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FORM NO. 25 of the Income Tax Act, 1961 Format
Need a reliable FORM NO. 25 of the Income Tax Act, 1961 format to apply for a certificate authorizing no deduction or lower deduction of tax on interest from securities? Our ready-to-use, customizable legal template in PDF and Word format simplifies compliance with Indian income tax laws.
What is FORM NO. 25 under the Income Tax Act, 1961?
FORM NO. 25 of the Income Tax Act, 1961 is an official application form prescribed by the Central Board of Direct Taxes (CBDT) for individuals, HUFs, companies, or other entities seeking a certificate under Section 197(1). This certificate allows the recipient to receive interest on securities without Tax Deducted at Source (TDS) or at a reduced rate. It's crucial for investors holding government securities, bonds, or debentures where interest payments are subject to TDS under Section 193.
In the context of India's Income Tax Act, 1961, this form ensures payers of interest (like banks or financial institutions) deduct tax at the appropriate lower rate or nil rate as certified by the Assessing Officer (AO). Filing FORM NO. 25 correctly helps avoid excess TDS, enabling better cash flow for taxpayers.
Why is FORM NO. 25 Important?
Submitting a properly filled FORM NO. 25 format is vital for tax efficiency. Without this certificate, payers must deduct TDS at the standard rate (typically 10% for residents), leading to unnecessary cash outflows. Claiming refunds later through ITR can be time-consuming and cumbersome.
Key benefits include:
- Tax Savings: Receive interest net of lower or no TDS.
- Compliance: Meets Rule 28 requirements under Income Tax Rules, 1962.
- Ease for Investors: Ideal for senior citizens, low-income earners, or those with losses eligible for lower TDS.
- Legal Protection: Prevents disputes with tax authorities or payers.
Non-compliance can result in higher tax deductions, interest penalties, or scrutiny during assessments.
Key Elements of FORM NO. 25 Format
A standard FORM NO. 25 of the Income Tax Act, 1961 sample includes:
- Applicant's Details: Name, PAN, address, status (individual/firm/company), and contact information.
- Financial Year and Assessment Year: Specify the period for which the certificate is sought.
- Particulars of Securities: Details of securities, issuer, amount of interest expected, and payer's information.
- Reasons for Lower/No TDS: Evidence like income estimates, losses, or exemptions (e.g., Form 15G/15H reference).
- Estimated Total Income: Computation showing eligibility under Section 197.
- Declaration: Signed by the applicant or authorized signatory, with enclosures like ITR acknowledgments or certificates.
- Verification: Dated and place of submission.
Our customizable FORM NO. 25 template ensures all these sections are accurately formatted for submission to the AO.
Who Should Use FORM NO. 25?
This legal template is essential for:
- Individual Investors: Holding NSC, KVP, or other securities.
- Senior Citizens: Opting for lower TDS on interest income.
- Business Entities: Companies or firms with significant security investments.
- HUFs and Trusts: Managing portfolio interest payments.
Common use cases include government securities, PSU bonds, and debentures in civil tax matters across India.
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Customize and Get Expert Help
While our FORM NO. 25 sample is designed to meet court and Income Tax Department requirements, it's recommended to consult a chartered accountant or tax lawyer for personalized advice. Tailor it to your needs and ensure compliance.
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