Section 393(6) of Income Tax Act: Filing a Nil TDS Declaration

Section 393(6) of the Income Tax Act, 2025 lets you stop tax from being deducted at source on certain payments by giving the payer a written declaration that your estimated total income for the year will be nil. It is the mechanism that used to sit in Section 197A of the 1961 Act, now relocated into the new consolidated TDS provision. If a bank, tenant, insurer, or mutual fund would otherwise withhold tax from money owed to you, a valid declaration under this subsection tells them not to.1Income Tax Department. Income Tax Act 2025 – Section 393

The point of the provision is cash flow. Without the declaration, TDS is deducted automatically once a payment crosses the threshold, and you get the money back only after filing a return and waiting for a refund. Section 393(6) skips that cycle for people who genuinely owe no tax.

Who Can File the Declaration

The provision splits eligible persons into two groups.

The first group is resident individuals. A resident individual can file the declaration for every payment type the subsection covers.

The second group is any person other than a company, a firm, or a resident individual. This picks up Hindu Undivided Families, associations of persons, and trusts. These persons can file for the same payments as resident individuals with one exception: dividends. Dividend income declarations are limited to resident individuals.1Income Tax Department. Income Tax Act 2025 – Section 393

Companies and firms cannot use the declaration at all.

There is also a general ceiling that applies to most filers. If the aggregate of the covered payments you receive during the tax year exceeds the maximum amount not chargeable to tax, the declaration is not available, even if your overall income after deductions would come out to nil. The subsection looks at the covered payments on their own, not at your net taxable position.1Income Tax Department. Income Tax Act 2025 – Section 393

Which Payments the Declaration Covers

Section 393(6) applies only to the payment types listed in its table. You cannot use it to switch off TDS on income the subsection does not name.

  • Accumulated employee balances (provident fund and similar), as referenced in Section 392(7).
  • Insurance commission under Section 393(1), Table Sl. No. 1(i).
  • Rent under Section 393(1), Table Sl. No. 2(ii).
  • Income from units under Section 393(1), Table Sl. No. 4(i).
  • Interest on deposits, securities, and similar instruments under Section 393(1), Table Sl. No. 5(i), (ii), and (iii).
  • Life insurance policy payments under Section 393(1), Table Sl. No. 8(i).
  • Dividends under Section 393(1), Table Sl. No. 7 — resident individuals only.1Income Tax Department. Income Tax Act 2025 – Section 393

Professional fees, contract payments, and other income streams outside this list are not covered. If your income comes from those sources and you want relief from TDS, the route is a lower or nil deduction certificate from the assessing officer, not a Section 393(6) declaration.

The Senior Citizen Carve-Out

The aggregate-payments ceiling described above does not apply to senior citizens. A resident individual who is 60 years of age or older at any point during the tax year can file the declaration regardless of how large the covered payments add up to, provided the estimated total income for the year still comes in below the taxable threshold.1Income Tax Department. Income Tax Act 2025 – Section 393

For retirees living mainly on interest and dividend income, this is the practical difference between filing the declaration and having tax withheld all year.

How to Submit the Declaration

The process is straightforward, but timing matters.

Estimate your total income honestly first. Add up every source — interest, rent, dividends, any salary, capital gains. If the figure before Chapter VIII deductions exceeds the maximum amount not chargeable to tax, you are not eligible, unless the senior citizen carve-out applies to you.

The declaration itself must be in the prescribed form and submitted in duplicate to the payer. Banks and other regular payers typically supply the form.1Income Tax Department. Income Tax Act 2025 – Section 393

Submit it before the payer credits or pays the income. A declaration that reaches the payer after TDS has already been deducted does not reverse the deduction; at that point the only route to recover the money is a refund claim in your return.

Each payer needs a separate declaration. A form filed with your bank does nothing for the company paying you dividends or the tenant paying rent. Missing a payer means TDS gets withheld from that stream. Keep a copy of every declaration you file in case the tax department later asks why a particular payment went out gross.

What the Payer Must Do

The declaration triggers an obligation on the payer’s side as well. Under Section 393(7), the payer must forward one copy of your declaration to the Principal Chief Commissioner, Chief Commissioner, Principal Commissioner, or Commissioner. The deadline is the seventh day of the month following the month in which you furnished the declaration.1Income Tax Department. Income Tax Act 2025 – Section 393

This gives the tax department a record of every nil-income claim. It also means the payer has their own compliance exposure if they accept your declaration and fail to forward it on time.

What Happens If the Declaration Turns Out to Be Wrong

Filing a nil-income declaration when your income actually crosses the taxable threshold is not treated as a paperwork slip. The tax department can treat the resulting non-deduction as a shortfall, with the payer on the hook for tax that should have been withheld, and consequences flowing back to you as the declarant.

You are still required to file a return and pay the full tax. Penalty for underreporting income is 50 per cent of the tax payable on the underreported amount. If the underreporting stems from misrepresentation or suppression of facts, the penalty rises to 200 per cent of the tax payable on the misreported income.2Income Tax Department. Penalties Under the Income-tax Law

Willful evasion can bring prosecution under Section 276C. Where the evaded tax exceeds one lakh rupees, punishment can be rigorous imprisonment for six months to seven years plus a fine. Where the amount is smaller, imprisonment can range from three months to three years.3Income Tax Department. Income Tax Act 1961 – Section 276C A deliberately false declaration combined with significant unreported income is exactly the fact pattern that draws prosecution referrals.

You May Still Need to File a Return

The declaration stops TDS. It does not remove the obligation to file a return. If your total income exceeds the basic exemption limit, or if you meet any of the other mandatory filing conditions under Section 263(1), you must still file even though no tax was withheld.

For an individual whose accounts are not subject to audit, the return is due by 31 July. Filing after the due date attracts a fee under Section 428 of the new Act: ₹5,000, reduced to ₹1,000 where total income does not exceed ₹5 lakhs.4Income Tax Department. FAQs on Interplay and Transition