Consequences for non deduction of TDS/TCS

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Daya

Daya (Querist)
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07 January 2025 what will be the consequences for Non Deduction of TDS or TCS

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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07 January 2025

Section 40(a)(i): Expenses claimed by the taxpayer can be disallowed if TDS is not deducted.
Section 271C: A penalty equal to the amount of TDS/TCS not deducted or collected can be imposed.
Section 271H: A penalty of ₹10,000 to ₹1 lakh can be imposed for failure to collect TCS.
Section 201(1A): Interest at the rate of 1% to 1.5% per month can be charged on the amount of TDS/TCS not deducted or collected.
Section 206C(7): Interest at the rate of 1% to 1.5% per month can be charged on the amount of TCS not collected.
Section 276B: Failure to deduct TDS can lead to prosecution, which may result in imprisonment for a term of 3 months to 7 years and a fine.