The Central Board of Direct Taxes (CBDT) in an order has allowed taxpayers who have filed for lower TDS/TCS (tax deduction at source/tax collected at source) for FY 21 and whose application is pending for disposal as on date to extend the period of their FY20 order on lower TDS by three months to June 30, 2020.
The extension will also be given if taxpayers have the lower TDS order for FY20 but have so far not applied similar order for FY21.
However, taxpayers need to apply at the earliest giving details of the transactions and the Deductor/Collector to the TDS/TCS Assessing Officer as per procedure prescribed.
Further, on payments to non-residents (including foreign companies) having permanent establishment in India, where the above applications are pending, tax on payments made will be deducted at the subsidised rate of 10 per cent including surcharge and cess, on such payments till June 30 or disposal of their applications, whichever is earlier.
In case of pending applications for lower/nil rate of TDS/TCS for FY 2019-20, the Assessing Officers have also been directed to dispose off the applications through a liberal procedure by April 24, so that the taxpayers may not have to pay extra tax which may cause liquidity issues to them.
To mitigate the hardships of small taxpayers, it has also been decided that if a person had submitted valid Forms 15G and 15H to the Banks or other institutions for FY 2019-20, then these Forms would be valid up to 30.06.2020. This will safeguard the small tax payers against TDS where there is no tax liability.