Friday, 1 September 2023

New Rule 134 & Form 71.

 Rule 134 - Application u/s 155(20) regarding credit of tax deduction at source

The Central Board of Direct Taxes (“CBDT”) has issued a new rule, Rule 134, along with Form No. 71, related to the application u/s 155(20) for the credit of tax deduction at source (TDS) vide notification no 73/2023 dated 30th August 2023.

The Finance Act, 2023 inserted section 155(20) in the Income Tax Act, 1961 to provide to relief to taxpayers who have offered the income received during the year to tax but the tax deducted at source(“TDS”) thereon has not been paid to the credit of the central government till the filing of return of income, therefore the taxpayer is not able to claim the credit for the tax so deducted.

Section 155(20) provides that if any income is included in the return of income of any assessment year and the TDS deducted on such income has been deposited in any subsequent financial year, then on an application made by the taxpayer in the prescribed form within 2 years from the end of the subsequent financial year in which the tax was deducted at source, the Assessing Officer will amend the assessment order/intimation giving credit for the tax so deducted.

The time limit for rectification in such cases has to be calculated as 4 years from the end of the subsequent financial year.

In this regard, CBDT vide rule 134 has notified Form 71 - Application under sub-section (20) of section 155 for credit of tax deduction at source (TDS) for availing the credit of TDS deducted and paid in subsequent financial year, in the relevant assessment year, in which income is offered to tax. This rule shall come into force on 1st October 2023.

Form 71 is to be furnished electronically to the Principal Director General of Income Tax (Systems),(PDGIT(Systems) or Director General of Income Tax(Systems)(DGIT(Systems), which will be then forwarded to the Assessing Officer.

The details required to be furnished in the Form 71 are as under:

1.     Name

2.     PAN of the Applicant

3.     Aadhaar (if available)

4.     Residential Status

5.     Address

6.     Pin/Zip Code

7.     Email ID

8.     Mobile Number

9.     Relevant Assessment year in which Income is offered to Tax

10.  Subsequent Financial year in which TDS is paid

11.  Date on which the return of income is filed

12.  Total Income of the relevant year as per latest order

13.  Amount of income on which tax deducted and paid in subsequent financial year

14.  Nature of Such Income

15.  Rate at which the income was offered to tax

16.  Amount of TDS on such income

17.  Section & rate of TDS on such income

18.  Date of Deduction & payment of TDS on such income

19.  Amount of TDS so deducted being claimed

20.  Name, TAN & PAN of Deductor

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