Applying for Lower or Nil TDS May Soon Go Fully Online
What Happened
The government is preparing rules to allow taxpayers to apply electronically for lower or nil TDS certificates under Section 395 of the Income-tax Act, 2025. The move, enabled through the Finance Act, 2026, aims to simplify compliance, reduce paperwork, and help taxpayers avoid excessive tax deductions and refund delays. The rules are currently being drafted and will be notified later
Key Takeaways
Eligible taxpayers whose actual tax liability is lower than the TDS deducted will be able to seek relief through a faster, paperless, and more transparent online process. The reform is expected to particularly benefit small taxpayers, professionals, and businesses by improving cash flow and reducing compliance burden.