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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)


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Category Income Tax, Other Articles by - SAMEER AHMED 



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