Saturday, September 2, 2023

A Simple Guide to Claiming TDS Credit with Form No. 71 where TDS not in 26AS

 Introduction: The Central Board of Direct Taxes (CBDT) has introduced Rule 134, in conjunction with Form No. 71, to streamline the process of claiming tax deduction at source (TDS) credits. This development aligns with the Finance Act of 2023, which introduced sub-section (20) to Section 155, set to become effective on October 1, 2023. Sub-section (20) addresses cases where income was reported in one assessment year but subjected to TDS in a subsequent financial year. To facilitate this, CBDT issued Rule 134 through Notification No. 73/2023 dated August 30, 2023.

Benefits and Importance for Assessees: Before diving into the procedural details, it's crucial to understand the significance of these new rules and the benefits they offer to taxpayers.

Benefits for Assessees:

1.    Tax Relief: Claiming TDS credit prevents double taxation, reducing your financial burden.

2.    Compliance: This process enables effective compliance with tax regulations, avoiding disputes and penalties related to TDS discrepancies.

3.    Simplified Process: The introduction of Form No. 71 simplifies the application process, making it more accessible.


1.    Fair Taxation: Rule 134 and Form No. 71 promote fairness in taxation by allowing taxpayers to claim credit for tax deductions, aligning with the principle of avoiding double taxation.

2.    Compliance and Transparency: These rules enhance compliance with tax regulations and ensure transparency within the income tax system.

3.    Reduction of Litigation: By providing a clear and standardized method for claiming TDS credit, these rules reduce the likelihood of disputes and litigation between taxpayers and tax authorities.

Now, let's break down the action plan and procedure for utilizing Form No. 71 and complying with Rule 134 effectively:

Action Plan and Procedure:

Step 1: Understand the Basics

·         Confirm your eligibility to claim TDS credit under sub-section (20) of section 155.

·         Gather the necessary information and documents for the application process.

Step 2: Access Form No. 71

·         Form No. 71 is the official application for claiming TDS credit under Rule 134.

·         You can access the form electronically, either through digital signature or electronic verification code.

Step 3: Complete Form No. 71

·         Provide accurate information in the form, including:

·         Your name (the applicant)

·         Your PAN and Aadhaar number (if available)

·         Name of the person for whom the application is being submitted (if different from you)

·         PAN of the person for whom the application is being submitted (if different from you)

·         Indicate whether the deductee is a resident or non-resident

·         Your address, PIN/Zip Code, email ID, and mobile number

·         Relevant Assessment Year and subsequent financial year

·         Date on which the return of income for the relevant assessment year was furnished

Step 4: Provide Details about Specified Income

·         Use the provided table to list the following details for each specified income:

·         Total income/deemed total income/loss for the relevant assessment year

·         Amount of specified income included in the return of income

·         Nature of specified income

·         Rate at which the specified income was subject to tax

·         Amount of tax deducted on specified income in the subsequent financial year

·         Date of tax deduction

·         Date of payment of tax deducted to the Central Government

·         Section of the Income-tax Act 1961 under which tax was deducted

·         Amount of tax claimed for the relevant assessment year

·         Name of the deductor, TAN (Tax Deduction and Collection Account Number) of the deductor, and PAN of the deductor

Step 5: Verification

·         Sign and date the verification section of Form No. 71.

·         Declare that the information provided is correct and complete.

·         Confirm that you haven't claimed TDS credit on the specified income in any other assessment year.

·         Specify your capacity and competency to make this application.

Step 6: Submit Form No. 71

·         Submit Form No. 71 electronically, as specified in Step 2.

·         Ensure that the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) receives the form.

·         They will forward Form No. 71 to the Assessing Officer.

Additional Notes:

·         Keep in mind the following additional notes:

·         Provide information about predecessor and successor entities if applicable.

·         Submit a separate form for each relevant assessment year.

·         Report total income/deemed total income/loss as per the latest intimation/assessment/re-assessment/rectification/re-computation order.

Importance of the Circular: The circular, along with Rule 134 and Form No. 71, holds immense importance for taxpayers as it simplifies the process of claiming TDS credits. By providing clear guidelines and a standardized application format, it enhances transparency, compliance, and fairness in the taxation system. Moreover, it reduces the potential for disputes and litigation, ensuring a smoother experience for taxpayers.