Supplier Tax Declaration
PAN, section and rate — what the payer needs on file before deducting tax at source.
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[supplier] of [address] declares to [payer]:
| Permanent Account Number | [PAN] |
| Nature of payment | [what the payment is for] |
| Section applicable | [section] |
| Rate to be deducted | [rate] |
1.That the Permanent Account Number quoted above is correct and belongs to us, and that a copy of the PAN card is enclosed.
2.That tax deducted from payments made to us may be deposited against that number, and that we will claim credit for it in our own return.
3.That we will inform you in writing of any change to the above, including any lower or nil deduction certificate we obtain, before the next payment falls due.
4.That where we fail to furnish a valid PAN, we accept deduction at the higher rate the law prescribes.
| Place | [place] |
| Date | 14 October 2026 |
What is a Supplier Tax Declaration?
A supplier tax declaration gives the payer what it needs before deducting tax at source: the supplier's PAN, the nature of the payment, the section it falls under and the rate to be applied, together with any lower-deduction certificate or exemption being claimed. It matters because the deduction obligation sits with the payer — get the section or rate wrong and it is the payer who faces the shortfall, interest and disallowance, not the supplier.
Accounts payable teams in Indian businesses collect these when onboarding vendors, contractors, professionals, landlords, transporters and commission agents, and refresh them each financial year. Suppliers issue them so that the correct rate is applied and their PAN is quoted properly on the return, since that is what makes the credit appear against them. Anyone holding a certificate for nil or lower deduction attaches it here. In practice the declaration usually travels with the vendor onboarding pack alongside bank details, GST registration and a cancelled cheque.
This is an Indian income-tax instrument. The sections, rates, thresholds, the higher rate applied where PAN is not furnished and the provisions for non-filers are set by the Income-tax Act and amended in the annual Finance Act, and lower-deduction certificates are issued by the assessing officer on application. Rates and thresholds change from year to year, so verify against the current provisions or with your tax adviser rather than reusing last year's table. Other countries operate different withholding regimes entirely — the US W-9 and W-8 series, UK CIS for construction, and various EU withholding rules — and this form does not serve them.
The declaration records what the supplier has stated; it does not transfer the legal obligation. The payer must still form its own view of the correct section, and a wrong classification agreed by both parties remains the payer's exposure. It does not create an exemption either — only a valid certificate or a statutory provision does that, and a supplier's assertion that no deduction applies is not a substitute. Nor does it deal with GST, which has its own deduction and collection provisions and its own documents.
What to put in a Supplier Tax Declaration
These are the details this template asks for. Anything left blank is marked in red on the preview so you can see what is still missing.
| Field | What goes in it |
|---|---|
| First party | For example: Barton Supply Co. |
| First party address | For example: Unit 7, Barton Road, Columbus, OH 43212 |
| Second party | For example: Halliwell Interiors Inc. |
| PAN | For example: AABCU9603R |
| Applicable section | For example: 194C — payments to contractors |
| Rate to be deducted | For example: 1% (individual/HUF) / 2% (others) |
| Nature of payment | For example: Supply of timber and panel products with delivery |
| Signatory name optional | For example: K. Srinivasa Rao |
| Signatory designation optional | For example: Honorary Secretary |
How to write a Supplier Tax Declaration
Capture the legal name, PAN and status
Record the supplier's name exactly as registered against the PAN, the PAN itself, and the status — individual, HUF, firm, LLP, company, trust, non-resident — because rates and thresholds turn on it. A mismatch between the name on the invoice and the name against the PAN is what causes credit to fail to appear in the supplier's account and produces an angry query eleven months later.
State the nature of payment and the section
Describe the actual service or payment, not the invoice heading, and identify the section applied: contractor payments, professional or technical fees, rent, commission and interest each sit differently. Where a single vendor supplies more than one category, list them separately with the section against each. This is the field that later determines whether the deduction was correct, so make it specific enough to defend.
Attach any lower or nil deduction certificate
If the supplier holds a certificate from the assessing officer, record its number, the rate it permits, the period it covers and the amount it is capped at, and keep a copy. Apply the certificate rate only within its validity and limit, then revert to the ordinary rate. Certificates that are applied after expiry or beyond the capped amount are a routine audit finding.
Verify PAN and filing status before deducting
Validate the PAN against the department's facility, and check the supplier's status under the provisions that impose higher deduction on non-filers, since those rules have changed more than once. Do the check before the first payment of the year and keep the evidence with the declaration. Discovering a problem after several payments means correcting returns rather than adjusting a rate.
Get it signed and refresh it annually
Have an authorised person sign and date the declaration, confirming the information is correct and undertaking to notify changes. Renew it at the start of each financial year, and whenever the supplier's status, PAN details or certificate changes. Vendor master data that is never refreshed is the most common reason a deduction is still being made at last year's rate under last year's certificate.
Common mistakes
- Recording a trading name instead of the name registered against the PAN, so the credit never reflects in the supplier's account and has to be corrected through revised returns.
- Classifying a payment by invoice heading rather than by its actual nature, applying the wrong section and leaving the payer with the shortfall and interest.
- Applying a lower-deduction certificate after its validity period or beyond the amount it covers, which turns a valid concession into an under-deduction.
- Skipping the PAN and filing-status verification, then discovering mid-year that a higher rate applied to payments already made.
- Never refreshing the declaration, so a supplier whose status changed is still being deducted on stale information a year later.
Frequently asked questions
What is a TDS declaration and who provides it?
It is a statement from the supplier giving the payer the details needed to deduct tax at source correctly — legal name, PAN, status, the nature of the payment and the section, plus any lower-deduction certificate. The supplier provides it, usually at onboarding and again each financial year, but the payer remains responsible for applying the right section and rate.
What happens if a supplier does not provide a PAN?
The Act provides for deduction at a higher rate where PAN is not furnished, and there are separate provisions dealing with non-filers of returns. Those rates and conditions have been amended more than once, so check the current provisions before applying anything. Practically, most payers make a valid PAN a condition of vendor setup, because correcting the position afterwards is far harder.
Can a supplier ask for a lower TDS rate?
Only on the basis of a certificate obtained from the assessing officer, or a statutory provision that applies to them. A request in an email or a declaration alone is not enough. If a certificate exists, record its number, rate, validity period and any capped amount, apply it strictly within those limits, and keep a copy on file for audit.
Do I need a fresh declaration every year?
Yes, as standard practice. Rates, thresholds and the supplier's own status change, certificates expire at the end of their validity, and vendor details drift. Refresh at the start of each financial year and whenever the supplier notifies a change. Stale vendor master data applying last year's certificate is one of the most common findings in a tax audit.
Is a TDS declaration the same as a GST declaration?
No. They deal with different laws and different obligations. Tax deducted at source under income tax turns on the nature of the payment and the recipient's status; GST has its own deduction and collection provisions with separate registrations, returns and documentation. Collect both where they apply, but do not treat one as covering the other.
This page explains general practice and is not legal advice. Requirements differ between countries and, in some cases, between states — check what applies where the document will be used.