delay of payment

hai,

i want to know the effect of delay payment of TDS remittence to Govt, what is the rate of interest and any penalties. also about e returns, compulsory should pay form 17 or 281 pls clarify me

Replies (1)

If the TDS amount is not deposited by the required date, then for each month you must add an interest equal to 1% of the TDS amount. Even if the delay is by one day, you will have to pay one month's interest. If the TDS return is not filed by the due date, there is a penalty of Rs. 100 per day subject to maximum limit equal to the TDS amount.

 

As per notification issued by the Income Tax Department, new system of TDS/TCS has been started From 01.04.2009. In new System every deductor who has deducted the TDS/TCS has to deposit tax on New TDS challan Form 17 through Online mode only. In this challan Details of deductee (pan) is also required to be uploaded.

 

Further Ministry of Finance has clarified that this challan is applicable for deduction/collection on or after 01.04.2009 and for old deduction challan 281 is applicable.

 

One Interesting Fact  -  in the recent case - Intimate Clothing Pvt. Ltd. (taxpayer) vs. Addtl. CIT - Income Tax Appellate Tribunal (ITAT) held that penalty shall be levied only when a taxpayer fails to deduct tax and not when he deposits tax late. Hence, (as far as I think) for late deposit of TDS, you will have to pay Interest only and not a Penalty.

 

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