Taxpayers with short deduction of TDS post surcharge hike in FY20 to pay up before filing ITR: CBDT

Taxpayers with income of Rs 2 crore and above who have not deposited increased surcharge while calculating their TDS during 2019-20 fiscal will have to do so before filing their income tax returns, the I-T department has said.

The 2019-20 Budget, which was presented on July 5, 2019, had hiked surcharge to 25 per cent for those with income of Rs 2 crore to Rs 5 crore and to 37 per cent for those with income above Rs 5 crore. The rate of surcharge was 15 per cent earlier.

The increased surcharge was applicable from the beginning of the fiscal, or April 1, 2019.

Hence, tax deducted at source (TDS)/tax collected at source (TCS) was required to be deducted/collected after taking into account the enhanced rate of surcharge.

In a clarification, the Central Board of Direct Taxes (CBDT) said several cases have come to its notice wherein deductors/collectors were held to be an assessee in default for short deduction of TDS/short collection of TCS for transaction which happened between April 1 and July 4.

Thus, to mitigate genuine hardships, CBDT has laid down 4-point conditions, upon fulfilment of which the deductor/collector shall be not held as assessee in default. It also provides for interest waiver subject to conditions.

The CBDT also clarified that this relaxation "does not absolve the deductee/payee to pay proper tax including enhanced surcharge by advance tax or self assessment tax and file return of income after paying such tax."