Introduction:
Two of the government's most important tax channels are TDS and TCS. And in order to prevent penalties and maintain compliance, it is essential for businesses to submit such timely tax payments. The Central Board of Direct Taxes (CBDT) has issued a significant statement about the extension of the deadlines for the filing of TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) claims for the first quarter of the financial year 2023–24 in Circular No. 9/2023–Income Tax of 28th June 2023. The extension especially includes the first quarter of FY 2023–24 or the months of April through June 2023, and the statements of a tax deduction (Form 26Q or 27Q) and collected (Form 27EQ)
CBDT: Increased Date also relaxes compliance:
By extending important dates, the CBDT has made it easier for taxpayers to comply with the law by using its authority under section 119 of the Income-tax Act of 1961. The deadline for submitting the tax deduction statement for the first quarter of the fiscal year 2023–24, which was initially attributed on July 31 of that year, has been extended to September 30 of the same year. According to Rule 31A of the Income-tax Rules, 1962, this is true for both Form No. 26Q and Form No. 27Q. Extension Also applicable to TCS Statements The CBDT has also loosened its restrictions on TCS assertions. Additionally, the initial July 15, 2023 period for filing the statement of collecting taxes for the first quarter of the fiscal year 2023–24 has been moved to September 30, 2023. Form No. 27EQ is covered by the additional time by Rule 31AA of the Income-tax Rules of 1962.
A general overview of TDS and TCS:
Tax Deducted at Source(TDS)
The meaning of TDS is Tax Deducted at Source. It is the amount of tax that the government deducts right away once it arrives from the recipient's income. A specific percentage of the TDS is subtracted. According to the IT Act, if the cost of any products or services is above a particular threshold, an individual or any corporation is allowed to deduct this tax from the source of income.
According to Section 194Q, the income tax division requires any business or person to withhold tax at the source from payments made for the acquisition of goods and services, such as rent, technical services, legal fees, royalties, consultation fees and etc, that are more than Rs. 50 lakhs.
Tax Collection at Source (TCS)
Through Tax Collection at Source, the seller of specific items is permitted to withhold tax from the buyer along with the selling price and send it to government agencies on their behalf. TCS stipulates that the seller of products be in charge of the buyer's tax payment. After deducting the tax, the vendor puts the funds into the credit of the national government.
Depending on whatever occurs first, collection incidents happen when receiving sales revenues or debit accounts. The things covered by TCS are listed under Section 206C of the Income Tax Act of 1961. These include tollgates and parking lots, as well as wood, alcohol, lignite, and coal. Only sales of items up to a total of Rs. 50 lakhs are permitted by TCS.
A. Declaration of Deduction of Tax (Form 26Q or 27Q) Extensions:
The additional deadline for the documentation of tax deduction for the first quarterly of the financial year 2023–24, which must be provided in Form 26Q or 27Q, is now September 30, 2023. formerly, Rule 31A of the Income-tax Rules, 1962 required taxpayers to make this information by July 31, 2023. Taxpayers now have more time to make certain their submissions are proper and made on time because of the extended deadline.
B. An extension for Form 27EQ, Statement of Collection of Tax
The due date for the Form 27EQ-required statement of revenue from taxes for the first quarter of the financial year 2023–24 has also been extended until September 30, 2023. According to Rule 31AA of the Income-tax Rules, 1962, the first submission deadline for this statement was July 15, 2023. The CBDT hopes to lessen the burden on taxpayers and promote easier compliance measures by expanding the deadline.
Conclusion:
The CBDT's extensions of the deadlines for submitting specific TDS/TCS statements give taxpayers vital relief and freedom. The CBDT intends to simplify regulatory processes and lessen the financial strain on taxpayers by delaying the deadline for completing Forms 26Q, 27Q, and 27EQ for the first quarter of FY 2023–24 to September 30, 2023. Many benefits come with this extension, such as lessened compliance pressure, avoidance of penalties, more accuracy, and increased efficiency in tax reporting. The additional period should be used wisely by taxpayers for accurate and timely filing of TDS/TCS statements.
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