What is Lower Deduction Certificate (Form 13)?
Nexa Consultancy | Startup & Finance Glossary
A person can apply to the Income Tax officer for a certificate authorizing them to receive payments with a lower rate of TDS or no TDS, if their estimated final tax liability is low. This is done by filing Form 13.
Startup Example: A consulting startup has significant expenses and expects to have a low profit for the year. It can apply for a lower deduction certificate so that its clients deduct TDS at a lower rate (e.g., 2% instead of 10%), improving its cash flow.
Our tax planning services can help with this process.