What is lower TDS / nil TDS certificate — Section 197?

Key mapping

A deductee can apply to their Assessing Officer under Section 197 for a certificate authorising the deductor to deduct TDS at a lower rate or nil rate.

Explanation

Under Section 197 of IT Act 1961 (§397 in the 2025 Act), a taxpayer expecting their total income to be taxable at less than the standard TDS rate can apply online through TRACES for a lower deduction certificate. The certificate specifies the rate and validity period. The deductor must deduct at the certified rate. This is commonly used by mutual funds, corporate fixed income investors, and businesses with losses. The certificate must be obtained before the deduction is made — retrospective application is not permitted. Verify on the income-tax portal before filing.

Related terms and sections

197 397 lower TDS certificate nil TDS Section 197 TRACES lower deduction certificate

Use this in practice

File My ITR →Tax Calculator →

Related sections

IT Act 2025 Section Mapper →All IT Act changes →

All section references are sourced from the Income Tax Act 2025 (official gazette, incometaxindia.gov.in) and cross-referenced against CBDT's comparative statement. Always verify on the official portal before filing. This page is for reference only and does not constitute legal or tax advice.

Chat