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COVID-19: CBDT issues directions on Certificates for Lower Rate / Nil Deduction / Collection of TDS or TCS [Read Circular]

Nil Deduction TDS - CBDT issues directions - Revenue Audit - CBDT - Taxscan

In the wake of the outbreak of Coronavirus (COVID-19), the Central Board of Direct Tax (CBDT) has issued the directions on regarding the issue of certificates for lower rate/ nil deduction/ collection of Tax Deducted at Source (TDS) or Tax Consultancy Service (TCS).

The Central Board of Direct Tax (CBDT) issued the Order under Section 119 of the Income Tax Act, 1961 issue of certificates for lower rate/ nil deduction/ collection of Tax Deducted at Source (TDS) or Tax Consultancy Service (TCS) under Section 195, 197 and 206C  on March 31, 2020, in the name of Director of IT-Budget, Mahesh Kumar.

There is a severe disruption in the working of Income Tax due to the outbreak of pandemic Coronavirus. In such a scenario the applications filed by the payees under section 195 and 197 of the Income Tax Act, 1961 has not received the applications by buyers/licensees/lessees for lower or nil rate of collection of TCS for Financial Year 2020-21, have not been attended in a timely manner by the TDS/TCS Assessing Officers, which caused the hardships to the taxpayers.

The CBDT while 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/licenses/lessees, the CBDT issues directions and clarifications by the exercise of its powers under Section 119 of the Income Tax Act, 1961.

The order directed the assessee to file the application the lower or NIL deduction of TDS or TCS for the Financial Year 20-21 and the assessee whose applications are pending for disposal as on date and they have been issued such certificate for the Financial Year 2019-20, then the certificate will be applicable till June 30, 2020.

On payments to Non-residents, including foreign companies having Permanent Establishment in India, the payments made will be deducted at the rate of 10% including surcharge and cess, on such payments till June 30, 2020. For  Financial Year 2020-21, or disposal of their applications. whichever is earlier.

To Read the full text of the Circular CLICK HERE
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