CBDT vide order u/s 119 of the Income tax act has provided the following relief in relation to TDS and TCS provision amid corona virus pandemic:
1. All the assessee’s 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 been issued such certificates for FY 20 19-20, 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 collector if any, for whom the certificate was issued for F.Y. 2019-20.
2. 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 1020-21 , but were having the certificates for F.Y. 2019-20, such certificate will be applicable till
30.06.2020 of F.Y. 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 laid down in sub para c) below, as soon
as normalcy is restored or 30.06.2020 whichever is earlier.
3. In cases where the assessee has not 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 FY.2019-20, a modified procedure for application and consequent handling by the TDS/ TCS Assessing Officer is laid down which is enclosed as Annexure.
4. 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 will be deducted at the rate of 10% including surcharge
and cess, on such payments till 30.06.2020 of F.Y. 2020-21, or disposal of their applications whichever is earlier.
You can read the full order and annexure from HERE.
Thus, according to above order those who already hold lower/ nil deduction certificate for previous year and who have made application on Traces portal need not worry about till 30.06.2020. Also, those who already hold the certificate for previous year but have not applied for certificate during the year can use previous year certificate till 30.06.2020 but they need to apply for current year’s certificate by using the procedure as mentioned in point no. 3.
Assessee’s who don’t have certificates of previous year and who haven’t applied this year for Nil or Lower deduction need to first apply for same by applying it in the manner mentioned in annexure i.e. by writing a mail to your assessing officer and then they can take benefit of such lower or nil deduction.
In case of NRI it has been mentioned that those NRI/ foreign companies who are not covered in point no. 1 or 2 and those who have permanent establishment in India, TDS shall be deducted at 10% in their case and such 10% shall include surcharge as well as cess. The rate will remain applicable till 30.06.2020 or till the time of disposal of their application. Now in the above point it has not been mentioned that whether this rate will be applicable to only those who have made application or to everyone because there are many sections where rate of TDS is much higher than 10% and will sending the email to AO suffice all other requirements?
Since in the above point it has been mentioned that such rate shall be applicable till 30.06.2020 or till the application is disposed the lower rate of 10% should be available to only those NRI and Foreign companies who have made application.
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