A Lower Deduction Certificate is a document issued by the Income Tax Department that authorizes a deductor (in the case of TDS) or a collector (in the case of TCS) to deduct or collect tax at a rate lower than the prescribed statutory rate or even at zero, based on the taxpayer’s actual tax liability. This certificate ensures that taxpayers are not burdened with excessive tax deductions/collections, particularly when their income is below the taxable threshold, they have losses, or they are eligible for exemptions/deductions.