CBDT said that assessees holding valid certificates for FY20 would get the benefit of extension, which otherwise would expire on March 31.
The central board of direct taxes (CBDT) on Tuesday extended the validity of nil or lower withholding tax certificates till June 30 for taxpayers having the document for FY20, which is to expire on March 31. The order would remove uncertainty over cash flow management, experts said.
CBDT said that assessees holding valid certificates for FY20 would get the benefit of extension, which otherwise would expire on March 31. This would be applicable for all such assessees irrespective of whether they have applied for a fresh document for FY21 or not.
Further, the Board’s order also prescribed a 10% withholding rate till June 30 on payments to non-residents, including foreign companies, having permanent establishment in India but not covered by the any other scenario.
“This order will ensure continuity of payments to contractors/service providers, both resident as well as non-resident, where for specific reasons such as character of income, tax treaty benefits, estimated losses, etc., respective taxpayers were authorised to receive payments, either without deduction of taxes or deduction at a lower rates,” Rakesh Nangia, chairman of Nangia Andersen Consulting, said.
He added that such orders are very important for cash flow management of both resident as well as non-resident taxpayers, and in present circumstances, when taxpayers and businesses are already facing severe liquidity and cash flow issues, such extension is a much welcome step by the government.