There are some reports or articles published that the filing of TDS returns for the third quarter of the financial year (FY) 2020-21 that ended on December 31, 2021 has been extended till 31.03.2021 after the issue of Notification No. 93/2020 dated 31.12.2020. This article analyzes whether there is any extension in due date in furnishing the TDS statement for the 3rd quarter of the financial year 2020-21 or it is the same 31st January 2021 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.
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 third quarter of the FY 2020-21 that ended on December 31, 2020, is 31st January 2021.
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All about Due Date for TDS/TCS Payment and TDS/TCS Returns and issue of TDS/TCS Certificates
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 “Ordinance”) 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. The Ordinance has since been replaced by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (hereinafter referred to as “Taxation Amendment Act”). All the provisions of the Ordinance were incorporated in the Taxation Amendment Act. Further, the provisions of the Notification No. 35/2020 dated 24.06.2020 were also codified in the Taxation Amendment Act.
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This Notification No. 35 of 2020 was issued under the powers conferred to CBDT by section 3(1) of the Ordinance of 2020.
When the Ordinance was issued it covered the period of various compliances under the specified Acts including the Income Tax Act, 1961 beginning from 20th March 2020 to 29th June 2020. All such compliances shall be done by 30th June 2020.
Note:
The followings are the 8 (eight) Specified Acts under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020
(i) the Wealth-tax Act, 1957; 27 of 1957.
(ii) the Income-tax Act, 1961; 43 of 1961.
(iii) the Prohibition of Benami Property Transactions Act, 1988; 45 of 1988.
(iv) Chapter VII of the Finance (No. 2) Act, 2004; 22 of 2004.
(v) Chapter VII of the Finance Act, 2013; 17 of 2013.
(vi) the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015; 22 of 2015.
(vii) Chapter VIII of the Finance Act, 2016; or 28 of 2016.
(viii) the Direct Tax Vivad se Vishwas Act, 2020; 3 of 2020.
Thereafter a Notification No. 35 was issued on 24.06.2020 which extended the end date of compliance of 29th June 2020 to 31st December 2020. The completion date of all such compliances for the period was extended to 31.03.2021. This Notification was issued u/s 3(1) of the Ordinance of 2020.
This extension under the Notification has inter alia extended the due date of furnishing of TDS statements for the quarter 1 and quarter 2 of the FY 2020-21 to March 31, 2021 from their prescribed due dates of 31.07.2020 and 31.10.2020 respectively.
The provisions of the Notification were incorporated in the Taxation Amendment Act and thus the Taxation Amendment Act when notified provides for completion of all the compliances falling in the period beginning from 20th March 2020 to 31st December 2020 by March 31, 2021.
Section 3(1) of the Taxation Amendment Act has three clauses -
Clause (a) of Section 3(1) of the Taxation Amendment Act refers to compliances that are meant for tax authorities, commission and tribunals and not for the assessees.
Clause (b) of Section 3(1) of the Taxation Amendment Act are primarily meant for the taxpayers. All the compliance related to furnishing of TDS statements by the taxpayers/deductors falls in this clause.
Clause (c) of Section 3(1) of the Taxation Amendment Act are related to investments, payments etc for claiming deduction/exemption under the Income Tax Act.
One should note that Section 3(1) of the Taxation Amendment Act empowers the Central Government to specify different dates for completion or compliance of different actions.
Section 3(1) of the Taxation Amendment Act 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 31-12-2020 (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 March 31, 2021.
There are certain exceptions provided in section 3(1) where a date earlier than 31st March 2021 is specified.
Section 3(1)(b) of the Taxation Amendment Act 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 Taxation Amendment Act simply provides for the extension of all the due dates which falls within the specified compliance period from 20.03.2020 to 31.12.2020 to March 31, 2020.
It is irrelevant whether the compliance is related to FY 2019-20 or FY 2020-21 or any other financial year.
As stated earlier, Section 3(1) of the Taxation Amendment Act empowers the Central Government to extend the end date of December 31, 2020, and the last compliance date of March 31, 2021. Similar provisions were also existing in the Ordinance of 2020.
In this context and by exercising the powers under section 3(1) of the Ordinance, 2020, CBDT had 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. Similarly, by Notification No. 88/2020 dated 29.10.2020 issued under section 3(1) of the Taxation Amendment Act, the government has extended the due date of furnishing tax audit reports and income tax returns for the AY 2020-21.
Now the government has once again extended the due date of furnishing tax audit reports and income tax returns for the AY 2020-21 and a Notification No. 93/2020 dated 31.12.2020 is issued to that effect.
Para (A) of the notification has replaced the end date of the compliance period of December 31, 2020, as mentioned in the Taxation Amendment Act by March 30, 2020, and also specified the end date to the time limit for such completion or compliance as 31st March 2021.
It states that the Central Government hereby specifies, for the completion or compliance of action referred to in-
(A) clause (a) of sub-section (1) of section 3 of the Act, -
(i) the 30th day of March, 2021 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
(ii) 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:
Therefore, after the issue of the Notification, the specified compliance period from 20.03.2020 to 31.12.2020 30.03.2021 gets extended to March 31, 2021.
However, this time the amendment in the extension of compliance dates is carried out only in the clause (a) of Section 3(1) and is not applicable to the entire sub-section (1), unlike the Notification No. 35/2020 dated 24.06.2020 which made the extension of dates to the entire provisions.
As stated earlier, Clause (a) of Section 3(1) of the Taxation Amendment Act refers to compliances that are meant for tax authorities, commission and tribunals and not for the assessees whereas the compliances related to furnishing of TDS statements by the taxpayers/deductors is covered in clause (b) of Section 3(1).
Hence, the extension of dates by Para (A) of the Notification No. 93/2020 does not apply to the compliances enumerated in clause (b) of Section 3(1). Therefore, it can be concluded that the extension of due date for furnishing TDS Statement for the third quarter of FY 2020-21 which falls on 31st January 2021 is not extended to 31.03.2021 and it will remain at 31.01.2021 whereas the due date to furnish the TDS Statement for the 1st and 2nd quarter of FY 2020-21 is 31st March, 2021.
Para (B) of the notification no. 93 amends and extends the dates for certain compliances listed in Clause (b) of Section 3(1) of the Taxation Amendment Act but these are restricted to the extension of dates for furnishing tax audit reports and income tax returns. Furnishing reports and returns are also covered in Clause (b) of Section 3(1) of the Taxation Amendment Act.
The extension is given for the compliances etc. for clause (a) and not for clause (b) and, hence, in this case, the end date of March 31, 2021 will not apply. Rather, the normal due date of January 31, 2021 as per Rule 31A for furnishing the TDS Statement for the 3rd quarter ended on December 31, 2020 shall apply.
Further Readings:
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