Is there any Extension to TDS Return Due Date For Quarter 1 FY 2020-21: There is a lot of confusion among the deductors regarding the filing of TDS returns for the first quarter of the financial year (FY) 2020-21 that ended on June 30, 2020. This article analyzes whether there is any extension in due date in furnishing the TDS statement for the 1st quarter of the financial year 2020-21 or it is the same 31st July 2020 as per Rule 31A.
At this juncture, it is important to know that the requirement to file TDS return has been dispensed with by the Income Tax Act from April 2005. From 1st April 2005, a deductor is required to furnish a quarterly statement of TDS with the income tax department and not any TDS return.
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According to section 200(3), every deductor is required to furnish a statement of tax deduction and deposit of TDS in the prescribed form and within the prescribed time limit after paying the tax deducted to the credit of the Central Government within the prescribed time as detailed above.
As per Rule 31A of Income Tax Rules, 1962, the TDS statement is required to be filed electronically with the Income Tax department.
Rule 31A(1)(b)(ii) and 31A(2) prescribes filing of quarterly TDS statements u/s 200(3) in Form No. 26Q within the following time limits-
Therefore, the time limit to furnish the quarterly TDS statement for the first quarter of the FY 020-21 that ended on June 30, 2020, is 31st July 2021.
Readers are aware that On March 31. 2020 the government has promulgated Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 (hereinafter referred to as “Ordinacne 2020”) to provide relaxation in relation to tax matters under direct tax laws due to outbreak of COVID-19 pandemic and subsequent nation-wide lockdown imposed.
Section 3(1) of the Ordinance, 2020 explicitly extends the time limit for specific compliance requirements under the Income Tax Act, 1961.
Section 3(1) of the Ordinance, 2020 is relevant to the time extension and other compliance requirements. It states that where any time limit is-
specified in the specified Act (for eg., Income Tax Act, 1961), or
prescribed in the Rules made thereunder (for eg. Income Tax Rules), or
notified in any Notifications (for eg. the last date to link PAN-Aadhaar is notified by a Notification)
and such time-limit falls in the period between 20-03-2020 and 29-06-2020 (or a new notified date)-
then the followings are provided under section 3 of the Ordinance,2020 and completion or compliance of action must be related to the followings-
completion of any proceeding,
the passing of any order,
issuance of any notice, intimation, notification,
sanction or approval or such other action, by any authority, commission or tribunal,
filing of any appeal,
furnishing of any report, document, return, statement or such other records,
under the provisions of the specified Acts which includes Income Tax Act, 1961 (“Act”), shall be completed by June 30, 2020.
Section 3(1) of the Ordinance of 2020 expressly provides for furnishing of any statement under the Income Tax Act, 1961 and under section 200(3) of the Act every deductor is required to furnish a statement of TDS within the due date prescribed in Rule 31A of the Income Tax Rules, 1962.
It should be noted that there is no mention of any financial year to which such compliance is related. In other words, section 3(1) of the Ordinance simply provides for the extension of all the due dates which falls within the specified compliance period from 20.03.2020 to 29.06.2020 to June 30, 2020.
It is irrelevant whether the compliance is related to FY 2019-20 or FY 2020-21 or any other financial year.
Section 3(1) of the Ordinance of 2020 empowers the Central Government to extend the end date of June 29, 2020, and the last compliance date of June 30, 2020.
In this context and by exercising the powers under section 3(1) of the Ordinance, 2020, CBDT has issued Notification 35/2020 dated 24.06.2020 and further extended the time limits under the Income-tax Act, 1961 and related Acts which were earlier extended by the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020.
The said notification has replaced the date of June 29, 2020, as mentioned in the Ordinance, 2020 by December 31, 2020, and the date of June 30, 2020, by 31st March 2021.
Therefore, after the issue of the Notification, the specified compliance period from 20.03.2020 to 29.06.2020 31.12.2020 gets extended to March 31, 2021.
However, unlike the Ordinance, 2020, the extended time limit of March 31, 2021 is not kept common for all the compliances, etc. Certain exceptions have been provided for the completion of certain compliance which shall be completed before the stipulated date of 31st March 2021.
These exceptions as provided in the first proviso to said Notification related to furnishing of statement of TDS are given below-
1. Due date to furnish statement of TDS by government deductors: Earlier, when the Ordinance was promulgated it was stated in this article that the extended TDS payment date and the date of furnishing TDS statements were ending on the same date which was June 30, 2020.
Now, the notification of 24th June has extended the due date to deliver the statement of TDS u/s 200(2A) and the due date to deliver the statement of TCS u/s 206(3A) [where the deductor is a government department], for the quarter ending March 31, 2020 to July 15, 2020.
