Tax Deducted at source under section 194C

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This discussion clarifies the implications of late Tax Deducted at Source (TDS) payments under Section 194C. If TDS is deducted but not paid on time, interest at 1.5% per month is applicable from the deduction date to the deposit date. Furthermore, penalties for late filing of TDS returns can range from ₹10,000 to ₹1,00,000, with additional late filing fees under Section 234E if returns are not submitted within one year of the due date.

Jayam Ramesh K C

Jayam Ramesh K C (Querist)

07 March 2025 Section 194 C
Company obtained Tan Number in January 2025.
But TDS was deducted @2 Percent on 30.11.2024 and not paid. On 7th March 2025 company wants to make the payment. The amount paid to a contractor is Rs 160000 and the work order is in progress
What is the Interest to be paid for late payment and what is the penalty for late filing of TDS Returns
What is the Interest for late payment and penalty for late filing of returns
Jayam Ramesh

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

10 March 2025 Interest for Late Payment of TDS: 1.5% per month from the date of deduction to the date of deposit. This interest is calculated from the date the TDS was deducted to the actual date of deposit, considering each month as a full period.

Penalty for Late Filing of TDS Returns: ₹10,000 to ₹1,00,000 if not filed within one year of the due date, along with a late filing fee under Section 234E

Jayam Ramesh K C

Jayam Ramesh K C (Querist)

02 April 2025 Thanks. Here the issue is the Firm in question paid advance 4.8 Crores from november 2024 to march 25 and obtained
final bill in Match
TDS is not paid for advances paid in November 24 and December 2024 which falls under 3rd quarter. So penalty will apply with appropriate interest
Is it right

Jayam Ramesh K C

Jayam Ramesh K C (Querist)

02 April 2025 What happens if TDS is not deducted. We should deduct at the time of payment
Is it right we have to pay penalty for non dedction of TDS. That is what act says

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

02 April 2025 Yes, late fee will apply for the delayed period.
refer:
1. https://taxguru.in/income-tax/interest-late-fees-penalty-tds-provision.html

2. https://cleartax.in/s/section-234e-late-filing-penalty-fee-tds-tcs-returns

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