Tax Deducted at Source Compliances for the month of March-2020 during COVID-19

With the outbreak of COVID-19 and the country wide lockdown since 24th March, 2020, a confusion with respect to tax compliances has emerged. One of the major issue that is being faced is with regard to compliances for payment and filing of return for Tax Deducted at Sources (TDS). This article tries to answer questions that are being raised with compliances of TDS.

1. When to pay TDS for March-20? Is there any extension.

Ans. The due date for payment of TDS for the month of March-2020 is 30th April, 2020. There is no change in the due date of payment of TDS for the month of March, 2020.

2. How to ascertain liability in absence of availability of books?

Ans. In absence of availability of books the TDS liability can be ascertained depending upon the past trend of the business. For instance, under section 194I the TDS can be deducted as per the rent paid for previous months. TDS under section 194A can be deducted @10% on the interest calculated on outstanding loans.

3. What if there is any short/excess payment of TDS?

Ans. Where there is any short payment of TDS, such amount of short payment will attract interest @0.75% per month or part of the month instead of 1.5% per month or part of the month.

Where there is an excess payment of TDS the same will be carried forward and can be utilised for future payment of TDS.

4. Whether excess TDS paid will be refunded or carried forward to next Financial Year?

Ans. Excess payment of TDS can be refunded or carried forward to next FY at the option of the deductor:

For refund: Refunds will be given to those challans which are deposited 1st April, 2010 onwards other than section 195(non-resident). For Section 195 TDS refund is available functionality is available form FY 2007-08.

Carried forward to next FY: The TDS deposited can be carried forward to next FY. Such TDS can be used only for the previous and next financial year only (-1 and +1 FY). For instance, if TDS is paid for the FY 2019-20 and the challan remains unconsumed. Then such unconsumed challan can be used for adjusting payments for the FY 2020-21 or for any previous payments pending for the FY 2018-19).

5. Can payment under one head be adjusted with another head?

Ans. Yes, the payment under one head can be used for adjusting payment under other head. From FY 2012-13 onwards the section code mentioned in the challan is no more relevant. A payment of Rs 10000 under section 194J can be used to adjust TDS paid under section 194C.

6. When do we need to file return for Q4-2020?

Ans. The actual due date for filing TDS return for Q4-2020 is 30th May,2020. However, due to COVID-19 the due date for filing TDS return for Q4-2020 in Form 24Q(TDS- Salary) and 26Q(TDS-other than salary) has been extended to 30th June,2020.

7. What are the consequence of late payment of tax and late filing of returns during COVID-19?

Ans. Late payment of TDS i.e. payment beyond 30th April,2020 (i.e. between 01st May,2020- 30th June,2020) will attract interest as following:

Nature of default Interest subject to TDS amount Reduced Interest subject to TDS amount due to COVID-19
Non-deduction of TDS, either in whole or part 1% per month or part of the month 0.75% per month or part of the month
Non-payment of TDS (after deduction),either in whole or in part 1.5% per month or part of the month 0.75% per month or part of the month

Late filing of TDS return will attract late fees under section 234E @ Rs 200 per day for the period during which the default continues.

8. What is the position of foreign TDS?

Ans. TDS on foreign payments is required to be deducted when there is a foreign remittance made. Such foreign remittance requires filing of FORM 15CA and 15CB, as the case maybe. So deposit of TDS on foreign remittance is made as per the remittance made. For Instance, where a foreign remittance is made in the month of February, 2020 the due date for payment of TDS will be 7th March, 2020. Accordingly TDS return in FORM 27Q will be filed.

9. What about employees TDS and form 16?

Ans. TDS on payments made to employee i.e. TDS on salary under section 192 is to be deducted and deposited by 30th April, 2020. Delay in deposit of TDS will attract interest @0.75% per month or part of the month.

FORM 16 is available after 15 days from the date of filing of return. During the COVID-19 FORM 16 shall be available by 15th July, 2020 if return is filed on 30th June, 2020.

