Budget 2019 – Relaxation of Section 201 in respect of payments to non-residents

If the deductor fails to deduct whole or any part of the tax or he fails to deposit the tax to credit of Central Govt. he will be considered to be assessee-in-default. The deductor will not be treated as assesse-in-default if payment is made to a resident who paid tax on such income and has mentioned it in return submitted u/s 139. The payer will get a certificate from a Chartered Accountant in Form 26A and submit it. At present it was only for payment made to resident person. In case of failure on payments made to non-resident such relaxation was not for the deductor.

The amendment is made thus where deductor fails to deduct tax from sum paid to resident or non-resident but he is not considered as assessee-in-default, he will be responsible to pay interest from date on which tax was needed to be deducted to the date of filing of return of income by payee.

This amendment will take effect from 1st September, 2019

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