Tds return and penal interest.
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
07 May 2012
HI EXPERTS...
KINDLY HELP ME WITH THESE PROBLEMS...
1) If some one has to pay penal interest on late deduction and payment of tds then are there two different challan 281 required so as to bifurcate the to amounts ? and m confused whether interest will form part of quarterly return too ?
2) if tds for a certain FY was not deducted and now it is being deducted and deposited out of pocket with no reimbursement from deductee (in case of loan from nbfc tds is deducted on intt on loan and deposited out of pocket and later reimbursed by nbfc)then also tds return for such amount is required to be filed and form 16A generation is also required?
kindly help me with the above problems I am in great need of the solutions to the above two problems...thanks...
KINDLY HELP ME WITH THESE PROBLEMS...
1) If some one has to pay penal interest on late deduction and payment of tds then are there two different challan 281 required so as to bifurcate the to amounts ? and m confused whether interest will form part of quarterly return too ?
2) if tds for a certain FY was not deducted and now it is being deducted and deposited out of pocket with no reimbursement from deductee (in case of loan from nbfc tds is deducted on intt on loan and deposited out of pocket and later reimbursed by nbfc)then also tds return for such amount is required to be filed and form 16A generation is also required?
kindly help me with the above problems I am in great need of the solutions to the above two problems...thanks...
Querist : Anonymous
Querist :
Anonymous
(Querist)
10 May 2012
HEY SOME1 THERE PLS..HELP ME...WITH THE ABOVE PROBLEM
28 July 2025
Sure! Here’s a detailed explanation for your two queries:
---
### 1) Penal Interest on Late Deduction and Late Payment of TDS:
* **Are two separate challans (Challan 281) required for TDS and interest?**
**No.** You can pay both the TDS amount and interest/penalty in the **same challan 281** by filling the relevant details for each. The challan allows you to enter principal amount (TDS), interest, and penalty separately.
However, if you want to keep things very clear, you may pay in separate challans, but it’s not mandatory.
* **Will interest form part of the quarterly TDS return?**
No, **interest or penalty amounts are not reported in the TDS quarterly return.**
The TDS return only reports TDS deducted and deposited, not interest or penalties. Interest paid is accounted for separately in the Income Tax Department’s system and linked with your TAN.
---
### 2) TDS deducted and deposited out of pocket (not deducted at source):
* If you **have deducted TDS late** (i.e., after payment to the deductee or non-deduction earlier), and **you are depositing TDS from your own funds**, the following is applicable:
* **You must file the TDS return** for that period/FY with the details of the deductee and the TDS deducted and deposited.
* **Form 16A (TDS certificate) should be issued** to the deductee for the TDS amount deducted late, even if the deductee did not bear the TDS cost directly (i.e., it was not deducted from their payment).
* The deductee can claim this TDS credit in their income tax return.
* **Example:**
If NBFC gave a loan and TDS on interest was not deducted on time but now you deduct and deposit the TDS yourself (out of pocket), you still need to file the TDS return for that interest payment period and issue Form 16A to the NBFC.
---
### Summary:
| Question | Answer |
| ------------------------------------------------------------ | ----------------------------------------- |
| Separate challan for interest & TDS? | Not mandatory; can pay in one challan 281 |
| Interest reported in quarterly TDS return? | No |
| Late deducted TDS paid out of pocket requires return filing? | Yes, TDS return and Form 16A required |
| Form 16A issuance mandatory if TDS paid by deductor? | Yes |
---
If you want, I can also help you with the format to file correction or late TDS returns or how to prepare Form 16A for such cases. Just ask!
---
### 1) Penal Interest on Late Deduction and Late Payment of TDS:
* **Are two separate challans (Challan 281) required for TDS and interest?**
**No.** You can pay both the TDS amount and interest/penalty in the **same challan 281** by filling the relevant details for each. The challan allows you to enter principal amount (TDS), interest, and penalty separately.
However, if you want to keep things very clear, you may pay in separate challans, but it’s not mandatory.
* **Will interest form part of the quarterly TDS return?**
No, **interest or penalty amounts are not reported in the TDS quarterly return.**
The TDS return only reports TDS deducted and deposited, not interest or penalties. Interest paid is accounted for separately in the Income Tax Department’s system and linked with your TAN.
---
### 2) TDS deducted and deposited out of pocket (not deducted at source):
* If you **have deducted TDS late** (i.e., after payment to the deductee or non-deduction earlier), and **you are depositing TDS from your own funds**, the following is applicable:
* **You must file the TDS return** for that period/FY with the details of the deductee and the TDS deducted and deposited.
* **Form 16A (TDS certificate) should be issued** to the deductee for the TDS amount deducted late, even if the deductee did not bear the TDS cost directly (i.e., it was not deducted from their payment).
* The deductee can claim this TDS credit in their income tax return.
* **Example:**
If NBFC gave a loan and TDS on interest was not deducted on time but now you deduct and deposit the TDS yourself (out of pocket), you still need to file the TDS return for that interest payment period and issue Form 16A to the NBFC.
---
### Summary:
| Question | Answer |
| ------------------------------------------------------------ | ----------------------------------------- |
| Separate challan for interest & TDS? | Not mandatory; can pay in one challan 281 |
| Interest reported in quarterly TDS return? | No |
| Late deducted TDS paid out of pocket requires return filing? | Yes, TDS return and Form 16A required |
| Form 16A issuance mandatory if TDS paid by deductor? | Yes |
---
If you want, I can also help you with the format to file correction or late TDS returns or how to prepare Form 16A for such cases. Just ask!
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