14 June 2021
CBDT amends quarterly TDS/TCS statements and expands the ambit of reporting base
The government has undertaken various steps towards ease of compliance and is trying to expand the taxpayer’s base. Recently, as a step towards the said initiative, the Central Board of Direct Taxes (CBDT) vide notification No. 71 of 2021 has brought about changes in quarterly TDS/TCS return filing. These said changes have been made considering the amendment's impact made in various provisions of Chapter XVIIB of the Income Tax Act.
A gist of new reporting required to be made by deductor/ collector is as under:

Form 26Q

Deductor should ensure reporting of following payments in their:
  • Payment of dividend to persons who are exempt by virtue of the notification issued by the government or to business trust;
  • Payment of income from zero-coupon bonds issued on or after 1 June 2005 by an infrastructure capital company, or infrastructure capital fund or infrastructure debt fund or public sector company;
  • Payment of interest on securities to persons who are authorized to receive payments without deduction of tax or deduction at a lower rate by virtue of the notification issued by the government;
  • Payment for purchase of goods on which TDS has been withheld under other provisions of the Act;
  • Specifically mentioned in the returns in respect of cases where the deduction has been made at higher rates in view of provisions of section 206AB.
Form 27EQ

A new reporting requirement on account of tax collection at higher rates in view of provisions of Section 206CCA.
Form 27Q

With respect to payment to non-residents, the deductor is required to report the following details:
  • Amount of income paid to specific fund if such income is exempt u/s 10(4D)
  • Income in the nature of capital gains paid to foreign institutional investor on account of transfer of securities
Our Comments
The above changes in the reporting requirement will ensure that the government has a pool of data that will enable it to provide pre-filled forms to all the assessee, thereby reducing their time. Secondly, it will also enable the government to track down taxpayers who have not filed their returns. However, at the same time, it will lead to an increase in the compliance burden on the business fraternity as a whole.
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