How to claim my unclaimed TDS credits in my Income tax returns?

CBDT notifies Form 71 to allow TDS credit in respect of income disclosed in ITR filed in earlier years:

Normally as a general practice in filing of Income Tax Return (ITR), an assessee reports its income which was earned by it during the previous year and claims credit of TDS deducted on such income.

Issue:

However, for all these years there is some flaws in this process of claiming the credit of TDS. The flaw is where an assessee has reported its income on accrual basis in one year, however TDS has been deducted in subsequent year or when no TDS has been deducted till the filing of ITR of deductee and same has been deducted and deposited belatedly or TDS return was being revised by the deductor subsequent to the filing of ITR by deductee, etc.; there comes a mismatch in TDS credit claimed in the ITR and TDS reflected in 26AS due to which assessee has to face a lot of problems.

Solution:

Earlier, as a solution to the above problem, assessee was supposed to revise its ITR (if due date was not surpassed) or to file an offline rectification application with the jurisdictional assessing officer (AO) to claim the refund of the excess TDS which was not reflecting in 26AS at the time of filing of ITR but reflecting after it due to various possible reasons as mentioned above.

However, due to lack of infrastructure, most of these applications filed by the assessee remains unresolved and assessees’ were not getting back their due refunds from the department.

To curb this flaw, the CBDT has proposed to inserte a new provision in the Income Tax Act, 1961 (the Act) vide Finance Act 2023. A new clause had been inserted under Section 155 of the Act read with relevant income tax rules to enable the assessee to make application to the AO for amending the assessment order/intimation and allowing the credit of such TDS.

Following the above amendment, CBDT vide notification dated 30.08.2023 has inserted a new Rule 134 and notifies Form no. 71 to enable the assessee to make an application for rectifying the assessment or intimation order and for allowing the TDS credit.

This application has to be made within a period of two years from the end of the financial year in which TDS has been deducted.

Overall view of FORM 71:

1. Applicability: This provision is applicable from 01st Oct 2023

2. Benefits of Form 71:

• • Taxpayers can claim the TDS in the same year in which income was shown even though the TDS is not reflecting in Form 26AS for same year.
• • It removes the hardship faced by taxpayers in resolving the TDS issues. Taxpayers are not required to approach the deductor’s and follow up with them regarding TDS revision and correction.
• • It is simple and easy form which can be filed online in income tax portal.

3. Required details for filing Form 71:

4. Time limit to file form 71: within 2 years of the financial year in which the TDS was deducted.

5. How to file Form 71?

• • Login to https://eportal.incometax.gov.in/iec/
• • Go to E File >> Income Tax Forms >> File Income Tax Forms

• • Go to "Persons not dependent on any source of income" tab and Click on File now on "Procedure for Assessment" (Form 71)

• • Select the Relevant Assessment year for which Form 71 is being filed
• • Click on Let’s get started and there will be 2 tabs called "Basic Information and Details of Computation of Income" and Attachments and Verification

• • Click on Basic Information and Details of Computation of Income and enter the details required.
• • Upload the supporting documents and click on Save.
• • Do the E Verification through Aadhaar OTP or Bank EVC or Net Banking.

There are a few reasons why a penalty may be levied while using Form 71: