CBDT Notifies Rule 40G and Form 29D to Claim Refund under section 239A for TDS under section 195

CBDT vide Notification No. 98/2022 dated 17.08.2022 in G.S.R. 634(E) through Income-tax (26th Amendment) Rules, 2022 inserted new Rule 40G in the Income-tax Rules, 1962 (‘Rules’) for claiming refund of TDS under section 239A of the Income-tax Act, 1961 (‘Act’) and also notified Form No. 29D for making such claim of refund before the Assessing Officer.

Finance Act 2022 has inserted a new section 239A in the Act to provide that a taxpayer may file an application before the Assessing Officer to get the refund of tax deducted under section 195 on any income, other than interest, if no tax deduction was required.

As per section 239A, such an application is required to be filed within a period of 30 days from the date of payment of such tax in the prescribed form and manner.

The new Rule 40G prescribes the manner to claim the refund of tax in accordance with the provisions of section 239A.

Rule 40G provides that a claim for refund of tax under section 239A shall be made in Form No. 29D which shall be accompanied by a copy of an agreement or other arrangement referred to in section 239A.

For this purpose, consequential amendment is also made in the provisions of section 248 of the Act.

Section 248 of the Act provided that in a case where, under an agreement or other arrangement, a person who has deducted tax on any income paid to a nonresident, other than interest, under section 195 of the Act, he may appeal to the Commissioner (Appeals) for a declaration that no tax was deductible on such income, if he claims that such tax is to be borne by him since no tax was required to be deducted on such income. Such appeal can be filed after making payment of tax so deducted to the credit of the Government account. 

Further, section 249 of the Act lays down that an appeal under section 248 of the Act should be filed within 30 days of making payment of such tax to the Government account.

To obtain a refund of the tax deducted and paid by a person, where it was not deductible, as per the provisions of section 248 of the Act, a taxpayer has no recourse to approach the Assessing Officer with such request. He has to necessarily enter the appellate process by filing an appeal before the Commissioner (Appeals). At the same time, the agreement or arrangement, under which the tax has been deducted and paid, is not brought on the record of the Assessing Officer or examined by him. 

In view of mitigating the hardships and rationalizing the refund procedure under such circumstances, a new section 239A is inserted in the Act to provide that such a person, who has made the deduction of tax under such an agreement or arrangement and borne the tax liability, when no tax deduction was required, may file an application for refund of such tax deducted before the Assessing Officer.

The Assessing Officer may allow or reject the application and is required to pass an order in writing to this effect. 

The order of the Assessing Officer is appealable under section 246A of the Act and if such a person is not satisfied with the order of the Assessing Officer, he may go into appeal against such order before the Commissioner (Appeals) under section 246A of the Act.

Accordingly, the provisions of section 248 of the Act will not apply in cases where the date of tax payment, to the credit of the Central Government, is on or after 01.04.2022.

These amendments have come into effect from 1 st April, 2022.

Read the full text of CBDT Notification No. 98/2022 dated 17.08.2022 on Claim of Refund in Form 29D

MINISTRY OF FINANCE 

(Department of Revenue) 

(CENTRAL BOARD OF DIRECT TAXES) 

NOTIFICATION 

New Delhi, the 17th August, 2022 

INCOME TAX

G.S.R. 634(E).—In exercise of the powers conferred by sub-section (1) of section 239A read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend Income-tax Rules, 1962, namely:-

1. Short title and commencement. —(1) These rules may be called the Income-tax (26th Amendment) Rules, 2022. (2) They shall come into force from the date of their publication in the Official Gazette.

2. In the Income-tax Rules, 1962 (hereinafter referred to as the principal rules),–

(I) in Part VIII, before rule 41, the following rule shall be inserted, namely:- 

“40G. Refund claim under section 239A.–(1) A claim for refund under section 239A shall be made in Form No. 29D.

(2) The claim under sub-rule (1) shall be accompanied by a copy of an agreement or other arrangement referred to in section 239A.

(3) The claim under sub-rule (1) may be presented by the claimant himself or through a duly authorised agent.”;

(II) in rule 41, in sub-rule (1), after the words and figures “under Chapter XIX” the brackets, words and figures “(other than under section 239A)” shall be inserted.

3. In the principal rules, in Appendix-II, after the Form No. 29C, the following Form shall be inserted, namely:—

“Form No. 29D

(See rule 40G)

Application by a person under section 239A of the Income-tax Act, 1961 for refund of tax deducted 

To 

The Assessing Officer, 

This application is filed to seek refund of the tax deducted and paid to the credit of Central Government, the particulars of which are as under

2. Detailed particulars
(i)	Details of applicant:
	(a) Status (State whether individual, Hindu Undivided Family, Firm, Body of Individuals, Company etc.)
	(b) Residential status (Resident/ Resident but not ordinarily resident/ Non- resident during the relevant year)
	(c) Permanent Account Number or Aadhaar Number
	(d) E-mail ID
(ii)	Details of the deductee:
	(a) Name
	(b) Status (State whether individual, LLP, Firm, Body of Individuals, Company etc.)
	(c) Permanent Account Number (if available)
	(d) E-mail ID
	(e) Mobile Number
	(f) Country of which the deductee was a resident in the relevant Assessment Year
(iii)	Details of agreement or other arrangement  (Please attach a copy of the same with this application)
	(a) Date of signing the agreement or other arrangement
	(b) Date on which the agreement or other arrangement came into effect
	(c)    Time    Period     for    which    the    agreement or    other arrangement is effective
(iv)	Details of transaction on which tax not deductible has been deducted
	(a) Amount of transaction (in INR)
	(b) Date of transaction
	(c) Date of payment made
	(d) Mode of payment (Please attach a copy of proof of payment)
	(e) Nature of transaction
(v)	Details of tax deducted on transaction specified in point (iv) above
	(a) Amount of tax deducted (in INR)
	(b) Date of tax deduction
	(c) Date on which the tax deducted was deposited in Government Account
	(d) Details of challan
	S No. BSR Code Date of Deposit in Government Account Serial number of challan Amount (Rs.)
(vi)	Please explain why no tax was required to be deducted on the income in the relevant transaction
(vii)	Please state whether tax deducted on similar transaction has been refunded in 3 years prior to the relevant previous year? (If yes, please give the following details)	Yes No
	(a) Relevant Assessment Year
	(b) Date of transaction
	(c) Amount of tax deducted
	(d) Amount of tax refunded
	(e) Date of order of Commissioner (Appeals) or the Assessing Officer, as the case may be (Please attach copy of order with this form)
(viii)	Please specify other relevant details (if any)

I,……………………………, son/ daughter of…………………………….. do hereby declare that to the best of my knowledge and belief what is stated above is correct, complete and truly stated. I declare that no tax was required to be deducted on the income referred to in this form. I further declare that what is stated in this application is correct. I also declare that I am making this application in my capacity as ………………… and I am also competent to make this application and verify it. I am holding Permanent Account Number or Aadhaar Number ………………………. 

Date: 

Signature: 

Place: 

Address: .”. 

[Notification No. 98/2022/F. No. 370142/33/2022-TPL] 

SHEFALI SINGH, Under Secy., Tax Policy and Legislation 

Note : The principal rules were published vide notification S.O. 969(E), dated the 26th March, 1962 and last amended vide notification GSR 632(E), dated the 17th August, 2022. 

Download CBDT Notification No. 98/2022 dated 17.08.2022 on Claim of Refund in Form 29D in PDF format

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