated Income Computation for which F.Y certificate is sought (Template for estimated income is mandatory to fill by clicking on ‘Template’)* and fill the below details:

1. Gross Receipt/ Turnover (GR/TO)* Total Gross Receipt/ Turnover (GR/TO) for all TAN(s) Reported

2. Income from Salary

3. Income/Loss from House Property

4. Income/Loss from Business or Profession
   (After Adjustment of B/F Losses and Unabsorbed Depreciation)

5. Income chargeable to tax at special rate under section 111A, 112 etc.

6. Income/Loss from Capital Gains

7. Income from Other Sources

8. Presumptive Income U/S 44AD, 44ADA, 44AE

9. Gross Total Income

10. Less: Deduction u/s 80

11. Less: Deduction u/s 10/10A

12. Taxable Income (After Rebate u/s 87A including Surcharge and Cess)

13. Tax payable

14. Tax Payable u/s 115JB

15. Less: MAT Credit u/s 115JAA

16. Gross Tax Payable

17. Less: Rebate u/s 89

18. Add: Interest u/s 234A, 234B, 234C

19. Total tax Payable*

20. Less: – TDS/TCS, Self Assesssment Tax, Advance Tax

21. Net Tax Payable/Refund

Once the documents are uploaded and above details are filled, enter the verification code i.e. captcha code and click on “Upload” button the documents will get uploaded.

Once the documents are uploaded successfully, select “I agree” check box, enter the “Place” and Click on “Preview and Submit” button

In the next page you can view the whole form you have filled. Now Click on “Submit” button. A pop up will appear which will prompt whether you want to submit through E verification through net banking or Aadhaar OTP or Mobile OTP i.e. OTP will be received on the registered mobile no.

Once the option is selected, click on “Proceed” button.

In the next page the form will get successfully submitted. You can view the status of form 13 under “Statements/ Forms” tab, through “Track Request for Form 13” option

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