CBDT Clarifies on Certificates for Collection of TDS, TCS

To mitigate the hardships to taxpayers, Central Board of Direct Taxes (CBDT) provided clarification on orders under Section 119 of the Income-Tax Act, 1961 issued relating to the issue of certificates for lower deduction/collection of TDS/TCS.

With regard to the issue of the validity period of lower/nil deduction/collection certificates of Financial Year 2019-20, CBDT stated, "For the purpose of Para 2 (a) and 2 (b) of the order dated March 31, the lower/nil deduction/ collection certificates will be valid for the particular period for which these were issued for FY 2019-20 and also for further period from April 1 to June 30 for FY 2020-21 subject to conditions as mentioned in the order dated March 31.

It stated that threshold/transaction limit mentioned in lower/nil deduction/collection certificate issued for FY 2019-20 will be taken fresh for period from April 1 to June 30 for FY 2020-21 and the amount of threshold limit will be the same as was assigned for these certificates for FY 2019-20.

"Official emails or other electronic communication may be used by field authorities of Income Tax Department for internal approval for issue of lower/nil deduction/collection certificates and for communication of the same.

Regarding the issue of new/different TAN mentioned for lower/nil deduction/collection application for FY 2020-21 or revision of rates mentioned in certificates of FY 2019-20, CBDT stated, "In case the payee or buyer/licensee/lessee taxpayer had a certificate for lower deduction for FY 2019-20 and an application has been made for FY 2020-21 for a new/different TAN mentioned in the application, the relaxation as provided in Para 2(a) and 2(b) of the order dated March 31 shall not apply to such cases and they have to apply afresh as per procedure, mentioned in annexure of the order.

"Similarly, if the rates of TDS/TCS mentioned in old certificates are higher and the taxpayer wants revision of the rates in view of impact of COVID-19 outbreak on its business, the relaxation as provided in Para 2(a) and 2(b) of the order dated March 31 shall not apply to such cases and they will have to follow the procedure mentioned in the annexure of the order and apply afresh," it added.