Further, where the monthly payment of taxes is allowed, the due date for furnishing statements of TDS/TCS for the month of February 2020 and March 2020 is extended to July 15, 2020.
In this case, the end date of March 31, 2021 will not apply.
2. Due date to furnish statement of TDS by other than government deductors: The notification of 24th June has extended the due date to deliver the statement of TDS u/s 200(3) and the due date to deliver the statement of TCS u/s 206(3) [other than government deductors], for the quarter ending March 31, 2020 to July 31, 2020.
Therefore, TDS statements in Form No. 24Q, Form No. 26Q and Form No. 27Q and TCS statements in Form 27EQ are allowed to be filed by July 31, 2020.
Further, where the monthly payment of taxes is allowed, the due date for furnishing statements of TDS/TCS for the month of February 2020 and March 2020 is extended to July 31, 2020.
In this case, the end date of March 31, 2021 will not apply.
Both these exceptions have been provided for furnishing the TDS statements related to the 4th quarter of the FY 2019-20 which ended on March 31, 2020. The normal due date was 31st May 2020 which is now extended to 31st July, 2020 (15th July 2020 for government deductors).
We can see from Rule 31A related to the time limit to furnish TDS statements for the 1st and 2nd quarter of FY 2020-21 is 31st July 2020 and 31st October 2020 which falls in the specified compliance period from 20.03.2020 to 31.12.2020 and hence exclusively covered by the Ordinance, 2020.
The due date for 3rd quarter is 31st Jan 2021 and hence outside the purview of the extension so provided by the Ordinance 2020 read with Notification 35/2020 dated 24.06.2020.
When the Ordinance, 2020 was promulgated, the specified compliance end period was June 29, 2020 and thus the due date for furnishing the TDS statements for FY 2020-21 was not of any significance since the first due date for quarter 1 of FY 2020-21 is July 31, 2020 which is beyond the end period of June 29, 2020.
This specified compliance end period of June 29, 2020 is extended to December 31, 2020 by the Notification No. 35/2020 dated 24.06.2020. Since the extension of the period covers the due date for furnishing the TDS statements for the first quarter of FY 2020-21, the same has assumed greater significance.
It is further noted that the 7 exceptions provided in the first proviso of the said notification, where the end compliance date of March 31, 2021 shall not apply, does not mention anything about the due date for furnishing the TDS statements for the first quarter of the financial year 2020-21. In the absence of any specific exclusion, the general date of March 31, 2021 shall only apply in the case of furnishing the TDS statements for the first quarter of the financial year 2020-21.
Therefore, based on the above discussion and on the plain reading of the Ordinance, 2020 read with Notification No. 35/2020 dated 24.06.2020, the due date for furnishing the TDS statement for the first quarter of the FY 2020-21 gets extended to March 31, 2021 from the normal due date of July 31, 2020.
Due date for payment of TDS
No extension of due date for payment of TDS: Readers must be aware that the notification is issued under section 3(1) of the Ordinance, 2020 which deals with compliances related provisions of the Income Tax Act, 1961 (and certain other specified Acts).
Section 3(2) of the Ordinance, 2020 deals with the payment of taxes including TDS under the Income Tax Act, 1961. In this context, it should be noted that the government has never extended the due date of payment of TDS even under the Ordinance, 2020. However, certain relaxation is provided in the chargeability of interest if the same is paid by June 30, 2020, the period which is over now. Read more on relief in interest and due date extension for payment of TDS in this article.
Though section 3(2) also empowers the Central Government to issue Notification, no Notification is issued by the CBDT under this section.
Due Date for the Issue of TDS Certificates in Form 16A for the first quarter of FY 2020-21
Rule 31(3) of Income Tax Rules, 1962 provides for the issuance of TDS certificates for payment to deductees in Form 16A and the same is required to be issued quarterly within 15 (fifteen) days from the due date for furnishing the statement of tax deducted at source under Rule 31A.
The due dates for issue of TDS certificates in Form 16A, as per Rule 31(3), are thus as given below-
The TDS certificates shall be issued after generating and downloading the same from the TRACES portal and can be issued with manual seal and signature or with digital signature. [Refer Circular No. 03/2011 dated 13.05.2011]
However, since the Notification 35/2020 dated 24.06.2020 has extended the due date of furnishing the statement of TDS for the first quarter of FY 2020-21 from 31st July, 2020 to March 31, 2021, the TDS certificates for the said quarter shall be 15th April, 2021.
Further Readings:
Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020
Notification No. 35/2020 dated 24.06.2020
Analysis of new extended due dates as per CBDT Notification under direct taxes
No Extension of Due Date of TDS payment for March 2020 onwards amid COVID-19
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