How to file delayed TDS payment?

Hey! Here’s a clear breakdown of your situation and the correct approach to file delayed TDS payments:

What you did:

• You missed deducting TDS in Q4 FY 2020-21.

• Later, you deposited TDS in FY 2021-22 using a challan of that FY.

• Then you filed a correction statement (without DSC) for Q4 FY 2020-21 and added the FY 2021-22 challan details.

• TRACES says "Processed without defaults," but you expected interest and late fee to be calculated.

Is this correct?

Not exactly.

When TDS payment is delayed, the law requires:

1. Filing a TDS correction statement (original or revised) for the quarter when TDS was actually deducted/due.

2. Interest and late fee should be paid separately for the delayed deduction/payment under sections 201(1A) and 234E, as applicable.

Adding a challan from a later FY in the earlier FY's TDS statement does not trigger interest calculation automatically on TRACES because TRACES only verifies challan validity, not delay penalties or interest.

Correct way to handle delayed TDS payment:

1. File the TDS return for the original period (Q4 FY 20-21) with the correct TDS details (you can do this using Form 26Q or 24Q correction).

2. Pay interest and late fee separately:

   • Calculate interest under section 201(1A) for delayed deduction and payment of TDS.

   • Pay late fees under section 234E for late filing.

3. Deposit interest and late fee via a separate challan (Challan ITNS 281).

4. You can then file a revised TDS return for that quarter with the correct TDS and challan details.

Additional points:

• TRACES will not automatically calculate interest or late fees for delayed TDS payment.

• You have to calculate interest manually or use the government portal's interest calculator.

• The bank challan for TDS payment should correspond to the FY and quarter of deduction to avoid mismatch.

• Your method may be accepted from a filing perspective, but the interest and late fees need to be handled separately.

Summary:

Your current approach is partially okay for filing, but interest and penalty payments must be done separately and manually calculated.