Delayed filing of 26QB, and received a penalty office. Any options?

• Yes, there is a practical path to reduce or waive the penalty, but only partially and with conditions.

• Interest under section 201(1A) is mandatory and cannot be waived.

• Late fee under section 234E (₹200/day) can sometimes be reduced/waived through a Section 273B “reasonable cause” petition, especially for a first-time, non-malafide lapse.

• The TRACES “declined amendment” issue is common when there is an open demand, mismatch, or backend validation failure—this usually requires payment first or manual escalation.

Thanks so much for your assistance.

Would you suggest I pay the penalties first and then apply for waiver under 273B, as I believe that can take time?

Also, I wonder what is the process for appeal? Is there a specific email or contact where I send the details?

P.S: (I am paying as an NRI and not physically based in India).

Yes — you should pay first. This is the correct and safest approach, especially for NRIs.

• Payment stops further interest immediately.

• Section 273B waiver / rectification can take weeks or months, but payment does not prejudice your rights.

• Appeals and rectifications do not suspend interest accrual unless demand is paid.

For appeals: there is no email or physical submission. Everything is online via the Income-tax e-Filing portal, which works fully for NRIs.

Action Plan

• Pay the full outstanding demand immediately

• File Rectification u/s 154 for GST-inclusive value error

• Submit Section 273B reasonable-cause waiver (if penalty order exists)

• Track status for 30–45 days

• File Form 35 appeal only if relief is denied

Thanks, really helpful.

One more clarification, I got the challan to pay the excess 3 days ago, now if I pay it, its been 3 days since the challan, so would I get another one to cover the "delay panalty" for those 3 days? Just wonder, if it has to be paid instantly to stop the cycle.

No, you will NOT get a new challan just because you pay 2–3 days later.

• The challan already issued remains valid.

• Interest auto-calculates only up to the date of actual payment.

• Once you pay, the cycle stops permanently—there is no rolling or cascading challan system.

You do not need to pay it “instantly”; paying now fully closes the loop.

Detailed Steps / Computation

A. How interest actually works (important clarity)

Interest under Section 201(1A) is calculated in months (or part thereof), not daily.

That means:

• Even 1 day into a new month = interest for full month

• But within the same month, 2–3 days does not change the amount

📌 Practical impact in your case
If:

• Challan generated on, say, 5th of the month, and

• You pay on 8th of the same month

👉 Interest amount remains exactly the same
👉 No new challan will be generated

Only if payment slips into next calendar month could there be one additional month’s interest, which the system may later auto-adjust.

Hi,

1. My challan was paid on 30th and demand note on the 1st, so wonder if they count 3-4 days from demand date or challan date?
2. To pay the challan, is the right option "Demand Payment for TDS on Property" after i go to the income tax website - e-pay tax?
3. Finally, I was able to submit the correction of 26QB for the second payment (which I entered the property amount inclusive of GST, which led to the demand of "short TDS payment"), I wonder how long it takes to know the correction result and if in this case, also I should just pay first?

Thanks

Pls approach your CA 

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