CBDT Order u/s 119 of Income Tax Act, 1961 on issue of certificates for lower rate nil deduction/ collection of TDS or TCS u/s 195, 197 and 206C (9)

Due to outbreak of Covid-19 virus, there is severe disruption in the normal working of almost all sectors, including functioning of the Income tax Department. In such a scenario the applications filed by the payees u/s 195 and 197 of the Act for lower or nil rate of deduction of TDS and applications by buyers/licensees/lessees u/s 206C (9) of the Act for lower or nil rate of collection of TCS for F.Y. 2020-21 have not been attended in a timely manner by the TDS/TCS Assessing officers causing hardship to tax payers.

Considering the constraints of the Field Officers in disposing of the applications for lower or nil rate of TDS/TCS and to mitigate hardships of payees and buyers/licensees/lessees, the CBDT issues following directions/clarifications by exercise of its powers u/s 119 of the Act:

a) All the assesses who have filed application for lower or nil deduction of TDS/TCS on the Traces Portal for F.Y.2020-21 and whose applications are pending for disposal as on date and they have taken issued such certificates for FY 2019-20, then such certificates would be applicable till 30.06.2020 of F.Y. 2020-21 or disposal of their applications by the Assessing Officers, whichever is earlier, in respect of the transaction and the deductor or or collector if any. For whom the certificate was issued for F.Y. 2019-20.

b) ln cases when the assesses could not apply for issue of lower or nil deduction of TDS/TCS in the Traces  Portal for the FY 2020-21, but were having the certificates for F.Y. 2019-20, such certificate will be applicable till 30.06.2020 of F.Y. 2020l-21. However, they’ need to apply at the earliest giving details of the transactions and the Deductor / Collector to the TDS/TCS Assessing Officer as per  procedure  laid down in sub-part c) below, as soon as normalcy is restored or 30.06.2020, whichever is  earlier.

c)I n cases where the assesse has nor applied for issue of lower or nil deduction of TDS/TCS in the Traces Portal, and he is also not having any  such certificate for F.Y.2019-20, a modified procedure for application and consequent handling by the TDS /TCS Assessing officer is laid down which is enclosed as Annexure.

d)On payments to non-residents {including foreign companies) having Permanent Establishment in India and not covered by (a) and (b) above ,tax on payments made still be deducted at the rate of 10% including surcharge and  cess , on such  payments  till  31.06.2020 of  F Y. 2020-21, or disposal of their applications, whichever is earlier.

Annexure

Application for Lower /Nil Deduction Certificate: The applicant shall apply for the Lower /Nil deduction /Collection certificate under section 197/206C (9) of the Income Tax Act vide an email addressed to the Assessing officer concerned. The email shall contain data /documents as under:

1. Duly filed in form 13 (Annexure I and / or Annexure III
2. The documents /information as required to be uploaded on TDS –CPC website while filing up of Form 13
3. Projected Balance sheet and P&L accounts FY 2020-21
4. Provisional Balance sheet and P&L accounts FY 2019-20
5. Balance sheet and P&L accounts of FY 2018-19
6. Form 26 AS for FY 2019-20 & 2018-19
7. ITR Pertaining to FY 2018-19

For issue of certificate foe lower / nil deduction of tax under section 195(2) and 195(3) the process of furnishing of application will continue to be same with the modification that the application will be filed via email and certificate will also be issued via email.

Issuance of the Certificate: The certificates shall be issued up to 30.06.2020 or any other date (earlier than 30.06.2020) as specified by the AO. The assessing officer shall communicate the issuance of certificate vide mail containing following information.

S. No

Tan of the Deductor

PAN of the Dedcutee

Financial Year

Section under which Tax at source is to be deducted /Collected

Estimated amount of income /Sum to be received /paid

Applicable rate of deduction /Collection

Valid from date

Valid to Date

The issuance of certificate shall be communicated to the applicant who in turn shall share the same with the deductor /collector