Here we will get to understand that what defaults are oftenly occurs in TDS and how we can prevent ourselves from the penalties and fines in TDS under section 201(1), 201(1A) and 234E of Income tax act 1961.
If we do a bit more focus on it we can easily prevent them and proceeds ahead without any Defaults.
Generally Following are the Common Reason of defaults in TDS:-
1. Late Deduction of TDS
2. Short Deduction of TDS
3. Late Payment of TDS
4. Short Payment of TDS
5. late Filing of Return
1. Late/short deduction of TDS: Its means that the TDS was not deducted Entire or partly amount at the point of deduction of TDS.
Now a question will be arising. What will be the point of deduction? Let’s see the answer in this chart
|
Point of deduction of TDS (When the TDS to be deduct) |
|
In Salary: At the time of payment |
|
Others: When income paid or credited to the account whichever is earlier |
What if there is late/short deduction of TDS
CONSEQUENCES OF DEFAULT: When Fail to Deduct or short deduction of TDS
|
Default/ Failure |
Section |
Nature of demand |
Quantum of demand or penalty |
|
Failure to deduct tax at Source |
201(1) |
Tax demand |
Equal amount of tax deductible but not deducted |
|
201(1A) |
Interest |
@1 % p.m. or part of month of tax deductible till actual Deposited. |
|
|
271C |
Penalty |
Equal amount of tax deductible but not deducted. |
2. Late/short Payment of TDS: It means that the Entire or Partly amount not deposited on or before due shall be liable to penalty and deemed as defaulter in TDS following Penalty shall be charge.
Now what are the Due dates?
Due Date for depositing TDS
|
Quarter |
Salary |
Other than Salary |
|
April – February |
7th of next month |
7th of next month |
|
March |
30th April |
30th April |
What if the TDS is deposited on or before due date?
CONSEQUENCES OF DEFAULT: In case Non Deposited or Short Deposited
|
Default/ Failure |
Section |
Nature of demand |
Quantum of demand or penalty |
|
Failure to deposit tax at source |
201(1) |
Tax demand |
Equal to tax amount not deposited |
|
201(1A) |
Interest |
@1.5% p.m. or part of month of tax not deposited |
|
|
276B |
Prosecution |
Rigorous imprisonment for term for a minimum of 3 months which may extend to 7 years and with fine |
3. Late filing of Return: It means late return filing after the Due date and it shall be liable to pay penalty. The due date is different for the Govt Deductor and Non Govt Deductor.
Now what are the Due dates for filing the TDS RETURN?
DUE DATE OF FILING TDS RETURN
|
Quarter |
Non-Govt Deductor (24Q,26Q,27Q) |
Govt Deductor (24Q,26Q,27Q) |
|
First (Apr-Jun) |
15th July |
31th July |
|
Second (Jul-Sep) |
15th Oct |
31th Oct |
|
Third (Oct –Dec) |
15th Jan |
31th Jan |
|
Fourth(Jan-March) |
15th May |
15th May |
When the return not filed on or before the due date as given above and prescribed, the following penalty shall be liable to pay by defaulter
CONSEQUENCES OF DEFAULT :- When Return Not Filed Timely
|
Default/ Failure |
Section |
Nature of demand |
Quantum of demand or penalty |
|
Failure to file TDS return in time |
234E |
Fine |
Rs. 200 per day will be levied on the deductor, as long as TDS Statement is not filed upto the maximum of TDS amount |
|
Failure to furnish prescribed statements u/s 200(3) |
272A(2) (k) |
Penalty |
Rs. 100 every day during which the failure continues subject to maximum of TDS amount |
|
If deductor exceeds one year time limit to File TDS Statement. If deductor furnishes Incorrect details like PAN, TDS Amount, Payment of Challan etc. |
271H |
Penalty |
Deductor has to pay a penalty Ranging from minimum of Rs. 10,000/to One Lac rupees |
For any Query and Feedback write to tds@camsa.in.
We hope this information aid you properly and with this may be prevent from penalty and fines
Thanks Sameer Ahmed (Article assistant)
CAclubindia
