In a recent development, Non-Resident Indians (NRIs) aiming to mitigate tax deductions on their Indian income now face a revised procedure for obtaining Tax Deduction at Source (TDS) certificates. This adjustment, outlined in a circular by the Central Board of Direct Taxes (CBDT) on September 27, 2023, replaces the conventional use of Form 15G/H for NRIs, necessitating an application to the assessing officer for a reduced or zero TDS certificate.

Digital Verification Mandate for NRI Applications

A notable change in the NRI lower/nil TDS application process involves the elimination of various verification methods. Previously available options such as Aadhar OTP and mobile OTP have been supplanted by the sole method of Digital Signature Certificate (DSC) verification on the TRACES NRI website. NRIs seeking a NIL or reduced TDS certificate must now submit an online application using Form 13 and verify it through DSC, streamlining the application process.

Unchanged Substantive Procedures for NRIs

Apart from the verification alteration, other substantive procedures for NRIs in this context remain largely unaffected. Following the submission of an online Form 13 application for a lower or nil TDS rate, the TDS assessing officer (AO) evaluates the reasons and justifications provided. The AO then assesses the TDS rate suggested by the income tax department’s software, determining whether it should be lower, nil, or unchanged. If a consensus between the system and AO is reached on the current TDS rate, the Form 13 application is rejected.

Conclusion: Enhancing Efficiency in NRIs TDS Certificate Processing

The revised procedures aim to enhance the efficiency of TDS certificate processing for NRIs by introducing a streamlined digital verification process. NRIs can now navigate the application process with greater ease, ensuring a more straightforward approach to securing reduced or nil TDS certificates for their Indian income.