The Income Tax Department has issued Form 71 to help taxpayers rectify incorrect TDS deductions. Individuals can submit requests from October 1.
The due date for filing income tax returns on time for FY 22-23 ended on July 3. A lot of people have received their refunds. But the authorities have not yet managed to process the refunds of many taxpayers. A lot of mistakes can happen while filing ITR such as entering the wrong financial year. This can result in the authorities deducting TDS in the incorrect financial year. Those seeking a solution to resolve the issue can now directly approach the Income Tax Department without having to contact their tax deductor.
The Central Board of Direct Taxes (CBDT) has recently issued Form 71 which taxpayers can use to correct the wrong TDS credit for any financial year. The form was notified through a circular issued on August 30, 2023.
What is Form 71 important for incorrect TDS filing?
Form 71 has been initiated in the wake of several taxpayers facing the issue of their tax being deducted in the financial year in which the income was actually paid to the assessee. Many individuals declare their income when it is due to them instead of when it is paid or credited to their bank accounts. This results in a mismatch in the TDS credit. To resolve this problem, the CBDT has issued Form 71. The application resolves the hassles people face in approaching the authorities for reassessment of their TDS.
Time limit to use Form 71
As per the Income Tax Act 1961, taxpayers have a deadline of two years to use Form 71 for correcting a wrong TDS credit issue.
How to rectify incorrect TDS filing?
Those wanting to correct the year of their TDS deduction can start submitting requests from October 1 by directly contacting the Income Tax Department.
Steps to submit Form 71:
1. Go to the e-filing portal of the Income Tax Department at incometax.gov.in and download the form.
2. Fill in the required details including the taxpayer's name, PAN, and address, the assessment year in which the income was declared in the ITR, the financial year in which the TDS was deducted, the amount of TDS deducted, and finally the reason for claiming TDS credit.
3. The form must be duly signed by the claimant and submitted to the tax authorities for verification. The form must be verified with an electronic verification code (EVC) or with a digital signature certificate (DSC).
The tax authorities will act on the claim and issue a refund if they find the issue to be valid.
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