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New Delhi : Due to outbreak of the Covid-19 pandemic, there is severe disruption in the normal working of almost all sectors. To mitigate the hardships of taxpayers, the CBDT has issued directions by exercising its power u/s 119 of the Income-tax Act, 1961 (the Act) that all the assessees who have filed application for lower or nil deduction of TDS/TCS for FY 2020-21 and whose applications are pending for disposal as on date and they have been issued such certificates for FY. 2019-20, then such certificates would be applicable till June 30, 2020 of FY 2020-21 or disposal of their applications by the Assessing Officers, whichever is earlier, in respect of the transaction and the deductor or collector,if any, for whom the certificate was issued for FY 2019-20.
In cases where the assessees 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 FY 2019-20, such certificates will be applicable till June 30, 2020 of FY 2020-21. 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 prescribed.
Further, on payments to Non-residents (including foreign companies) having Permanent Establishment in India, where the above applications are pending, tax on payments made will be deducted at the subsidised rate of 10% including surcharge and cess, on such payments till June 30, 2020 of FY 2020-21, or disposal of their applications, whichever is earlier (Order passed on March 31, 2020).
In case of pending applications for lower/nil rate of TDS/TCS for FY 2019-20, the Assessing Officers have been directed to dispose off the applications through a liberal procedure by April 27, 2020, so that the taxpayers may not have to pay extra tax which may cause liquidity issues to them (Order passed on April 3, 2020).
To mitigate the hardships of small taxpayers, it has been decided that if a person had submitted valid Forms 15G and 15H to the Banks or other institutions for FY 2019-20, then these Forms would be valid up to June 30, 2020. This will safeguard the small tax payers against TDS where there is no tax liability (Order passed on April 3, 2020), according to a PIB release.