A recent form notified for the purpose of availing the TDS credit in respect of income disclosed in tax returns filed in earlier years.

Background

• TDS credit can be claimed only when the corresponding income is offered to tax. In cases where tax is deducted in a particular assessment year and the income is offered to tax in the subsequent year; the TDS credit shall be carried forward and would be available in the subsequent assessment year.
• However, in cases where income is offered to tax in a particular assessment year and tax is deducted in the subsequent year, TDS credit was not available earlier.
• For this purpose, section 155(20) was introduced in the Finance Act, 2023 to address this issue wherein taxpayers can make an application to the Assessing Officer within two years from the end of the financial year in which TDS was deducted to claim credit of such TDS.

Key takeaways from the notification

• CBDT vide Notification 73/2023 has notified Form 71 whereby taxpayers can furnish Form 71 electronically using digital signature in case return of income is required to be furnished under digital signature (OR) electronic verification code (‘EVC’) in other cases.
• On making such an application, the Assessing Officer shall amend the order of assessment or intimation (as applicable), allowing credit of such TDS in the year in which the income is offered to tax.
• For each relevant assessment year, separate forms should be furnished.
• Total income/deemed total income/loss should be reported in the form as per latest intimation/ assessment/ re-assessment/ rectification / re-computation order, as the case may be.
• This shall come into force with effect from October 1, 2023.