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Form 29D to get refund of tax deducted under section 195 – Insertion of new section 239A and Rule 40G

The Finance Bill 2022 had proposed an amendments in the provision of  Section 248 and Insertion of Sec 239A to ease the Non Residents whose income other than interest is taxed under section 195 to get the refund.

As per the existing provisions of Sec 248, a person who has deducted tax on any income  other than interest paid to a non-resident  under an agreement or arrangement was required to approach and file an appeal  before the Commissioner (Appeals) for a declaration that no tax was deductible on such income, if he claims that such tax is to be borne by him since no tax was required to be deducted on such income. Such appeal can be filed after making payment of tax so deducted to the credit of the Government account.

Further, section 249 of the Act lays down that an appeal under section 248 of the Act should be filed within 30 days of making payment of such tax to the Government.

A taxpayer in order to obtain the refund had no approach to the Assessing officer to make a request of refund of tax deducted. As per section 248 he was required to file an appeal before the Commissioner (Appeals) along with the Agreement or arrangement entered into.

By considering the above facts there was a proposal to amend the provisions of Section 248 and insert a new section 239A with effect from 1st April 2022

The CBDT has now vide notification G.S.R.634(E) dated 17th august 2022 introduced Rule 40G wherein the manner in which the application for refund can be filed is prescribed. As per Rule 40G in order to get the refund of tax deducted by a taxpayer on the income of Non resident other than interest under section 195, Form 29D has to be filed before the Assessing officer.

Sec 239A provides the taxpayer to raise a request for refund of Tax deducted under Section 195 under an agreement or arrangement and no such tax deduction was required may file an application for refund before the Assessing Officer to get the refund of TDS under section 195

The application before the Assessing officer is required to be filed within 30 days from the date of payment of tax liability.

After receiving the order from the AO if such person is not satisfied with the order may file an appeal with the Commissioner (Appeals) as per the provisions of sec 246A. If the date of appeal and date of tax payment is on or after 1st April 2022 the provisions of Sec 248 will not be applicable.

Below is the list of details sought for in the New Form 29D

Details of applicant:

a) Status (State whether individual, Hindu Undivided Family, Firm, Body of Individuals, Company)

b) Residential status (Resident/ Resident but not ordinarily resident/ Non-resident during the relevant year)

c) Permanent Account Number or Aadhaar Number

d) E-mail ID

e) Mobile Number

2. Details of the deductee

a) Name

b) Status (State whether individual, LLP, Firm, Body of Individuals, Company etc.)

c) Permanent Account Number (if available)

d) E-mail ID

e) Mobile Number

f) Country of which the deductee was a resident in the relevant Assessment Year

3. Details of agreement or other arrangement (Please attach a copy of the same with this application)

a) Date of signing the agreement or other arrangement

b) Date on  which  the  agreement  or  other  arrangement  came into effect

c) Time Period for  which  the  agreement or  other arrangement is effective

4. Details of transaction on which tax not deductible has been deducted

a) Amount of transaction (in INR)

b) Date of transaction

c) Date of payment made

d) Mode of payment (Please attach a copy of proof of payment) (e) Nature of transaction

5. Details of tax deducted on transaction specified in point (iv) above

a) Amount of tax deducted (in INR)

b) Date of tax deduction

c) Date on which the tax deducted was deposited in Government Account

d) Details of challan

6. Details of Payment

a) BSR Code

b) Date of deposit in Government Account

c) Serial Number of the challan

d) Amount (Rs)

Please explain why no tax was required to be deducted on the income in the relevant transaction

Please state whether tax deducted on similar transaction has been refunded in 3 years prior to the relevant previous year? (If yes, please give the following details (Yes/No)

a) Relevant Assessment Year

b) Date of transaction

c) Amount of tax deducted

d) Amount of tax refunded

e) Date of order of Commissioner (Appeals) or the Assessing Officer, as the case may be (Please attach copy of order with this form

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April 2024