Is der any prob if we deduct tds aftrt the end of year?

Save Share

This query is : Resolved

Vijay Jain (Querist)

12 October 2013 Hello Experts.. I want to ASK that is it ok if I deduct tax on yearly basis.. if we r paying interest to our creditor on late payment. and they charging interest on monthly basis ...if I deduct tax after year ending only once then der is any penalty or interest ?

@VaibhavJ

@VaibhavJ (Expert)

12 October 2013 Hi

TDS to be deducted at the time of booking entry or making payment whichever is earlier.

According to the new instructions issued, a deductor, either government or private, will have to submit a "compulsory" fine of Rs 200 for delay in filing either TDS every day beyond the stipulated date of remittance of these category of taxes.

Similarly, the penalty would be between Rs 10,000 to Rs one lakh for furnishing incorrect information or failure to file the collection statement within the due date.

@VaibhavJ

@VaibhavJ (Expert)

12 October 2013 a) Interest charge U/S 201(A): Under this the person responsible for non deduction of TDS is treated as “assessee in default”. Under this section the responsible person is liable for paying simple interest at the rate of 1 per cent for the whole tenure when TDS was not deducted. This interest should be submitted before the submission of the quarterly statement in each quarter. There is no way or provision under which this interest amount can be waived. It is mandatory and that the responsible person has to deposit the same as penalty. Rule 119 A is used for Interest is calculation process. Following rules are used for calculation of interest to be paid by the person who failed to deduct TDS.

(i) Interest will be calculated for the full month irrespective of the fact that whether it has to be calculated for every month or for only part of the month.

(ii) The taxable amount with reference to which interest is calculated will always be rounded off to nearest multiple of 100. Any further fractions will be ignored.

@VaibhavJ

@VaibhavJ (Expert)

12 October 2013 b) Penalty under U/S 221: If the assessing officer is not satisfied with the reasons because of which the assessee failed to deduct the TDS then the assessee will be liable for the penalty. The penalty amount should not exceed the tax amount. Although the assessing officer makes sure that the assessee gets the required opportunity to present his clarification and justifications.

c) Penalty under U/S 271C: A penalty amount which is equivalent to the tax the assessee failed to deduct can be levied under U/S 271C. It can only be levied by the Joint Commissioner of Income Tax department.