Amount on which TCS not collected from buyer to be reported: CBDT notifies Income-tax (17th Amendment) Rules, 2020 [Read Notification]

CBDT - Income tax Rules - Amendment - Taxscan

The Central Board of Direct Taxes (CBDT) on Friday amended the Income-tax Rules, 1962, which came to be known as the Income-tax ( 17th Amendment) Rules, 2020.

The Board seeks to amends Tax Collected at Source (TCS) Rules. The amount received or debited on which TCS was not collected from the buyer is to be reported under these new rules.

The CBDT has amended Rule 31AA, Rule 37BC, Rule 37CA, Rule 37-I of the Income Tax Rules, 1962, and Form No. 27EQ to incorporate the changes introduced in the TCS provisions by the Finance Act, 2020.

The Amendment in Rule 31AA is related to furnishing of ‘Statement of TCS’ under section 206C(3) of the Income Tax Act, 1961.

According to section 206C(3), every collector is required to furnish a statement of tax collection and deposit of TCS in the prescribed form and within the prescribed time limit after paying the tax collected to the credit of the Central Government.

Rule 31AA(1)/(2) prescribes the filing of quarterly TCS statements under Section 206C(3) in Form No. 27EQ.

Two new clauses are inserted in Rule 31AA(4) to provide for particulars under sections 206C(1G) and 206C(1H) in view of the amendments related to TCS provisions being made in the Act by the Finance Act, 2020.

In the principal rules, from the date of publication in the Official Gazette, in rule 37BC, in sub-rule (1), after the words “fees for technical services”, the words “, dividend” shall be inserted.

In the principal rules, in rule 37CA, the words, brackets, figures and letters ‘sub-section (1) or sub-section (1C)’, wherever they occur, shall be omitted.

In the principal rules, in rule 37-I, after sub-rule (2), “Notwithstanding anything contained in sub-rule (2), for the purposes of subsection (1F) or, sub-section (1G) or, sub-section (1H) of section 206C, credit for tax collected at source shall be given to the person from whose account tax is collected and paid to the Central Government account for the assessment year relevant to the previous year in which such tax collection is made,”  sub-rule shall be inserted.

In the principal rules, in Appendix II, in Form 27EQ, for the “Annexure”, the following “Party wise Break Up of TCS” Annexure shall be substituted

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