TDS Certificates for nil/low TDS rates: Clarification by CBDT

Dinesh Singh | Last updated: 13 April 2020

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Quick Summary

The CBDT has clarified that Nil or Lower TDS/TCS certificates issued for FY 2019-20 remain valid until June 30, 2020. This extension applies even if you haven't filed an application for FY 2020-21 yet, though you must apply by June 30, 2020. For FY 2020-21, the threshold limits for lower or nil deduction will be reset from April 1, 2020, to June 30, 2020, using the same limits as FY 2019-20.

Recently, CBDT has clarified that there is Nil or Lower TDS/TCS certificate issued for a particular period in FY 2019-20 also valid till June 30, 2020.

The CBDT has been receiving several representations from various stakeholders seeking further clarifications on order dated 31.03.2020. Thus for better understanding and clarification, CBDT has introduced the clarification regarding issuance of certificate for lower rate / Nil deduction / collection of TDS/TCS.

1) Issue of validity period of lower / nil deduction / collection certificates for FY 2019-20

Nil/Low TDS Certificates Extended to 30.06.2020

Assessees have filed application for the certificate for FY 2020-21 and applications are pending with the department, in that case Certificates issued for FY 2019-20 would be applicable till 30.06.2020.

If assessees have not filed application for FY 2020-21. In that case also Certificates issued for FY 2019-20 would be applicable till 30.06.2020. However, they need to apply before 30.06.2020 by giving details of the transactions.

2) Issue of threshold / transaction limit for lower / nil deduction / collection certificates for FY 2019-20

The limit will be taken fresh for period from 01.04.2020 to 30.06.2020 for FY 2020-21 and the amount of threshold limit will be the same as was appearing in certificate for FY 2019-20

3) Issue of New / different TAN mentioned for lower/nil deduction/collection application for FY 2020-21 or revision of rates mentioned in certificates of FY 2019-20

If assessees

Do not have such certificate for FY 2019-20 and not applied on TRACES Portal for the same till date
had a certificate for lower deduction for FY 2019-20 and an application has been made for FY 2020-21 for a new or different TAN mentioned in application and
The TDS rates in old certificate are higher and the assessee wants revision of the rates

then a modified procedure for fresh application laid down by CBDT is given in annexure of the directions issued.

DISCLAIMER: THE ARTICLE IS BASED ON THE RELEVANT PROVISIONS AND AS PER THE INFORMATION EXISTING AT THE TIME OF THE PREPARATION. IN NO EVENT I SHALL BE LIABLE FOR ANY DIRECT AND INDIRECT RESULT FROM THIS ARTICLE. THIS IS ONLY A KNOWLEDGE SHARING INITIATIVE.

FAQ :

Yes, certificates issued for FY 2019-20 for nil or lower TDS/TCS rates are valid until June 30, 2020.

If you haven't applied for FY 2020-21, your existing certificate from FY 2019-20 will remain applicable until June 30, 2020. However, you must submit an application by this date.

For the period of April 1, 2020, to June 30, 2020, the threshold limits will be reset for FY 2020-21, using the same amounts as specified in your FY 2019-20 certificate.

If you didn't have a certificate for FY 2019-20, have applied for a new TAN for FY 2020-21, or wish to revise higher TDS rates from your old certificate, a modified procedure for a fresh application is available.

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