Circular No. 565

What it does

Brings to notice the new half-yearly return obligation for tax collected at source. Under section 206C(5A) every collector must prepare returns for the periods ending 30 September and 31 March in each financial year and deliver them to the prescribed income-tax authority. Rule 37E, prescribing the form of those returns, and rule 37F, naming the authority they go to, were inserted by Notification S.O. 149(E) dated 19-2-1990. The returns are to be filed within one month from the end of the period they cover.

Why it was issued

It follows the Board's earlier circulars on section 206C, Circular No. 525 dated 24-11-1988 and Circular No. 535 dated 26-6-1989, to communicate the newly prescribed return machinery.

Who it reaches

Sellers collecting tax at source on liquor and forest produce
Officers of State excise and forest departments filing collection returns
Assessing Officers processing section 206C returns

The provisions it speaks to

Left, the provision of the Income-tax Act, 1961 as the instrument itself names it. Right, the section of the Income-tax Act, 2025 that the department’s own concordance maps it to — which is where the same ground is now covered.

Under the 1961 Act	Now
s.206C	s.2, s.390, s.394, s.395, s.397, s.398, s.400, s.402

The instrument, as the Board published it

The words below are the department’s own, reproduced from its published text. Where the department’s copy carried a publisher’s notes after the instrument, those are not reproduced.

SECTION 206C l PROFITS AND GAINS FROM BUSINESS OF TRADING IN ALCOHOLIC LIQUOR, FOREST PRODUCE, ETC.
Instructions regarding deduction of tax at source on profits and gains from the business of trading in alcoholic liquor, forest produce, etc.

1. Attention is invited to this Department’s Circular No. 525, dated 24-11-1988 and No. 535, dated 26-6-1989, wherein the provisions relating to collection of income-tax at source under section 206C of the Income-tax Act in respect of profits and gains from the business of trading in alcoholic liquor, forest produce, etc. were communicated.
2. According to sub-section (5A) of section 206C, every person collecting tax in accordance with the provisions of the said section shall prepare half-yearly returns for the period ending on 30th September and 31st March in each financial year and deliver or cause to be delivered to the prescribed income-tax authority, the said returns in such form and verified in such manner and setting forth such particulars and within such time as may be prescribed. A new rule 37E prescribing the half-yearly returns regarding tax collected at source u/s 206C(5A) and another rule 37F prescribing the income-tax authorities to whom these half-yearly returns are to be furnished, have been inserted by the Income-tax Rules, 1962, vide Notification No. S.O. 149(E), dated 19-2-1990. These half-yearly returns are to be filed within one month from the end of the period to which the returns relate.
Circular : No. 565, dated 11-7-1990.

What to watch

The filing window is one month from the end of the half-year, so 31 October and 30 April.
The circular only notifies the obligation; the particulars are those in rule 37E and Form prescribed thereunder.
Half-yearly TCS returns have long since been replaced by the quarterly statement regime, so the periodicity given here no longer describes current practice.

Where you meet it

On an old penalty proposal for failure to furnish the section 206C(5A) return.

What it names

Rules it names. Rule 37E, 37F of the Income-tax Rules, 1962. The 1962 Rules were replaced by the Income-tax Rules, 2026, which renumbered nearly everything: a rule number quoted here almost never means the same rule today.

On the same provision

Other instruments in this library that name the same provision of the 1961 Act. They are not necessarily still operative, and a later one may have replaced an earlier one without saying so.

Notification No. 35/2025 [F. No. 370142/11/2025-TPL] / GSR 252(E) — Ministry of Finance 22 April 2025
Notification No. 36/2025 [F. No. 370142/11/2025-TPL] / SO 1825(E) — Ministry of Finance 22 April 2025
Notification No. 115/2024 [F. No. 370142/21/2024-TPL] / SO 4545(E) — 2 the Gazette of INDIA : Extraordinary [Part Ii—sec. 3(ii)] 16 October 2024
Circular No. 11/2023 — Circular No. 11 of 2023 6 July 2023
Circular No. 10/2023 — Circular No. 10 of 2023 30 June 2023
Notification No. 99/2022 [F. No. 370142/9/2022-TPL Part (2)] / SO 3878(E) — 2 the Gazette of INDIA : Extraordinary [Part Ii—sec. 3(ii)] 17 August 2022

← Circular No. 566 · Circular No. 564 →

A circular binds the department, not you and not a court. The Board issues a circular to its own officers. An assessee may hold the department to a circular that helps him; the department cannot hold an assessee to one that hurts him, and the Tribunal and the courts decide the law for themselves.

Source: the Income Tax Department’s own published text — its page for this instrument.

What this is