TDS DEDUCTION

[Guest]

We are a freight forwarding co in cochin.Some of our customers are deducting TDS from ocean freight.To avoid this deduction we are submitting the exemption certificate from shipping lines,but they were not accepting the same.if it is possible to get an exemption certificate for us from income tax. if possible what are the formalities we have to fullfil.Also let we know if there is any loophole to aviod this deduction. kindly advice

[CA Rachit Agarwal]

Section 197 deals with lower deduction of tax.

You have to prepare the Profit/Loss statement and justify that there would be no profit during the year

Hope the freight is in relation inland waters

Further I am not able understand that what is this "exemption certificate from shipping lines".

AI Summary

Lower TDS Deduction under Section 197: apply with profit/loss statement to seek nil or reduced withholding. The operative remedy is an application under Section 197 for lower or nil TDS deduction, supported by a profit-and-loss statement to justify no taxable profit; the taxpayer must clarify whether the freight is ocean or inland water transport, and a shipping-line ''exemption certificate'' does not substitute for a tax authority order.