Extension of validity of all Certificates for Lower Rate / Nil deduction / Collection of TDS & TCS by 3 Months

After announcement of Nation wide Lockdown in the month of March, functioning of the Income Tax Department (including application for lower/Nil deduction of TDS/TCS & approval of the same by Income Tax officer) has been severely disrupted.

Therefore, to mitigate the hardship of the assessees and constraints faced by Income Tax officers in disposing of the applications CBDT while exercising powers u/s 119 of the Act states that:-

1. Where application for Lower/Nil deduction of TDS/TCS has been filed on TRACES Portal for FY 2020-2021 but couldn’t be approved by the Income Tax Officer then Certificates issued for FY 2019-2020 shall be valid till 30.06.2020 or disposal of applications by Income Tax Officer, whichever is earlier.

2. Where Certificate for lower/nil deduction of TDS/TCS has not been filed on TRACES Portal for FY 2020-2021 then Certificate issued for FY 2019-2020 shall be valid till 30.06.2020. However, the assessee shall apply for New Certificate on TRACES for FY 2020-2021 immediately as soon as the normalcy restored.

3. Where the assessee has not applied for lower/nil deduction certificate on TRACES Portal, and he is also not having any such Certificate for previous FY 2019-2020, then procedure for application has also been modified.

4. TDS@10% including surcharge and cess will be deducted on Payments to Non-Residents (including foreign Co.) having Permanent Establishment in India, not covered in above points till 30.06.2020 or disposal of their application by AO, whichever is earlier.

Such order of the CBDT is very much important for cash flow management of all the taxpayers including Non Residents when they are already facing severe liquidity and cash flow issues due to COVID 19.

Thank You..

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