Introduction: Circular No. 04/2024, issued by the Central Board of Direct Taxes (CBTD) on March 7, 2024, brings important relief for specified persons under section 194S of the Income-tax Act. The circular addresses concerns related to the filing of Form No. 26QE for the period from July 1, 2022, to February 28, 2023, pertaining to the financial year 2022-23.
Detailed Analysis:
1. Legal Requirement Overview: According to section 194S of the Income-tax Act, any person responsible for transferring a virtual digital asset must deduct 1% of the sum as income tax. Form No. 26QE is the electronic challan-cum-statement for reporting such deductions, to be filed within thirty days from the end of the relevant month.
2. Unavailability Issues: The CBTD notes that specified persons who deducted tax during the period from July 1, 2022, to January 31, 2023, faced challenges in filing Form No. 26QE due to its unavailability. This resulted in the imposition of fees under section 234E and interest under section 201(1A)(ii) of the Act.
3. Insufficient Time Concerns: Additionally, those who deducted tax from February 1, 2023, to February 28, 2023, had insufficient time to complete Form No. 26QE filing, leading to similar penalties.
4. Ex-Post Facto Extension: In an effort to address these concerns and alleviate the grievances of specified persons, the CBTD, under the powers conferred by section 119(2)(a) of the Act, ex-post facto extends the due date for filing Form No. 26QE. The extended deadline is May 30, 2023, for cases where tax was deducted from July 1, 2022, to February 28, 2023. Notably, the waiver of fees and interest for the period up to May 30, 2023, is granted.
5. One-Time Exception: The circular emphasizes that this extension is a one-time exception, specifically granted due to the circumstances outlined above.
Conclusion: Circular No. 04/2024 reflects the CBTD’s proactive approach in mitigating challenges faced by specified persons in complying with Form No. 26QE requirements. The ex-post facto extension till May 30, 2023, and the accompanying waiver of fees and interest showcase a responsive and considerate stance by the tax authorities. This one-time exception serves as a pragmatic solution, ensuring that genuine difficulties faced by taxpayers are duly addressed, aligning with the spirit of a fair and equitable tax administration. Stakeholders are encouraged to take note of this circular and adhere to the extended deadline for Form No. 26QE filing to avoid penalties.
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F. No. 275/01/2023-IT(B)
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
New Delhi
Circular No. 04/2024 Dated: 07th March, 2024
Sub: Ex-post facto extension of due date for filing Form No. 26QE which was required to be filed during the period 01.07.2022 to 28.02.2023 (pertaining to F.Y. 2022-23) — reg.
As per section 194S of the Income-tax Act, 1961 (hereinafter referred to as “the Act”), any person responsible for paying to any resident person any sum by way of consideration for the transfer of a virtual digital asset is required to deduct an amount equal to 1% of such sum as income tax thereon. Further, as per sub-rule (4D) of rule 31A, a ‘specified person’ is required to report such deductions in a challan-cum-statement electronically in Form No. 26QE within thirty days from the end of the month in which such deduction is made.
2. It has come to the notice of the Central Board of Direct Taxes (the Board’) that specified persons who deducted tax under section 194S of the Act during the period from 01.07.2022 to 31.01.2023, could not file Form No. 26QE and pay corresponding TDS on or before the due date, due to unavailability of Form No. 26QE. This has resulted in consequential levy of fee under section 234E and interest under clause (ii) of sub-section (1A) of section 201 of the Act. Further, the specified persons who deducted tax under section 194S during the period from 01.02.2023 to 28.02.2023 had insufficient time to file Form No. 26QE and pay corresponding TDS thereon.
3. In order to address the grievances of such specified persons and in exercise of the powers conferred under section 119(2)(a) of the Act, the Board has decided to, ex-post facto, extend the due date of filing of Form No. 26QE for specified persons who deducted tax under section 194S but failed to file Form No. 26QE. The due date is hereby extended to 30.05.2023 in those cases where the tax was deducted by specified persons under section 1945 of the Act during the period from 01.07.2022 to 28.02.2023. Fee levied under section 234E and/or interest charged under section 201(1A)(ii) of the Act in such cases for the period upto 30.05.2023, shall be waived.
4. It is clarified that the above extension is a one-time exception in view of the circumstances referred to above.
5. Hindi version shall follow.
(Sunil Kumar)
Under Secretary to Government of India
Copy to .-
1. PS to FM/OSD to FM/PS to MoS (R)/OSD to MoS(R)
2. PPS to Secretary (Revenue)
3. The Chairman, CBDT & all Members. CBDT
4. All Pr CCsIT. CCsIT/Pr. DGsIT/DGsIT
5. All Joint Secretaries/CsIT, CBDT.
6. Commissioner of Income-tax (Media & TP) and official Spokesperson, CBDT, New Delhi.
7. ADG (PR,P&P) for necessary action.
8. JCIT, Database Cell. with a request to upload the order on the website www.irsofficersonline.qov.in
9. Web Manager, 0/o DGIT(Systems) with request to upload on the departmental website of gov.in.
10. The Institute of Chartered Accountants of India, IP Estate, New Delhi
11. All Chambers of Commerce.
12. The Guard File.
(Sunil Kuma–)
Under Secretary to the Government of India
