End of TDS Crdit Mismatch

Introduction

The Finance Act of 2023 introduced a new sub-section (20) to Section 155, which comes into effect from October 1, 2023. This newly added sub-section applies in cases where income has been reported in an income tax return for a particular assessment year, but the tax was deducted at source (TDS) in a subsequent financial year. To facilitate this amendment, the CBDT vide Notification No. 73/2023 dated August 30, 2023, has introduced a new Rule 134 into the Income-tax Rules, 1962. This rule mandates the submission of Form 71 to claim TDS credit in such scenarios.

Section 155(20)-

(20) Where any income has been included in the return of income furnished by an assessee under section 139 for any assessment year (herein referred to as the relevant assessment year) and tax on such income has been deducted at source and paid to the credit of the Central Government in accordance with the provisions of Chapter XVII-B in a subsequent financial year, the Assessing Officer shall, on an application made by the assessee in such form, as may be prescribed, within a period of two years from the end of the financial year in which such tax was deducted at source, amend the order of assessment or any intimation allowing credit of such tax deducted at source in the relevant assessment year, and the provisions of section 154 shall, so far as may be, apply thereto and the period of four years specified in sub-section (7) of that section shall be reckoned from the end of the financial year in which such tax has been deducted:

Notification No. 73/2023 dated August 30, 2023

G.S.R. 637(E).—In exercise of the powers conferred by sub-section (20) of section 155 read with section 295 of the Income-tax Act, 1961, the Central Board of Direct Taxes, hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:–

1. Short title and commencement.— (1) These rules may be called the Income-tax (Twentieth Amendment) Rules, 2023.

(2) They shall come into force from the 1st day of October, 2023.

2. In the Income-tax Rules, 1962 (hereinafter referred to as the principal rules), after rule 133, the following rule shall be inserted, namely—

“134. Application under sub-section (20) of section 155 regarding credit of tax deduction at source. —

(1) The application required to be made by the assessee under sub-section (20) of section 155 shall be in Form No. 71.

(2) Form No. 71 shall be furnished to the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) or the person authorised by the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems).

(3) Form No. 71, shall be furnished electronically, —

(i) under digital signature, if the return of income is required to be furnished under digital signature;

(ii) through electronic verification code in a case not covered under clause (i).

(4) The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be, shall specify the procedures for furnishing Form No. 71 and shall also be responsible for formulating and evolving appropriate security, archival and retrieval policies in relation to the form so furnished.

(5) The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be, or any person authorised by the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) shall forward Form No. 71 to the Assessing Officer.”.

3. In the principal rules, after Form No. 70, the following Form shall be inserted, namely:-

“FORM NO. 71
[See rule 134]
[e-Form]

Application under sub-section (20) of section 155 for credit of tax deduction at source (TDS)

(1) Name of the person furnishing the application PAN of the person in respect of which the application :

(2) PAN and Aadhaar number (if available) of the person furnishing the application :

(3) Name of the person in respect of which the application is being furnished (if different from (1) (See note 1) :

(4) PAN of the person in respect of which the application is being furnished (if different from (2)) (See note 1) :

(5) Whether the deductee is resident or non-resident? :

(6a) Address of the person furnishing the application :

(6b) PIN/ Zip Code of the person furnishing the application :

(7) E-mail Id :

(8) Mobile Number :

(9) Relevant Assessment Year referred to in sub-section (20) of section 155 (see Note 2) :

(10) Subsequent financial year referred to in sub-section (20) of section 155 :

(11) Date on which return of income for relevant assessment year was furnished (dd/mm/yyyy) :

(12) Details with reference to Relevant Assessment Year referred to in (9) :

TABLE

*Specified income means any income referred to in sub-section (20) of section 155 which has been included in the return of income of relevant assessment year and tax on such income is deducted at source and paid to the credit of the Central Government in accordance with the provisions of Chapter XVII-B in a subsequent financial year.

VERIFICATION

I…………………………………………son/daughter of……………… having PAN/Aadhaar number…………………………….. do hereby declare that: –

a) To the best of my knowledge and belief what is stated above is correct, complete and truly stated.

b) I have furnished the return of income in which such specified income was included, for the relevant assessment year under section 139.

c) I have not claimed credit for the tax deducted at source on the specified income claimed in Form No. 71 in any other assessment year and will not claim the same.

d) I also declare that I am making application in my capacity as ………………………………. of ……………………………… and I am also competent to make this application and verify it.

Date: Signature:

Place: Address:

Note:

1. Information in Row no. (3) and (4) would be required where:

(i) the successor entity is furnishing the Form for predecessor entity who is no longer in existence

(ii) the Form is furnished by the legal heir of deceased person

Separate Form must be furnished for each predecessor entity if there is more than one predecessor and separate Form must be furnished for successor.

2. For each relevant assessment year, separate form should be furnished.

3. Total income/deemed total income/loss should be reported as per latest intimation/ assessment/ re-assessment/ rectification / re-computation order, as the case may be.

4. For more than one entry, separate rows may be filled.