09/03/2026
Understanding the Lower Deduction Certificate (LDC)
A Lower Deduction Certificate (LDC) under Section 197 helps taxpayers reduce excess TDS and improve cash flow—particularly useful for NRIs where TDS rates are higher.
🔹 Key Steps to Obtain an LDC
1️⃣ Prepare a detailed tax calculation
This projection helps determine the lower TDS rate. Apply through Form 13 on the Income Tax Portal.
2️⃣ PAN must be in the correct jurisdiction (For NRIs)
NRI PAN should be under the International Taxation Ward, not the Residential Ward.
3️⃣ AO verification & approval
Assessing Officer reviews documents and issues the certificate with a specific lower TDS rate.
4️⃣ TAN registration & TRACES activation
TAN must be activated to manage TDS, view LDC, and file returns.
5️⃣ Deduct TDS & file 27Q
After receiving the LDC, deduct TDS at the approved rate, deposit the challan, and file Form 27Q.
🤝 For Expert Support
Adv. Rajul Jain – M.Com, CA-Final, MBA (Fin), LL.B, SEBI-Registered Mutual Fund Distributor
Corporate Lawyer & Investment Consultant
🌐 www.rjinvestment.in
