The CBDT has notified Form 71 to e-file rectification u/s 155(20) to allow TDS in cases where assessee has claimed the TDS but deductor has paid the TDS in subsequent assessment years and department disallows the credit since its is not reflecting in 26AS of the year in which TDS was claimed, as per new provision inserted by Finance Act 2023.

The Finance Act 2023 introduced a new sub-section (20) to Section 155 of the Income Tax Act 1961, which provides for this facility. This new provision came into effect from 1st October 2023.

To claim TDS credit under this provision, the taxpayer must submit Form 71 to the tax authorities. The form can be downloaded from the website of the Income Tax Department.

Section 155(20) enables the assessee to file Form 71 to the tax authority within two years from the end of the financial year in which the tax was deducted, and the tax authority will amend the assessment order or any intimation and allow credit for the tax in the relevant financial year in which the tax was deducted.

To implement this provision, the Central Board of Direct Taxes (CBDT) issued Income-tax (Twentieth Amendment) Rules, 2023 and inserted Rule 134. This Rule mandates the assessee to furnish an application in Form No. 71.

This form shall be furnished electronically with digital signature certificate or through the electronic verification code. It seeks the following information from the assessee:

• Personal details (Name, Address, PAN, Aadhaar, Residential Status, E-mail Id, Mobile Number and relevant assessment year, date of furnishing return of income etc.).
• Total income of the assessee in the relevant assessment year in which ITR has been filed, amount of specified income and rate at which such specified income was subject to tax.
• Amount of tax deducted, date of deduction of tax, section and rate at which tax deducted, date of payment of tax deducted to the Central Government and amount of tax claimed for the relevant assessment year.
• Name, PAN and TAN of deductor.

The form must be signed by the taxpayer and submitted to the tax authorities along with a copy of the ITR in which the income was declared.

The tax authorities will then verify the information provided in the form and allow the TDS credit, if it is valid. The introduction of Form 71 is a welcome move by the government as it will help taxpayers to claim TDS credit for income that has been declared in their ITRs, even if the TDS was deducted in a subsequent financial year. This will help taxpayers to save money on their taxes.

To Download official notification, click here.

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