Provisions of section 197 of the Income Tax Act, 1961 provides taxpayers the facility of lower tax rate or NIL deduction of TDS (TDS exemption).
If at the time of filing returns, the tax payer realizes that his tax liability is considerably less than what he actually paid, then he can claim the refund for the same. However, in case where the tax payer thinks that his tax liability for the year will be NIL or less than TDS rate applicable on a particular source of income, section 197 and 197A permits him to apply for a lower rate of TDS or no TDS. Taxpayer claiming low rate or no TDS needs to submit the application to the Assessing Officer (AO) in the prescribed Form-13.
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