TDS deducted in wrong FY can be corrected from Oct 1 onwards TAXCONCEPT

Introducing Form No. 71: A Game-Changer for Resolving TDS Mismatches: CBDT has just issued Notification No. 73/2023 on August 30, 2023, and it’s a game-changer for tax professionals. Let’s break down the key points you need to know:

  • New Rule 134: CBDT has introduced Rule 134 pursuant to Section 155(20), which was recently brought in by the Finance Act, 2023. This rule addresses a crucial aspect of claiming tax credit for deductions at source.
  • Form No. 71: To apply under Section 155(20), you’ll need to use Form No. 71. This form is central to the process and should be your first step.
  • Submission Process: Form No. 71 must be submitted to PDGIT (Systems), the DGIT (Systems), or an authorized person designated by them. Ensure you follow the prescribed submission channels.
  • Electronic Submission: You have the option to furnish Form No. 71 electronically. It can be submitted using either a Digital Signature Certificate (DSC) or an Electronic Verification Code (EVC), depending on how you are filing your return.
  • Procedures and Policies: PDGIT (Systems) and the DGIT (Systems) are responsible for specifying the procedures for submitting Form No. 71. They will also formulate security, archival, and retrieval policies to safeguard your forms.
  • Forwarding to the AO: PDGIT (Systems), DGIT (Systems), or their authorized representatives will forward Form No. 71 to the Assessing Officer (AO).
  • Effective Date: This new Rule 134 will come into force from October 1, 2023.

Example: Imagine you earned FD interest of Rs 1 lakh in FY 2022-23 (AY 2023-24), and the bank mistakenly deducted TDS in FY 2023-24 (AY 2024-25).

The result?

You can’t claim TDS credit in FY 2023-24 (AY 2024-25) for an income that was actually taxable in FY 2022-23 unless rectified by the bank.

But here comes to Form 71: starting from October 1, 2023, you can skip the bank visit and directly contact the income tax department using this form.

This form works wonders for resolving TDS mismatches from previous financial years, providing a lifeline to countless taxpayers who have faced this predicament.

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