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As time is passing away the TDS provisions are made more & more stringent day by day. TDS being one of the most important revenue earning source for the govt.  has been made more stringent. The penal provisions in respect of TDS/TCS returns for the period commencing from 1st July, 2012 will make the life of a TDS deductor more difficult.

In the present scenario, there is a penalty for delayed filing of TDS/TCS returns, but there is no specific penalty for submitting inaccurate particulars in the TDS/TCS returns. But now section 271H has been proposed to be introduced from 1st July, 2012 in which a penalty ranging from Rs. 10000/- to Rs. 100000/- will be imposed for delayed & inaccurate particulars furnished in the TDS/TCS returns like incorrect PAN, amount of TDS deducted, wrong details of TDS deposited etc., hence the tax deductor must be careful now while filing the TDS/TCS returns. But in case of delayed filing of TDS/TCS returns, this provision has given one year time from the due date of filing TDS/TCS returns after depositing the TDS/TCS amount along with interest to avoid this penal provision. There is only one favorable point for the deductor in this section which is that in case he has a reasonable cause for the failure, no penalty under this section can be imposed.

Another new section 234E (applicable for the period starting on or after 1st July, 2012) has been introduced to levy a fee of Rs. 200 per day (subject to total amount of TDS/TCS for the period) in case of delayed furnishing of TDS/TCS returns. The above section has been introduced to ensure timely filing of TDS /TCS returns for timely processing. It may be noted that this fee is prepaid & mandatory in nature i.e. it is to be paid before filing of delayed TDS/TCS returns.

In this regard it is important to note that there is already an existing section 272A in which a penalty of Rs.100/- per day ( subject to total amount of TDS/TCS for the period) is levied for delayed filing of TDS/TCS returns but this penalty is not mandatory  in nature if the  assessee has reasonable cause for such delay. Further this penalty is also not a prepaid penalty like the above.

Taking note of above two sections, it can be said that though the above two sections will take care of the problem of delayed filing of returns but the govt. should also minimize the procedural problems of TDS/TCS deductors before the introduction of this tough penal provisions.


CA Abhisek Tosniwal

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Category Income Tax, Other Articles by - ABHISEK TOSNIWAL