Income Tax Introduces Form 71 to Facilitate TDS Credit for Previously Reported Income in ITR

Income Tax Introduces Form 71 to Help You Claim TDS Credit for Previously Reported Income in ITR

The Central Board of Direct Taxes (CBDT) has introduced Form 71, which allows individuals to apply for the credit of Tax Deducted at Source (TDS) as per Section 155(2) of the Income Tax Act. Here's how it works:

If you have reported income in your tax return under Section 139 for a specific assessment year, and TDS has been deducted from that income in a subsequent financial year, you can now apply to amend your assessment order. You should do this within two years from the end of the financial year in which the TDS was deducted. This form helps you claim credit for the TDS deducted in the relevant assessment year.

However, remember that you can only claim this credit once, and it cannot be used in any other assessment year.

When Should You Use Form 71?

Let's take an example: Mr. X earned interest from a Fixed Deposit in the financial year 2022-23 (Assessment Year 2023-24). The bank deducted TDS on this interest in the financial year 2023-24 (Assessment Year 2024-25). 

Now, the income is taxable in Assessment Year 2023-24, but the TDS credit is visible in Assessment Year 2024-25.

To fix this situation, Mr. A can submit Form No. 71.

Time Limit for Submitting Form 71: You must submit this form within two years from the end of the financial year in which the tax was deducted at source.

In the example above, Mr. A needs to submit the form by March 31, 2026.

Also Read: Income Tax: Over 88% of Processed ITRs Verified, 14,000 Returns Awaiting Verification