Taxpayers frequently encounter discrepancies between the Tax Deducted at Source (TDS) credits reflected in Form 26AS and the assessment year in which the corresponding income has been offered to tax. Such mismatches are often attributable to differences in timing arising from mercantile accounting practices or delayed deduction/deposit of TDS by the deductor.
In this context, it is pertinent to note that Rule 37BA of
the Income-tax Rules, 1962 mandates that TDS credit shall be allowed in the
assessment year in which the income is assessable. However, adherence to this
rule in practice has proven to be challenging.
Recognising these practical difficulties, the Central Board
of Direct Taxes (CBDT) has introduced Form 71, an electronic form designed to
facilitate the claim of TDS credit in cases where the deduction of tax at
source has occurred in a subsequent financial year, but the corresponding
income has already been disclosed in an earlier year.
This development represents a substantial step in furthering
taxpayer convenience and ensuring that bona fide TDS credits are not denied
solely due to timing mismatches beyond the taxpayer's control.
Compliance Requirement:
It is imperative that Form 71 be furnished within a period of
two years from the end of the financial year in which the relevant TDS was
deducted.
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