Section 197 / Section 395: Nil or Lower TDS Certificate Application
Prepare the justification and figures for an application to the Assessing Officer for a nil or lower TDS certificate.
Law version: FY 2025-26 (Income-tax Act, 1961); Tax Year 2026-27 onwards (Income-tax Act, 2025). Checked on 26 Sep 2026.
What it is
Where TDS at the normal rate would exceed a person's actual tax liability, the person can ask the Assessing Officer for a certificate authorising payers to deduct at a lower rate or not at all. The application is under Section 197 in Form 13 for FY 2025-26 and under Section 395(1) of the Income-tax Act, 2025 in Form 128 (Rule 213) from Tax Year 2026-27, filed online through TRACES. This template prepares the covering application with the estimated income, tax liability, payer details and reasons.
When it is used
- Low-margin businesses whose TDS exceeds the final tax.
- Entities with brought-forward losses or exemptions.
- Non-residents with treaty benefits on specific receipts.
What the template covers
- Applicant name, PAN, address and year
- Jurisdictional Assessing Officer
- Type of income and normal TDS rate
- Rate requested
- Estimated income and tax liability
- Payer details and reasons
Details you will need
The generator asks for the following. Fields marked with an asterisk in the form are required; the rest can be left blank and filled in later in Word.
Application
Application Date
Applicant
Applicant Name (Income Recipient); PAN; Address; Financial Year / Tax Year; Jurisdiction AO / Prabhaag
Income
Type of Income; Normal TDS Rate (%); Rate Requested (%, enter 0 for Nil); Estimated Income for AY from this source (₹); Estimated Tax Liability for AY (₹)
Payer
Payer Name (TDS Deductor); Payer TAN; Payer Address; Estimated Total Payment by this Payer (₹)
Justification
Reason for Lower / Nil Deduction
Stamp duty, registration and filing
The Assessing Officer issues the certificate after examining the estimated income and past returns, for specified payers, amounts and periods. Payers must deduct at the rate in the certificate. Certificates issued under Section 197 for Tax Year 2026-27 receivables remain valid. Check the procedure on tdscpc.gov.in and incometax.gov.in.
From 1 April 2026 the application is made in Form 128 under Section 395(1) of the Income-tax Act, 2025 (Rule 213).
Generate the Section 197 / Section 395 — Nil / Lower TDS Certificate Application
Fill in the form and download the draft as a Word file. It is a general template, not legal or professional advice; have it reviewed for your facts before you sign or rely on it.
Need this checked against your facts, or the registration or filing that follows (e.g. TDS returns, ITR)? Contact SKAG and Associates
Related documents
Frequently asked questions
Is Form 13 the same as a Section 197 application?
Yes. Form 13 was the application under Section 197. From Tax Year 2026-27 it is Form 128 under Section 395(1).
Can a certificate be issued for all payers?
It is issued for named payers, or in some cases generally, with amount limits.
How can a payer verify the certificate?
The payer can verify it on TRACES using the certificate number.
This page gives general information for reference only. Laws, stamp duty rates and filing requirements change and differ between States, so confirm the current position for your case. Related: all document templates · free tax calculators · compliance calendar and guides.