We are pleased to release a Tax Alert which summarizes Notification No. 76/2015/F. No.133/ 50/ 2015 -TPL dated 29 September 2015 issued by the Central Board of Direct Taxes (CBDT) for change in procedure for furnishing Nil withholding declarations (declarations) by payees in Form 15G/H.
Under the existing procedure, payees need to furnish such declarations to payers in paper format, in duplicate, and the payers are required to furnish one copy thereof (also in paper format) to the Tax Authority within seven days from end of the month in which such declarations are received.
Under the new procedure effective from 1 October 2015, payees have the option to furnish such declarations in paper format or electronic format. The payer needs to assign a Unique Identification Number (UIN) to each declaration and include the information of UIN in quarterly withholding statements which are usually furnished in electronic form. The new procedure dispenses physical furnishing of copies of declarations to the Tax Authority on a monthly basis which will now form part of reporting in the quarterly withholding statements. However, the new procedure obliges the payers to preserve the declarations for a period of seven years from the end of the financial year in which declarations are received and make them available to the Tax Authority on requisition.
The new procedure considerably simplifies the procedure of receipt of declarations and furnishing of information thereof to the Tax Authority.
The new procedure is a further step by the Government in improving “ease of doing business” and harnessing technology to reduce cost of compliance and ease compliance burden for all stakeholders.
The payers will need to modify their systems for acceptance of declarations in electronic form, allotment of UIN and furnishing of information to the Tax Authority as per procedure, format and standards to be prescribed by the Tax Authority in due course.