Income-tax (19th Amendment) Rules, 2022
Income-tax (19th Amendment) Rules, 2022
The Central Board of Direct Taxes (CBDT) vide a Notification No. 67/2022 dated 21.06.2022 in G.S.R. 463(E) has notified Income-tax (19th Amendment) Rules, 2022 amending the Income-tax Rules, 1962 to incorporate changes introduced by the Finance Act, 2022 related to TDS.
With this amendment, CBDT notified furnishing of challan-cum-statement in Form No. 26QE and TDS certificates in Form No. 16E in case of TDS on Virtual Digital Assets (VDA) or crypto-currency under section 194S of the Income-tax Act, 1961. The key changes introduced by the CBDT vide Income-tax (19th Amendment) Rules, 2022 have been elaborated in this article.
For details on Guidelines for TDS on Virtual Digital Assets (VDAs)
Synopsis of Income-tax (19th Amendment) Rules, 2022
The CBDT vide the Income-tax (19th Amendment) Rules, 2022 has amended existing Rules 30, 31 & 31A, annexure to Form No. 26Q, and Form Nos. 26QB, 26QC & 26QD related to furnishing of TDS statements and issue of TDS certificates to the deductees respectively. The CBDT has also inserted new Forms 26QE and 16E as well.
Section 194S of the Income Tax Act
Section 194S provides that any person, responsible for paying to a resident any sum by way of consideration for the transfer of a virtual digital asset (VDA), shall deduct tax at the rate of 1% of such sum.
Insertion of Rule 30(2D) – Time Limit to Deposit the TDS in Prescribed Challan
A new sub-rule (2D) in Rule 30 is inserted with effect from 1st July 2022 to provide for payment of TDS under section 194S on the transfer of VDAs to the credit of the Central Government within 30 days from the end of the month in which tax is deducted.
Form No. 26QE – Challan-cum-Statement
The TDS under section 194S shall be paid by Challan-cum-statement in Form No. 26QE. Hence, tax deducted under section 194S in July 2022 shall be required to be deposited by 30th August 2022.
Insertion of Rule 30(6D) – Online Filing of Form 26QE
A new sub-rule (6D) is inserted in Rule 30 to provide for online or electronic filing of Form No. 26QE. Hence, tax is required to be deposited in online mode only.
It should be noted that Form No. 26QE is required to be furnished with the PAN of the deductor. No TAN is required to be obtained if the deductor does not have so.
However, the statement of TDS under section 194R and section 194S can also be furnished in Form No. 26Q in case the deductor has TAN and is willing to furnish the statement in Form No. 26Q instead of Form No. 26QE. This notification has also amended Form No. 26Q to include section codes for the following:
- Section 194R (Code is 94R),
- First proviso to section 194R for the benefits or perquisites provided in kind (code is 94R-P),
- Section 194S (Code is 94S),
- First proviso to section 194S where the payment is made in kind or in case of an exchange of VDAs (code is 94S-P),
Insertion of Rule 31(3D) – Time Limit to Furnish TDS Certificate
A new sub-rule 3(D) is inserted in Rule 31 to provide that every deductor who has deducted tax by the provisions of section 194S of the Act shall furnish the TDS certificate in Form 16E within fifteen days from the due date of furnishing the challan-cum-statement in Form No. 26QE after generating and downloading the same from the designated web portal.
Hence, the TDS certificates in Form No. 16E in respect of tax deducted under section 194S in July 2022 shall be required to be furnished to the deductees by 15th September 2022.
Amendment in Rule 31A – Furnishing of Statement of TDS under section 200(3)
Rule 31A prescribes rules for furnishing the statement of TDS under section 200(3) of the Act. Section 200(3) casts an obligation on the deductors to furnish a statement of TDS in the prescribed form within the specified time limit after paying the tax deducted to the credit of the Central Government.
Sub-rule (4) of Rule 31A is amended to include the furnishing of particulars in respect of deduction of tax under the following sections:
- Section 194B relates to winnings from lottery or crossword puzzles
- Section 194R relating to deduction of tax on benefits or perquisites in kind
- Section 194S relating to deduction of tax under section 194S
Insertion of Rule 31A (4D)
A new sub-rule (4D) is inserted in Rule 31A and provides the due date for electronically furnishing the challan-cum-statement in Form No. 26QE. It prescribes that the challan-cum-statement in Form No. 26QE shall be required to be furnished electronically within thirty days from the end of the month in which the deduction is made.
Due Date to Furnish Form 26QE & Form 16E
Due date to furnish challan-cum-statement in Form No. 26QE and TDS certificates in Form No. 16E
in respect of TDS under section 194S on payment of consideration for transfer of VDAs is summarized as below-
Particulars | Due Date |
Payment of TDS u/s 194S in Form 26QE | Within 30 days from the end of the month in which tax is deducted |
Furnishing statement of TDS in Form 26QE | Within 30 days from the end of the month in which tax is deducted |
Issue of TDS Certificates | Within 15 days from the due date of furnishing Form No. 26QE |
Other Amendments
The Income-tax (19th Amendment) Rules, 2022 has also inserted new Form No. 16E and Form No. 26QE in Appendix II of the Rules with effect from 01.07.2022.
Further, Form No. 26Q is also amended to include section codes for TDS under section 194R and section 194S. Further, the IT 19th amendment rules have also amended the following Forms:
- Form 26QB (challan-cum-statement for TDS under section 194-IA in case of transfer of immovable properties) due to non-applicability of the provisions of section 206AB of the Act on deduction of tax under section 194-IA,
- Form 26QC (challan-cum-statement for TDS under section 194-IB in case of payment of rent by individuals) due to non-applicability of the provisions of section 206AB of the Act on deduction of tax under section 194-IB,
- Form 26QD (challan-cum-statement for TDS under section 194M in case of certain payments by individuals) due to non-applicability of the provisions of section 206AB of the Act for deduction of tax under section 194M.