POSSIBILITY OF DEPOSITING TDS ON QUARTERLY BASIS INSTEAD OF MONTHLY BASIS

Amid situation of lockdown where establishments are struggling with temporary closure of businesses, maintaining adequate fund flow situation would become critical for the management of any establishment. Establishments are keen to reduce fixed variable & fixed overheads by adopting various measures like re-negotiation of agreements, curtailing payroll overheads etc to address the issue of fund flow requirement, however still there are some fixed overheads like statutory dues which require immediate fund outflow. TDS is one of the statutory compliance which require cash outflow on monthly basis. In this post we will discuss how monthly fund requirement of depositing TDS on monthly basis can be converted to quarterly basis.

Rule 30 of Income Tax rules states the provision related to deposit of TDS, relevant text of provision is extracted below:

 “(2) All sums deducted in accordance with the provisions of Chapter XVII-B by deductors other than an office of the Government shall be paid to the credit of the Central Government—

(a)		on or before 30th day of April where the income or amount is credited or paid in the month of March; and
(b)		in any other case, on or before seven days from the end of the month in which—

(i)		the deduction is made; or
(ii)		income-tax is due under sub-section (1A) of section 192.”

However sub rule (3) empowers assessing officer with prior approval of Joint Comissioner to permit quarterly payment of TDS, relevant text of provision is extracted below:

“(3) Notwithstanding anything contained in sub-rule (2), in special cases, the Assessing Officer may, with the prior approval of the Joint Commissioner, permit quarterly payment of the tax deducted under section 192 or section 194A or section 194D or section 194H for the quarters of the financial year specified to in column (2) of the Table below by the date referred to in column (3) of the said Table:—

TABLE

Sl. No.	Quarter of the financial year ended on	Date for quarterly payment
(1)	(2)	(3)
1.	30th June	7th July
2.	30th September	7th October
3.	31st December	7th January
4.	31st March	30th April   ”

Basis the above, any establishment may evaluate the possibility of filing an application with the officer seeking the special approval by highlighting the impact on the business due to COVID19 as the reasons impacting the business adversely.