CBDT Order u/s 119 of The Income Tax Act, 1961 on issue of certificates for lower rate/nil deduction/collection of TDS or TCS u/s 195, 197 and 206C(9) notifies vide Order No. F. No. 275/25/2020-IT(B) dated 31/03/2020 that Lower TDS Certificate issued under section 197 for FY 2019-20 shall be valid till 30/06/2020.

Taxman to accept application & issue nil/lower tax deduction certificate via email:

Due to outbreak of Covid-19 virus, there is severe disruption in the normal working of almost all sectors, including functioning of the Income tax Department. In such a scenario the applications filed by the payees u/s 195 and 197 of the Act for lower or nil rate of deduction of TDS and applications by buyers/licensees/lessees u/s 206C (9) of the Act for lower or nil rate of collection of TCS for F.Y. 2020-21 have not been attended in a timely manner by the TDS/TCS Assessing officers causing hardship to tax payers.

Considering the constraints of the Field Officers in disposing of the applications for lower or nil rate of TDS/TCS and to mitigate hardships of payees and buyers/licensees/lessees, the CBDT issues following directions/clarifications by exercise of its powers u/s 119 of the Act:

a) For assesse who has already applied for Lower TDS certificate for FY 2020-21

All the assesse who have filed application for lower or nil deduction of TDS/TCS on the TRACES portal for FY 2020-21 and whose application are pending for disposal as on date and they have been issued such certificate for FY 2019-20, then such certificate would be applicable till 30/06/2020 of FY 2020-21 or disposal of their application by the Assessing officer, whichever is earlier, in respect of the transaction   and the deductor or collector if any, for whom the certificate was issued for FY 2019- 20.

b) For assesse who are yet to apply for Lower TDS certificate for FY 2020-21

In cases where the assesse could not apply for issue of lower or nil deduction of TDS/TCS in the TRACES portal for FY 2020-21, but were having certificate for FY 2019-20, such certificate will be applicable till 30/06/2020 of the FY 2020-21. However, they need to apply at the earliest giving details of the transactions and the deductor/collector  to the TDS/TCS assessing officer as per procedure laid down in para c) below, as soon as normalcy is restored or 30/06/2020, whichever is earlier.

c) For Assesse who does not have lower TDS certificate for FY 2019-20

In Case where assesse has not applied for issue of lower or nil deduction of TDS/TCS in the TRACES portal, and he is also not having any such certificate for FY 2019-20, a modified procedure for application and consequent handling by the TDS/TCS assessing officer is laid down which is as follows:

1) Application for Lower/NIL deduction certificate for FY 2020-21:

The applicant shall apply for Lower/Nil certificate under section 197/206C(9) of Income Tax Act vide EMAIL addressed to the concerned assessing officer. The Email shall contain data/documents as under:

1. Duly filed in Form 13

2. The documents/information as required to be uploaded on TDS-CPC website while filling up Form 13 (TAN wise details of projected gross receipt, Tax computation for last 4 years, details of income claimed to be exempted in projected financials, assessment order for last 4 years)

3. Projected balance sheet and P&L for FY 2020-21

4. Provisional balance sheet and P&L for FY 2019-20

5. Audited financials for FY 2018-19

6. Form 26AS for FY 2019-20 and FY 2018-19

7. ITR for FY 2018-19

2) Issuance of Certificate by AO

The certificate shall be issued upto 30/06/2020 or any other date (earlier than 30/06/2020) as specified by the AO. The Certificate issued by AO via Email shall contain following information:

Sr No TAN of deductor PAN of deductee Financial year Section Estimated amount of Income Applicable rate of deduction/ collection Valid from date Valid to date

The issuance of certificate shall be communicated to the applicant who in turn shall share the same with the deductor/collector.

d) TDS @ 10% for Payment made to Non-residents shall

On payments to non-residents (including foreign companies) having permanent Establishment in India and not covered by a) and b) above, tax on payment made will be deducted at the rate of 10% including surcharge and cess, on payments till 30/06/2020 of FY 2020-21, or disposal of their applications, whichever is earlier.

Clarification is still awaited from department for limit of certificate, as their might be situations where limit of FY 2019-20 lower TDS certificate has already been exhausted. For those cases, how limit of certificate shall be finalized by department is still awaited.

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11 Comments

  1. dagduram Shikare says:

    Dear Sir, we have filed qtr 1 return with old Lower TDS Certificate number of FY 2019-20, but short deduction notice generated from TDS CPC.
    Please help us. We have written the same query to CPC but still reply not received.

    1. CA YASH TURAKHIYA says:

      HI,
      TRACES has modified their web portal and now if you search lower deduction certificate u/s 197 for any particular PAN (who has issued you certificate in FY 2019-20) then you will notice that validity of their old certificate is extended till 30/06/2020 (search in FY 2020-21 tab).

  2. swapna says:

    Sir,we have submitted qtr 1 return with old TDS Certificate number of FY 2019-20, but short deduction notice generated on traces. Please let us know solution of it.Vendors have already applied for new certificate but they have not got certificate no from Assessing officer.

  3. swapna says:

    Sir,we have submitted qtr 1 return with old TDS Certificate number of FY 2019-20, but short deduction notice generated on traces. Please let us know solution of it.Vendors have already applied for new certificate but they have not got certificate no from Assessing officer

    1. VIJAY M R says:

      same problem for me also sir While filing TDS return for Q1 FY2020-21, the old TDS Certificate number of FY 2019-20, is being shown as not valid.
      kindly clarify the issue as early as possible.
      we need to file the ETD Return of FY 2020-21 Q 1.

  4. Tarun says:

    Thank you. I have one query.
    Asssessee already has S.197 certificates for FY 2019-20. Understand from the order u/s. 119 that these will continue to be valid until 30-06-2020. What about the monetary threshold that is present in the cerficate?

    Eg. The amount mentioned in certicate is 10000, what if my payment during the first three months of FY 2020-21 crossed 10000 in aggregrate?

    Could you please help throw some light on this?

    1. YASHJ772 says:

      Dear Tarun,

      I had discussion with one of TDS inspector and they are of the view that since circular do not speak about monetary limit, currently we can assume this period as blanket relaxation and whatever amount consumed during these period shall be reduced from existing application made for FY 2020-21 and new certificate will be issued for balance amount only.

      1. VIJAY M R says:

        same problem for me also sir While filing TDS return for Q1 FY2020-21, the old TDS Certificate number of FY 2019-20, is being shown as not valid.
        kindly clarify the issue as early as possible.
        we need to file the ETD Return of FY 2020-21 Q 1.

    2. CA Aravind Jayaraman says:

      Dear Tarun,

      I have gone through your query. The best analysed view is that the limits for the 3 month period (April to June 2020) have to be considered proportionately. i.e. If the limit for the FY 2019-20 certificate is Rs. 100,000/-, then the limit for the 3 month extended period is Rs. 100,000 x 3/12= Rs, 25,000/-.

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