IndiaFilings / Learn / Income Tax / Cbdt Amends Rule 31A And Tds Return Forms 26Q 27Q
CBDT Amends Rule 31A and TDS Return Forms 26Q & 27Q

CBDT Amends Rule 31A and TDS Return Forms 26Q & 27Q

CBDT vide Notification No. 43/2020 dated 3rd July 2020 has made certain amendments in the present Rule 31A of the Income Tax Rules, 1962 with respect to the furnishing of TDS returns in Form 26Q and Form 27Q. Here is the list of amendments made in the Rule 31A. 1. Rule 31A(4)(viii) amended to include the transactions where tax has been deducted at a lower rate Finance Act 2020 had amended Section 197A(1F) to allow for a lower deduction of tax in certain cases. Prior to the amendment the said section only provided for non-deduction of tax in certain cases. Rule 31A(4) prescribes the list of particulars that a deductor is required to furnish in the statement of deduction of tax.  The present clause (viii) of the said rule prescribes that a deductor shall furnish the particulars of the amount paid or credited on which no tax has been deducted in accordance with notification issued under Section 197A(1F). An amendment has been made to said clause (viii) to direct the deductor to include details of all those transactions where tax has been deducted at a lower rate. The amendment is consequential to the amendment made under Section 197A(1F). 2. Existing Rule 31A(4)(ix) amended to incorporate the amendments in Section 194N relating to deduction of tax on cash withdrawals Section 194N deals with the deduction of tax on withdrawal of cash in excess of a specified limit. The section had been substituted by Finance Act 2020 and amendments were made to provide for additional and stricter provisions for deduction of tax on cash withdrawals by the non-filers of income tax returns. The amendments were also made to provide for various clauses in which either the deductions of tax shall not be made or shall be made at lower rates as may be prescribed by the government by way of notifications.  The present clause (ix) of Rule 31A(4) has been substituted with the following clause in line with the amendments made in Section 194N. The substituted clause states as under: “furnish particulars of amount paid or credited on which tax was not deducted, or deducted at lower rate in view of the notification issued under second proviso to section 194N or in view of the exemption provided in third proviso to section 194N or in view of the notification issued under fourth proviso to section 194N.”

3. Four new clauses have been added in Rule 31A(4) after clause (ix) to furnish the details of transactions where tax has been not deducted or deducted at a lower rate:

Clause Description The relevant section in relation to which the clause has been inserted
(x) “Furnish particulars of amount paid or credited on which tax was not deducted or deducted at lower rate in view of the notification issued under sub-section (5) of section 194A” Section 194(5) had been inserted by Finance Act 2020 to empower the Central Government to notify such payments to such classes of person/(s) from which deduction of tax shall not be made or made at a lower rate  
(xi) furnish particulars of amount paid or credited on which tax was not deducted under sub-section (2A) of section 194LBA” Section 194LBA(2A) inserted by Finance Act 2020 provides that no deduction of the tax shall be made by a business trust from the dividend distributed to the unitholders of business trust in a case where the special purpose vehicle has not exercised the option available under Section 115BAA
(xii) “furnish particulars of amount paid or credited on which tax was not deducted in view of clause (a) or clause (b) of sub-section (1D) of section 197A” Section 197A(1D) provides that no deduction of tax shall be made by an Offshore Banking Unit from the interest payments to a person being a non-resident or not ordinarily resident in India
(xiii) “furnish particulars of amount paid or credited on which tax was not deducted in view of the exemption provided to persons referred to in Board Circular No. 3 of 2002 dated 28th June 2002 or Board Circular No. 11 of 2002 dated 22nd November 2002 or Board Circular No. 18 of 2017 dated 29th May 2017” Circular No. 3/2002: It provides an exemption from deduction of tax under sections 193, 194A, and 194K of the Income Tax Act on the payments of incomes to Ramakrishna Math and Ramakrishna Mission whose income is exempt under section 10(23C)(iv) of the Income Tax Act. Circular No. 11/2002: It extended the exemption provided under Circular No. 3/2002 to provide that incomes being interest on all securities under section 193 may be paid to Ramakrishna Math and Ramakrishna Mission without tax deduction. Circular No. 18/2017: It allows payments to be made to certain specified institutions without deduction of tax.
The notification also contains the amended version of Form 26Q and Form 27Q. To view the copy of the notification you may click here. Read further to understand the changes in the forms.

Changes in Form 26Q 

1. Following sections have been inserted in the form so that the details of transactions relating to such sections can be added:
Section Nature of Payment Section Code
194K Income in respect of units 94K
194N Payment of certain amounts in cash 94N
194N First Proviso Payment of certain amounts in cash to non-filers 94N-F
194O Payment of certain sums by the e-commerce operator to e-commerce participant 94O
2. Section code for section 194J has been divided into 2 parts to give effect to two different rates of 2% and 10% as provided by amendments in section 194J by Finance Act 2020:
Section Nature of Payment Section Code
194J(a) Fees for technical services (not being professional services), royalty for sale, distribution or exhibition of cinematographic films and call center @2% 94J-A
194J(b) Fee for professional service or royalty etc. @10% 94J-B
3. The remarks and their codes for lower or non-deduction of tax have been amended in line with the amendments made in Rule 31A vide this notification. 4. Columns have been added in the annexure to furnish details in respect of cash withdrawn by a resident on which tax is being deducted pursuant to the provisions of Section 194N.