10. Whether there are any changes in TCS payments and returns?

Ans. The Government has not stated any separate process for TCS. Therefore, they are similar to TDS provisions during COVID-19. TCS payments for the month of Mar-2020 needs to be made within 30th April, 2020. Late payment will attract reduced interest @ 0.75% per month or part of the month .Further, due date for filing of TCS returns in Form 27EQ for Q4-2020 has been extended to 30th June, 2020 from 15th May, 2020.

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42 Comments

  1. SAMEER says:

    My relative had to pay TDS on sale of property. Payment to builder made on 31st march 2020. TDS is not been paid.
    So my query is whether interest will be applyed if we pay n file 26QB on 31st July 2020.

  2. Arvind says:

    The gov.has not clarified any thing when lock down is there no staff is available how one can calculate all things and gov is not answering any thing lockdown was imposed by gov. Not us so tds interest should be calculated from may

  3. Jainam Doshi says:

    If i want to pay Tds of April 2020 in this July 2020 than what will the Interest rate charged on me??
    will it be 1.5% or 0.75% p.m ????

  4. Swathi says:

    Sir,
    We are not deducted the tds on salary for the month of March,2020 and the same was deducted in June 2020.
    What is the interest rate and for how many months I need to pay?

  5. Mayuri says:

    I have a short deduction case of July 2019. I have paid excess TDS of provisional TDS of March 2020. If I want to adjust the TDS liability of July 19 gainst challan paid in March 20, what will be the rate of interest? Will it be 1.5% p.m. or 0.75% p.m.? Please reply asap. Need to pay the interest urgently.

  6. Amit Bhasin says:

    Please advise date of deduction to be mentioned in Salary TDS return 24Q, if:
    -Salary expense and TDS liability booked in books on 31st March 2020
    but salary paid on 3rd April 2020

  7. SANDEEP says:

    I have paid the TDS amount for march-20 in may-20 along with the interest @ 0.75% for 24Q & 26Q. but when statement is processed, i have a default summary for interest on late payment where they have calculated @ 1.5%.

    What can be done now?

    1. Saravanan says:

      Whether they have charged 1.5% interest for March, April & May 2020 (in your case paid in May 2020)
      example – TDS -100 , Interest -(1.5 +1.5+1.5 ) for 3 months or interest ( 1.5 for March+ 0.75 for Apr + 0.75 for May)
      Please let me know brother

  8. Subharati Banerjee says:

    I deduct tds on salary on 30.4.20 but I deposited the same in 6.6.20.how much interest for late payment I will be paid on 6.6.20

  9. Richa Goel says:

    I have paid the TDS amount for march-20 in may-20 along with the interest @ 0.75% for 24Q & 26Q. but when statement is processed, i have a default summary for interest on late payment where they have calculated @ 1.5%.

    What can be done now?

    1. Chandrashekar . says:

      You have made remittance in the month of May’20. That means you have delayed remittance by 2 months i.e. April’20 and May’20. Interest will be calculated from the date of deduction to date of actual remittance. Ideally you have to pay balance 0.75% and close the demand.

  10. Gaurav says:

    Dear Sir,
    Please tell us if the TDS Deduction on 31-03-2020 and we deposited at 18-05-20 then the interest charged for 2 or 3 months please explain me

    1. Ramesh Magarde says:

      Please let me know if the TDS deducted on 31/03/2020 and the same is deposited on 08/05/2020. What is the period for charging the interest 2or 3 months, please explain.

      1. Chandrashekar . says:

        It will calculate interest for 2 months. Let me explain in details say for example if you have deducted TDS on 31/03/2020 and made remittance on 15/05/2020, interest will be calculated for Apr’20 and May’20. For the reason that it will not calculate interest if you have deducted on last day of the month specifically in my opinion only for those months ending with 31st.

        Let us take one more example, In case if you have deducted TDS on 30/03/2020 and remitted tax on 15/05/2020, interest will be calculated for 3 month i.e. Mar’20 (part of the month), Apr’20 and May’20.

