RULE-37BA of the Income Tax Rule

Last Updated On: May 20, 2019, 5:42 p.m.
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RULE 37BA OF THE INCOME TAX RULES, 1962

(1) Credit for TDS and paid to the Central Government in accordance with the provisions of Chapter XVII, shall be given to the person to whom the payment has been made or credit has been given accordingly (hereinafter referred to as deductee) on the basis of information relating to the deduction of tax furnished to the income-tax authority or the person authorized by such authority.

(2) Where under any provisions of the Act, the whole or any part of the income on which tax has been deducted at source is assessable in the hands of a person apart from the deductee, credit for the whole or any part of the tax deducted at source, as the case may be, shall be given to the other person and not to the deductee :

Provided that the deductee files a declaration with the deductor and also the deductor reports the tax deduction in the name of the other person with the info relating to deduction of tax referred to in sub-rule (1).

(ii) The declaration filed by the deductee under clause (i) shall contain the name, address, permanent account number of the person to whom credit is to be given, payment or credit related to which the credit is to be given and reasons for giving credit to such person.

(iii) The deductor shall issue the certificate accordingly for deduction of TDS in the name of the person in whose name credit is shown within the info about deduction of tax in sub-rule (1) and the declaration should be kept in his safe custody.

(3) Credit for TDS and paid to the Central Government :

(i) Credit for TDS and paid to the Central Government, shall be given for the assessment year for which such income is assessable.

(ii) Where tax has been deducted at source and paid to the Central Government and also the financial gain is assessable over number of years, credit for tax deducted at source shall be allowed across those years within the same proportion within which the financial gain is assessable to tax.

(4) Credit for TDS and paid to the account of the Central Government shall be granted on the idea of—

(i) The information relating to deduction of tax furnished by the deductor to the income-tax authority or the person authorised by such authority; and

(ii) The information in the return of income in respect of the claim for the credit, subject to verification in accordance with the danger management strategy developed by the Board from time to time.

This new Rule lays down the manner in which credit would be given for TDS. The said provisions are captured in the below table:

Summary

The issue of granting credit for TDS has always been a complex and problematic one. Now, with clear guidelines being given, one hopes that credit for TDS would be easily obtained. The new Rules would be particularly useful in those cases where there is more than 1 owner of the asset which yields the income. In such cases, the granting of credit for TDS amongst the various owners will become simpler now.

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