The Central Board of Direct Taxes (CBDT) in its order has provided a big relief to taxpayers with respect to their pending applications for lower or nil deduction of tax deducted at source (TDS)/ tax collection at source (TCS).The department said in cases where such certificates were issued for fiscal 2019-20, their validity would get extended to June 30, 2020.
Even those assessees who have not been able to apply for lower/nil deduction certificate for fiscal 2020-21 but were issued such certificates for 2019-20, such certificates will be valid till June 30, 2020, the tax department said.
The CBDT has issued a modified procedure for application and consequent handling by the assessing officer in cases where the assessee has not applied for issuance of lower or nil deduction of TDS/TCS and does not have any certificate for 2019-20.
The order also prescribes a 10 per cent withholding tax rate on payments to Non-Residents (including foreign companies) having Permanent Establishment in India and not covered by the above scenarios) till June 30 or disposal of application, whichever is earlier.
The CBDT said due to the outbreak of COVID-19 there was severe disruption in the normal working of almost all sectors, including functioning of the Income Tax Department.