Citing disruption in normal working conditions for almost all sectors due to COVID-19, the Finance Ministry on Tuesday extended the validity of all lower withholding tax orders by three months till June 30. The move is expected to ensure continuity of payments amid a cash crunch being faced by companies.
The Central Board of Direct Taxes (CBDT), in its order, said that cases where the application is pending and where such certificates were issued for FY20, the validity of certificates would get extended to June 30 for lower or nil deduction of TDS/TCS is pending for disposal.
The same deadline extension would apply for those assessees who have not been able to apply for such lower/nil deduction certificates for FY21 but were issued such certificates for 2019-20. In cases where the assessee has not applied for issuer of lower or nil deduction of TDS/TCS and does not have any certificate for 2019-20, the CBDT has prescribed a modified procedure for application and subsequent handling by the assessing officer.
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.
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