TDS Traces sites levying penalty for late filing of TDS return for first Quarter
The question which is remerging again and again is whether the TDS Return Due Date for 1st Quarter of the FY 2020-21 is extended or not?
The question is remerging for the reason that the person who is filing TDS return for the first quarter on 1st August or 2nd august, the TDS traces site is calculating the late fee in all such cases. Let us revisit the entire issue, reasons & the remedy.
Normally, TDS Provision requires Quarterly filing of TDS return and thereafter issue of TDS certificate to the Deductee. Exception is in respect of TDS in respect of property and rent covered by section 194-IA & 194IB wherein TDS return cum challan is to be done on monthly basis.
The normal due date of filing TDS return and issue of TDS certificate is contained in section 200(3) of the Income Tax Act read with Rule 31A of Income Tax Rules, 1962.
Rule 31A(1)(b)(ii), 31A(2), 31(3) requires filing of quarterly TDS statements u/s 200(3) in Form No. 26Q & issue of TDS certificate in Form No. 16A within the following time lines:
|TDS Quarterly Return for the Quarter ending||Due date of filing TDS statements as per Rule 31A||Due date for issuance of TDS Certificates in Form 16A as per Rule 31(3)|
|30th June||31st July of the financial year||15th August|
|30th September||31st October of the financial year||15th November|
|31st December||31st January of the financial year||15th February|
|31st March||31st May of the following financial year||15th June|
Above are the normal due dates of TDS Compliances. However, for the FY 2019-20 & FY 2020-21, lot many dates are extended in view of prevailing pandemics Corona -19. Initially, the date of all the compliances falling in between 20th March 2020 to 29th June 2020 was extended to 30th June 2020 by The Taxation and other Laws (Relaxation of Certain Provisions) Ordinance, 2020 issued on 31st March 2020. Thereafter, an amendment to the above ordinance was carried out on 24.06.2020 which further relaxed the dates of various compliances. Confusion is arising as to the due date of filing TDS return? More particularly, 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 as 31st July 2020? It may be noted that as per the normal provisions (ignoring above ordinance & amendment thereto), the due date to furnish the quarterly TDS statement for the first quarter ended on 30thJune 2020 for the FY 2020-21 is 31st July 2021. Section 3(1) of the Ordinance, 2020 issued on 31.03.2020 specifically extended the due dates of all compliances falling in between 20.03.2020 & 29.06.2020 to 30.06.2020. In short, the question of the first quarter of FY 2020-21 was not at all covered by the above ordinance. Amendment to above ordinance was carried out by Notification No. 35/2020 Dated 24.06.2020. This notification has amended the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 whereby the date of June 29, 2020 was, subject to some exclusions provided therein, was replaced by December 31, 2020 & extension was granted till 31stMarch 2021.
As a result of above amendment notification 35/2020 dated 24.06.2020, compliance between 20.03.2020 & 31.12.2020 got an extension till 31stMarch 2021.However, an specific exclusion was provided in 7 cases as a result of which the extended date of 31.03.2021 will not be applicable for following cases:
i) ITR for FY 2019-20 for which the due date was kept as 31.07.2020,
ii) ITR for FY 2020-21 for which the due date was kept as 30.11.2020
iii) Due date for monthly payment of taxes for property TDS (26QB) etc for the month of February 2020 and March 2020 was extended to July 15, 2020.
iv) TDS quarterly statements in Form No. 24Q, Form No. 26Q , Form No. 27Q and TCS statements in Form 27EQ for FY 2019-20 were fixed as 31st July 31, 2020.
v) The date of investment for capital gain exemption u/s 54 to 54GB was extended to 30.09.2020. And various other extensions like above were provided.
There was no specific exclusion that was provided in the above amendment in respect of TDS quarterly return in respect of first and second quarter of FY 2020-21. The normal date for first quarter & second quarter is due on 31stJuly and 31st October respectively which is obviously in between 20.03.2020 to 31.12.2020 (which is extended to 31.03.2021 in general).
Does it mean that the due date for the first & second quarter is extended to 31.03.2021? It may be noted that the due date for third quarter is 31.01.2021 which is clearly outside the above period of 20.03.2020 & 31.12.2020 covered by Notification No. 35/2020 and there is no disputes as to the due date of third quarter which is clearly 31.01.2021 only.
It may be noted that the compliance end period of 29.06.2020 was extended 31.12.2020 by the Notification No. 35/2020 dated 24.06.2020 which is subject to the exclusions provided therein. If there are no exclusions therein, it would mean that the date of all compliances in the period from 20.03.2020 to 31.12.2020 would be extended to 31.03.2021. Going through the above provisions and clear cut contents of the Ordinance, 2020 followed by Notification No. 35/2020 Dated 24.06.2020, one can reasonably conclude that the due date of quarterly TDS return for first and second quarter for FY 2020-21 will be 31.03.2021. Surely, an abnormal situation would be arising as a result of the above. The due date of the quarterly return of the third quarter would be 31.01.2021 whereas the due date of first and second quarter would be 31.03.2021. It may sound little illogical but this is how the present situation looks like.
Now the question arises, if the date is extended to 31.03.2021 then why is the late fee levied by the traces for TDS return filed on 1st August, 2nd August or on subsequent dates, as of now. It may be noted that the normal due date for the first quarter was 31st July 2020. The TDS traces sites have not taken the cognizance of above ordinance & amendments thereafter. The programme has not been changed yet. Result: TDS Traces site is levying late fee.
Admittedly, the Government is reasonably giving concession & relief to the assessee in a very proactive manner. However, the delay in updating the utility & software is creating the panic amongst the businessmen. Hopefully, the TDS traces sites utility may be updated soon to remove the late fee in such cases.
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