The taxpayers can soon apply for lower or nil tax deducted at source (TDS) certificates, as the Income Tax Department is preparing rules around the same, Parliament was informed on Monday.

Pankaj Chaudhary, Minister of State for Finance in the Parliament said that the provision was introduced to ease compliance for small taxpayers.

“Under the Income-tax Act, 2025, taxpayers can seek certificates allowing TDS to be deducted at a lower rate or not deducted at all. The enabling rule is currently under preparation and shall be notified in due course,” Chaudhary said in a written reply in the Lok Sabha.

The application will be processed using information already available with the Income Tax Department, including previously filed tax returns, the Annual Information Statement (AIS), Taxpayer Information Summary (TIS) and Form 26AS.

If the prescribed conditions are met, the certificate will be issued electronically while the applications where the information does not match may be rejected.

Notably, a lower or nil TDS certificate is generally sought when a taxpayer expects their final tax liability to be lower than the TDS that would otherwise be deducted.

Further, this allows taxpayers to avoid excess deductions and the need to claim a refund later.

MoS Finance also told the Parliament that the Income Tax Department disposed of 2.24 lakh appeals in FY26, compared with 1.11 lakh in FY24.The department completed 2.13 lakh faceless assessments in FY26, compared with 2.73 lakh in FY24.

The last date for filing the Income Tax Returns (ITRs) has come to an end for the salaried professionals on July 31, but it remains open for the futures and options (F&O) traders till August 31.

For the F&O turnover, it is not based on the total value of trades but is calculated using specific tax rules.