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A scheme for dematerialisation of Tax Deducted at Source (TDS)/ Tax

Collected at Source (TCS) certificates was introduced through the Finance Act, 2004, with effect from 01.04.2005 for any deduction or collection of tax at source made on or after 01.04.2005. The commencement of this scheme was postponed to 01.04.2006 by the Finance Act, 2005 and later to 01.04.2008 by the Finance Act, 2006. Since the national level information technology infrastructure of the Income-tax Department is not yet fully operational, the commencement of the scheme has been extended to 01.04.2010.

The system of allowing credit to the assessee for TDS/TCS needs a certain degree of flexibility considering the ongoing technological and business process changes. Providing rigorous conditions regarding the method of giving credit for TDS/TCS in the Act itself,makes the system difficult to restructure and implement according to the changing technological environment.

In view of this, section 199 and sub-section (4) of section 206C have been amended providing that the manner in which credit of TDS/TCS is to be given will be governed by Rules to be framed under section 199 & sub-section (4) of 206C i.e. the

Board may make such rules as may be necessary for the purpose of giving credit in respect of TDS/TCS or tax paid by employer on perquisite under sub-section (1A) of section 192.

35.4 Applicability: This amendment has been made applicable with effect from 1st April, 2008.

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June 2024