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The Tax Publishers Income Tax--Refund Procedure for Claiming Refund While Denying Liability to Deduct Tax in Certain Cases CA. Nisha Bhandari The Finance Act, 2022 has inserted a new section 239A w.e.f. 1-4-2022 so as to provide for procedure for refund while denying liability to deduct tax in certain cases. For the purposes of claiming refund one has to follow the procedure prescribed for this purpose. Recently the CBDT has notified rule 40G so as to prescribe the form and manner for claiming refund under new section 239A. The present write up aims at highlighting such procedure so as to keep abreast the readers with recent procedural developments. 1. Position for claiming refund by person denying liability to deduct tax in certain cases as applicable upto 31-3-2022 Section 195 provides that any person responsible for paying to a non-resident, not being a company, or to a foreign company, any interest (not being interest referred to in section 194LB or section 194LC) or section 194LD or any other sum chargeable under the provisions of this Act (not being income chargeable under the head Salaries) shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rates in force. It happens many a times that the non-resident does not want to bear the tax to be deducted at source because they are of the opinion that their income is not chargeable to tax and thus they want the payer to bear the TDS amount also. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Income Tax--Refund

Procedure for Claiming Refund While Denying Liability to Deduct Tax in Certain Cases

CA. Nisha Bhandari

The Finance Act, 2022 has inserted a new section 239A w.e.f. 1-4-2022 so as to provide for procedure for refund while denying liability to deduct tax in certain cases. For the purposes of claiming refund one has to follow the procedure prescribed for this purpose. Recently the CBDT has notified rule 40G so as to prescribe the form and manner for claiming refund under new section 239A. The present write up aims at highlighting such procedure so as to keep abreast the readers with recent procedural developments.

1. Position for claiming refund by person denying liability to deduct tax in certain cases as applicable upto 31-3-2022

Section 195 provides that any person responsible for paying to a non-resident, not being a company, or to a foreign company, any interest (not being interest referred to in section 194LB or section 194LC) or section 194LD or any other sum chargeable under the provisions of this Act (not being income chargeable under the head Salaries) shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rates in force.

It happens many a times that the non-resident does not want to bear the tax to be deducted at source because they are of the opinion that their income is not chargeable to tax and thus they want the payer to bear the TDS amount also.