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July 22, 2020

What is the due date of filing TDS Return for Q1 of FY 2020-21 is 31 July 2020 or 31 March 2021?

What is the due date of filing TDS Return for Q1 of FY 2020-21 is 31 July 2020 or 31 March 2021?

What is TDS?

TDS or Tax Deducted at Source is income tax reduced from the money paid at the time of making specified payments such as rent, commission, professional fees, salary, interest etc. by the persons making such payments.

Any person making specified payments mentioned under the Income Tax Act are required to deduct TDS at the time of making such specified payments.

What is the due date for depositing the TDS to the government?

The Tax Deducted at Source must be deposited to the government by 7th of the subsequent month. For instance, TDS deducted in the month of June must be paid to the government by 7th July. However, the TDS deducted in the month of March can be deposited till 30th April.

What is the due date of filing TDS returns?

Filing TDS returns is mandatory for all the persons who have deducted TDS. TDS return is to be submitted quarterly. Different forms are prescribed for filing returns depending upon the purpose of the deduction of TDS. Various types of return forms are as follows:

  1. Form 26Q – TDS on all payments except salaries
  2. Q1 – 31st July
  3. Q2 – 31st October
  4. Q3 – 31st January
  5. Q4 – 31st May
  6. Form 24Q – TDS on Salary
  7. Q1 – 31st July
  8. Q2 – 31st October
  9. Q3 – 31st January
  10. Q4 – 31st May
  11. Form 27Q – TDS on all payments made to non-residents except salaries
  12. Q1 – 31st July
  13. Q2 – 31st October
  14. Q3 – 31st January
  15. Q4 – 31st May

Compliances amidst the COVID 19 Pandemic

The COVID 19 pandemic has been largely disruptive to the growth of India. With an ever increasing corona virus cases, lockdown was considered as an only solution to flatten the curve. However the measures which were implemented to avoid a human disaster, have in turn led to the birth of several issues such as unemployment, recession, hindrance to economic growth, financial instability and so on.

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Due to the emerging financial distress faced by most people on account of the large-scale economic distress caused by COVID 19, the Government of India had extended the due dates of various provisions to provide relief in the current pandemic situation. The Union Finance & Corporate Affairs Minister Smt. Niramla Sitharaman announced several important relief measures taken by the Government of India in view of COVID-19 outbreak, especially on statutory and regulatory compliance matters related to several areas of Income Tax, GST, Customs & Central Excise and Corporate Affairs. Therefore, for the FY 2019-20 & FY 2020-21, a lot of dates were extended.

Provisions of Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020

In the month of March 2020, the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 was put into effect by the President of India. Considering the situation arising out of COVID-19 pandemic, the Ordinance had provided for the extension of various time-limits under the Taxation and Benami Acts.

Section 3(1) of the Ordinance provided that all due dates falling between 20th March, 2020 to 29th June, 2020 shall stand extended to 30th June, 2020.

The provision empowers the Central Government to specify the new cut-off date and to extend the due date.

Ministry of Finance (CBDT) issued Notification 35/2020 on 24.06.2020 extending the time limit for filing ITRs, TDS/TCS returns, making investments etc. for AY 2020-21 & 2019-20

In exercise of the powers conferred by section 3(1) of the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 the Central Government specified that, for the purpose of the said sub-section (1):-

  • the 31st day of December, 2020 shall be the end date of the period during which the time limit specified in, or prescribed or notified under, the specified Act falls for the completion or compliance of such action as specified under the said sub-section; and
  • the 31st day of March, 2021 shall be the end date to which the time limit for completion or compliance of such action shall stand extended

Thus, the due dates of all compliances falling between 20th March, 2020 and 31st December, 2020 shall now be extended to 31st March, 2021.

However, the notification, provides exceptions by specifically providing the due-date for certain compliances, interalia, filing of ITR for the assessment year 2020-21, furnishing of TDS/TCS statement of 4th quarter of the financial year 2019-20, etc. Provided below are the latest deadlines pertaining to filing of returns as per the Notification:-

  1. The time for filing of original as well as revised income-tax returns for the FY 2018-19 (AY 2019-20) has been extended to 31st July, 2020.
  2. Due date for income tax return for the FY 2019-20 (AY 2020-21) has been extended to 30th November, 2020.
  3. Interest at the reduced rate of 9% (i.e. 0.75% per month instead of 1% per month) will be charged on delay in respect of payments made between 20.03.2020 and 30.06.2020.
  4. The reduced rate of interest of 9% for delayed payments of taxes, levies etc. shall not be applicable for the payments made after 30th June, 2020.
  5. The date for furnishing of TDS/ TCS statements pertaining to the FY 2019-20 has been extended to 31st July, 2020.

Effects of the Ordinance and Notification 35/2020 on due date of filing TDS Returns

As per the normal provisions, the due date to furnish the quarterly TDS statement for the first quarter ended on 30th June 2020 for the FY 2020-21 is 31st July 2021.

Ordinance, 2020 extended the due dates of all compliances falling in between 20th March, 2020 and 29th June, 2020 to 30th June, 2020. The question of first quarter of FY 2020-21 was not at all covered by the ordinance.

Due to notification 35/2020 dated 24.06.2020, compliance between 20th March, 2020 and 31st December, 2020 got an extension till 31st March, 2021. However, a specific exclusion was provided in certain cases as a result of which the extended date of 31.03.2021 will not be applicable for those cases. One of which was that TDS quarterly statements in Form No. 24Q, Form No. 26Q , Form No. 27Q and TCS statements in Form 27EQ for FY 2019-20 was fixed at  31st July, 2020.

There was no specific exclusion that was provided in above amendment in respect of TDS quarterly return in respect of first and second quarter of FY 2020-21. As no specific exclusions is provided for TDS return of first and second quarterly TDS return of FY 2020-21,the due date for furnishing the TDS statements will be 31st March, 2021.

Therefore in our opinion the due date for TDS returns as per the Ordinance and Notification will be as follows:-

  • Form 24Q, 26Q, 27Q and 27EQ of Qtr. 4 of the Financial Year 2019-20 – 31st July, 2020
  • Form 24Q, 26Q, 27Q and 27EQ of Qtr. 1 and Qtr. 2 of the Financial Year 2020-21 – 31st March, 2021

An abnormal situation would be arising as a result of above. The due date of quarterly return of third quarter would be 31st January, 2021 whereas the due date of first and second quarter would be 31st March, 2021. It does sound absurd; however any clarification on the same by the Income Tax Department will be welcome.

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