Applying for a Lower Tax Deduction Certificate (LDC) to Manage Excess TDS for NRIs

Lower Tax Deduction Certificate (LDC) for NRIs

As an NRI earning income subject to TDS deduction, there may be situations where the TDS deducted is higher than the recipient's actual tax liability. You can handle it by obtaining a Lower Tax Deduction Certificate for NRIs under Section 197. You should consider applying for LDC in the following cases:

• Loss-making businesses
• Net total income is below the basic exemption limit
• Receipt of payment from a property sale by an NRI from an Indian buyer
• Other Income like Interest, dividends, etc. are subject to TDS

To obtain a Lower Tax Deduction Certificate, NRIs need to submit Form 13 income tax for NRI to the Income Tax Department. If the TDS rate for NRI property sale is higher than required, you can apply for a reduction in the rate via LDC. Understanding TDS for NRI on sale of property is important for ensuring that the correct amount of tax is deducted. If excessive TDS has been deducted, the TDS refund process for NRIs can help recover the excess tax paid.

Also Read: What are ways for NRI to reduce their TDS liablity in india?