Changes in Form 27Q

1. Following sections have been inserted in the form so that the details of transactions relating to such sections can be added:
Section Nature of Payment Section Code
194N Payment of certain amounts in cash 94N
194N First Proviso Payment of certain amounts in cash to non-filers 94N-F
2. Columns have been added in the annexure to furnish details in respect of cash withdrawn by a non-resident on which tax is being deducted pursuant to the provisions of Section 194N. 3. The remarks and their codes for lower or non-deduction of tax have been amended in line with the amendments made in Rule 31A vide this notification.
IndiaFilings
Updated on: July 24th, 2020

Popular Post

Download ePAN Card – Get ePan from NSDL & UTIITSL
80 Small Business Ideas

Starting a small business can be a transformative venture, offering the exciting opportunity...

Nadakacheri – Income Caste Certificate Download Online in Karnataka
TDS Rate Chart for Financial Year 2025-2026 (Assessment Year 2026-2027)

Tax deduction at source, shortly and popularly known as TDS, was introduced by the Income Tax...

Divorce Rules in India: Everything You Need to Know
How To Download GST Registration Certificate Online?

Goods & Services Tax Certificate is issued to people who are registered under GST...

PAN Card Cancellation Online
Find Complete Details of GST Registration Procedure

GST registration applies to all individuals and entities supplying goods or services in India. GST...

Check Your PF Claim Status Online Using PF Tracking ID
Gift Tax in India: Applicability, Exemptions and Rules

Gift tax in India is applied when the value of the received gift exceeds ₹50,000 in the...

Check Your PF Claim Status Online Using PF Tracking ID
Old Regime vs New Regime 2025: Which Tax Regime is Better for You?

The Union Budget 2025 has brought significant changes to India’s personal income tax structure, raising the...

Check Your PF Claim Status Online Using PF Tracking ID
What is the minimum turnover for GST?

The Goods and Services Tax (GST) is an indirect tax system introduced in India in 2017. It functions...

Check Your PF Claim Status Online Using PF Tracking ID
How can I check if a trademark is registered?

A trademark search is simply checking if another person or organization does not already own the...

Check Your PF Claim Status Online Using PF Tracking ID
Section 194H of the Income Tax Act: TDS on Commission & Brokerage

Section 194H of the Income Tax Act in India mandates the deduction of Tax at Source (TDS) on commission or brokerage...

Check Your PF Claim Status Online Using PF Tracking ID
Section 80G Deduction - Income Tax Act

Section 80G Deduction is a facility available in the Income Tax Act which allows taxpayers to...

Check Your PF Claim Status Online Using PF Tracking ID
Crypto Tax in India: Taxation On Cryptocurrency

The Income Tax Department (ITD) has not provided specific guidance on crypto taxes for Indian investors. However...

Check Your PF Claim Status Online Using PF Tracking ID
Internal Audit Applicability Under Companies Act, 2013

Internal audit applicability is a critical concept for companies in India, impacting various...

Check Your PF Claim Status Online Using PF Tracking ID
Difference between Private and Public Company

In the business world, two main types of companies exist: private company and public company...

Check Your PF Claim Status Online Using PF Tracking ID
New GST Rules for Rent

Ministry of Finance vide a Notification No 05/2022- Central Tax (Rate) dated 13.7.2022 has issued...

Check Your PF Claim Status Online Using PF Tracking ID
GSTR-1 and GSTR-3B Due Date Extension - New Due Dates For January 2025

The Central Board of Indirect Taxes and Customs (CBIC) has recently announced an extension...

Check Your PF Claim Status Online Using PF Tracking ID
Different Depreciation Rates under Companies & Income Tax Act

Depreciation is a key concept in finance and accounting. It helps us manage how the value of...

Check Your PF Claim Status Online Using PF Tracking ID
Form 10IA - Section 80DD Deduction

Form 10IA of the Income Tax Department must be filed by taxpayers claiming income tax deduction...

Check Your PF Claim Status Online Using PF Tracking ID
GST on Used Cars: New 18% Tax Rate Explained

The Goods and Services Tax (GST) system in India has been a significant reform in the country's...

Check Your PF Claim Status Online Using PF Tracking ID
MSME Registration - Udyam Registration

India's Gross Domestic Product (GDP) benefits significantly from the substantial...

Check Your PF Claim Status Online Using PF Tracking ID
Section 43B(h) - New MSME 45 Days Payment Rule

The Finance Act, 2023 introduced the MSME 45-day payment rule under Section 43B(h) of the Income Tax Act...

Check Your PF Claim Status Online Using PF Tracking ID
Direct Tax Vivad Se Vishwas (DTVSV) Scheme, 2024

The Direct Tax Vivad Se Vishwas (DTVSV) Scheme, 2024, was announced by Union Finance Minister...