CBDT issues directions on issue of certificates for lower rate or nil deduction or collection of TDS or TCS

Mar 31, 2020 | by Avantis RegTech Legal Research Team


Finance & Taxation Compliance

The Central Board of Direct Taxes (CBDT) on March 31, 2020 has issued directions or clarifications on issue of certificates for lower rate or nil deduction or collection of Tax Deducted at Source (TDS) or Tax Collected at Source (TCS).

Due to outbreak of the pandemic COVID-19 virus, there is severe disruption in the normal working of almost all sectors, including functioning of the Income tax department. In such scenario, the applications filed by the payees for lower or nil rate of deduction of TDS and applications by buyers or licensees or lessees for lower or nil rate of collection of TCS for financial year (FY) 2020-21 have not been attended in a timely manner by the TDS or TCS assessing Officer (AO).

Therefore, CBDT issues following directions or clarification regarding above mentioned issues:

a)All the assesses whose applications are pending for disposal as on date and they have 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 AO, whichever is earlier.

b)In cases where the assesses could not apply in the Traces Portal for the FY 2020-21, but were having certificates for F.Y. 2019-20, such certificates will be applicable be June 30, 2020 of FY 2020-21.

c)In cases where the assessee had not applied for issue of lower or nil deduction of TDS or TCS and he is also not having certificate for FY 2019-20, a modified procedure (Page 3) for application and consequent handling by the TDS or TCS AO is laid down. 

d)On payments to Non-resident (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 June 30, 2020 of FY 2020-21, or disposal of their applications, whichever is earlier.


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