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Tuesday, Aug 30, 2005

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Banks, coops get more time to file returns

K.R. Srivats

New Delhi , Aug 29

BANKS, cooperative societies and public companies involved in providing of long-term finance for construction of residential houses can breathe easy.

The Finance Ministry has now given more time to such entities for filing their returns (for the quarter ended June 30, 2005) on the details of deposits on which no tax has been deducted at source on the interest paid or credited by them.

The due date for filing of the quarterly return for the quarter ended June 30, 2005 has now been extended to September 30, 2005, official sources said. The earlier deadline expired on July 31. The issue of extension was under the Ministry's consideration since the banks had made representation to it.

As an anti-tax evasion measure, the Finance Minister, Mr P. Chidambaram, had in this year's Budget announced that banks would be required to report to the Government all deposits that are exempt from tax deduction at source (TDS) on interest.

"The banks are not yet ready for submission of such details. The department (income-tax department) too has to gear up. There are issues on both sides," official sources said, when asked about the rationale for extension of the due date.

Currently, the income-tax law specifies that a bank would not be required to deduct tax at source in those cases where the interest (other than interest on securities) paid or credited by a branch to a person in a financial year does not exceed Rs 5,000.

The Finance Act 2005 mandates banks and certain cooperative societies and public companies that are responsible for paying to a resident any income not exceeding Rs 5,000 by way of interest (interest other than interest on securities) to prepare returns for the period ending on June 30, September 30, December 31 and March 31 in each financial year.

According to the norms laid down by the income-tax department, these quarterly returns are to be filed with the department on or before July 31, October 31, January 31 and June 30 following the respective quarter of the financial year.

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