Lower Deduction Certificate
A Lower Deduction Certificate lets you receive income at a reduced or nil TDS rate when your actual tax liability is lower than the standard deduction rate. We file Form 13 and manage it through to approval.
|800+ businesses served since 2020
TDS at a rate that matches your actual liability
A Lower Deduction Certificate is issued under Section 197 of the Income Tax Act, 1961. It lets a taxpayer receive specific income — contract payments, professional fees, rent, interest, commission or dividends — with TDS deducted at a lower or nil rate, where the standard rate would otherwise deduct more tax than the taxpayer actually owes for the year.
Without one, tax gets deducted at the standard rate regardless of your real liability, and the excess sits with the department until you claim a refund at year-end. An LDC fixes that at source, so the cash stays with you through the year instead.
- Real estate developers paying interest on project finance
- Consultants and freelancers with income below their taxable threshold after deductions
- Property owners with rental income taxed higher than their effective liability
- Exporters and contractors facing standard-rate TDS across multiple payers
- Non-residents eligible for a lower DTAA rate than the default TDS rate
Anyone whose actual tax liability sits below the standard TDS rate
Contracts, rent, interest or fees
Where TDS repeats across the year, an LDC prevents the same over-deduction happening every payment.
Eligible for a treaty rate
Where a DTAA rate applies but the deductor would otherwise apply the higher domestic rate.
Get it in place early
Best applied for ahead of a significant payment, so the reduced rate applies from the start.
Form 13 to certificate in your deductor’s hands
Liability estimation
Working out your projected tax liability for the year against the standard TDS rate.
Form 13 filing
Prepared and submitted through the TRACES portal.
Documentation
Financial statements, projected financials, income and TDS details, and supporting DTAA claims assembled.
Assessing Officer liaison
Responding to queries raised during the officer’s review of your application.
Certificate handover
Once issued, we share the certificate with your deductor so the lower rate applies correctly.
Annual renewal
An LDC is issued for a specific financial year — we track when it needs refiling.
Four steps to a lower TDS rate
We estimate your liability
Projected income and tax worked out against the standard TDS rate.
We file Form 13
Submitted via the TRACES portal with supporting documents.
We handle Assessing Officer queries
Clarifications answered until the application is approved.
We hand the certificate to your deductor
So the correct, lower rate applies from your next payment.
Documents you’ll need
A quick checklist so we can move fast. Don’t have one handy? We’ll tell you exactly what works.
Questions companies ask first.
How is an LDC different from claiming a refund later?
A refund returns excess tax after the fact, often months later. An LDC fixes the deduction rate at source, so the correct amount of tax is withheld from the start and the cash isn’t tied up in the meantime.
Which form do I need to apply?
Form 13, filed through the TRACES portal, supported by your financial statements, projected income and TDS details for the year.
Does the certificate apply automatically to every payer?
No — you (or we, on your behalf) need to share the certificate with each deductor so they apply the reduced rate to your payments from them.
Tell us what you need.
A short call to understand where you stand and how we would run this for you. No obligation.
Prefer to browse first? See all our services or contact us directly.
Explore more of what we do.