CBDT clarifies orders for issuance of certificate for lower deduction/collection of TDS/TCS

CBDT Clarifies orders for issuance of certificate for lower deduction/collection of TDS/TCS

Clarification on orders dated 31.03.2020 and 03.04.2020 issued under section 119 of the Income Tax Act 1961 (the Act) by CBDT regarding issuance of certificate for lower deduction/collection of TDS/TCS u/s 195, 197 and 206C (9) of the Act

Acting on the representation received from various stakeholders, the CBDT has issued the following clarifications on the above subject:

(i) Issue of validity period of lower/Nil deduction/collection certificate for F.Y. 2019-20

For the purpose of para 2(a) and 2(b) of the order dated 31.03.2020, the lower/nil deduction certificates will be valid for the particular period for which these were issued for FY 2019-20 and also for further period from 01.04.2020 to 30.06.2020 for FY 2020-21 subject to the condition as mentioned in the order dated 31.03.2020. For Example, if a certificate was issued for a period from 01.10.2019 to 15.12.2019 the same shall be valid for FY 2019-20 for the period from 01.10.2019 to 15.12.2019 and for FY 2020-21 the same shall be valid for 01.04.2020 to 30.06.2020 subject to conditions as mentioned in the order dated 31.03.2020.

(ii) Issue of threshold / transaction limit for lower/nil deduction/collection certificates of F.Y. 2019-20:

For the purpose of para 2(a) and 2(b) of the order dated 31.03.2020, threshold/transaction limit mentioned in lower/nil deduction /collection certificate issued for FY 2019-20 will be taken fresh for period from 01.04.2020 to 30.06.2020 for FY 2020-21 and the amount of the threshold limit will be the same as assigned for these certificates for FY 2019-20 subject to conditions as mentioned in the order dated 31.03.2020.

(iii) Issue of approval and communication of lower/nil deduction/collection certificates:

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.

(iv) Issue of new/different TAN mentioned in lower/nil deduction /collection applications for FY 2020-21 or revisions of rates mention in the certificates of FY 2019-20

In case the payee or the 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 31.03.2020 shall not apply to such cases and they have to apply afresh as per procedure mentioned abcaus.in annexure of the above mentioned 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 Para 2(b) of the order dated 31.03.2020 shall not apply to such cases and they have to follow the procedure mentioned in annexure of the above mentioned order and apply afresh.

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