      2. Rony Gonsalves says:

        Since deducted on 31-03-20 then applicable interest for 2 months i.e. Apr-20 & May-20
        And if deducted before 31-03-20 then applicable interest for 3 months Mar-20, Apr-20 & May-20
        This how CPC is calculated the interest

  11. DHANANJAY says:

    if TDS will not deposit for the month of march 20 up to 30th june, what is interest rate will be deposited after 30th june onward e.i 4 month interest 0.75%
    onward 1.5% part of the month

  12. Sarala Dattani says:

    My relative had to pay TDS on sale of property. Payment to builder made on 17th march 2020. TDS paid on 5th May 2020.
    So my query is whether date extension is applicable for Form 26QB also? Is late fees of Rs. 200 per will need to be paid?
    Interest already paid.

    1. Rony Gonsalves says:

      Form 26QB is return cum challan, since you have made the payment, means filed the Form 26QB also. So there is no question of penalty.

  13. NSN Murthy says:

    Dear Sir,
    The present articles on all aspects are being represented nicely.Even layman can able to understand the concept of article and understand it and can well be implemented.
    Thanking you sir
    Warm Regards & Best Wishes

  14. GNR says:

    Since the due date for filing TDS returns is extended to 30/06/2020 – will Sec 234E applicable from 15/05/2020- I did not understand your response to this question . Appreciate if you can clarify

  15. Ramasamy says:

    Unlike Form 16A, the due date for Form 16 is not 15 days from the due date of filing TDS return.. The due date of Form 16 specifically mentioned in the rule 31 as 15th June. Since, all the due date which are fall between 20th March to 29th June got extended to 30th June. Both due date for filing Form 24Q4 and Due date for issuance of Form 16 simultanosly fall on 30th June. So, far there is no further extention for issuance of form 16. Hence, it is advisable for employer to file it return atleast by 15th June so thay can get form 16 from TRACES portal by 30th June

    1. mamta@djas.in says:

      The refund for TDS can be claimed by Login into the respective Traces account. Under the tab ‘Statement/Payment’ in main menu, from the given drop down select ‘Request for Refund’. Acknowledgement in Form 26B will be generated for refund request placed.

  16. GANDHI MOHAN BHARATI says:

    What about Tax Payers; with TDS Returns due date as 30 June 2020, it is unlikely that credit will get reflected in 26AS before 15 July, 2020 and are they to file ITR by 31 July, 2020?

    1. mamta@djas.in says:

      This is policy decision and has to be taken care at ministry level. However, seeing the trend of past few years, the extension is inevitable.

  17. salil gupta says:

    If we deposit TDS on 30 MAY 2020 having Due date 30 April 2020 and deducted in Mar 20 Month. with new Ordinance, how many months interest payment is applicable.

    1. Deepak Jain says:

      Ideally interest should be charged for one month. However, the TDS system is developed in such a way that it will calculate it as two months. If we pay interest for one month, then there is high chances of demand notice for interest for one more month.

    2. Anupam says:

      If TDS deducted is in Mar-20 and paid on May-20, interest is to be paid for 3 months, from the date TDS is deducted to the date TDS is actually paid or part of the month thereof.

      However, interest for the month of Mar-20 and & April-20 will continue to be @1.5% and for the month of May-20 shall be @0.75%.

      This is based on the explanation given in the tax ordinance, which is subject to clarification.

      1. VKVerma says:

        The interest for 3 months will be @ .75% per month i.e 2.25% in aggregate since the press release dated 24/03/2020 states that ” delayed payments made between 20th March 2020 and 30.06.2020 reduced interest rate( .75% pm) will be charged for this period.

      2. Deepali says:

        Any clarification on whether interest @ 1.5% per month will be charged or not from date of deduction to due date for TDS payable for March 2020

  18. saurabh@saurabhjoshi.co.in says:

    Excellent FAQ. This has sufficiently addressed queries which the taxpayers/consultants have in their minds right now.

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