Difference between Late Payment & Late Deduction

The difference between late payment and late deduction:

Late payment: After the tax is deducted at source it has to be deposited into the government account by 7th of the next month (except March for which it is 30th April). If it is deposited later than the due date, late payment interest is charged. The rate of interest for late payment is 1.5% per month or part of a month of the delay.

Late deduction: If the tax is deducted later than the date on which it was deductible i.e. either at the time of giving credit or at the time of payment of the dues, whichever is earlier, late deduction interest is charged. The interest for late deduction is at the rate of 1% per month or part of a month of the delay.

Interest on Late Payment of TDS

Interest on Late Deduction of TDS

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Preparing Salary TDS Return – Form 24Q (Q4)

Form 24Q (Salary TDS Return), in the fourth quarter (Q4) includes two annexures – Annexure I and Annexure II.

Annexure I is the regular quarterly data for the months of January to March.

Annexure II is the tax computation calculation information for each employee along with summary and tax deduction (TDS) for the whole financial year. This would determine, if any tax is due or needs to be refunded.

Summary and information to be submitted is summarised below:

Challan Details

• Date of Payment
• BSR Code
• Challan No.
• TDS
• Surcharge
• Education Cess
• Interest
• Fee (Sec. 234E)
• Others
• Total
• Minor Head
• Remarks
• Interest (allocated)
• Others (allocated)

Annexure I

• Challan Serial No.
• Challan No.
• Date
• Employee Serial No.
• Employee Name
• PAN
• Section – Govt. / Non-Govt employees
• Date
• Amount of Payment
• Income Tax
• Surcharge
• Cess
• Total Tax
• Tax Deposited
• Deduction Date
• Remarks
• Certificate No. (15G / 15H)

Annexure II

• Total Salary
• Less : Allowance under Section 10 (breakup into different sub-sections)
• Balance (calculated)
• Break up of Balance (current employer Salary and previous employer salary, if applicable)
• Deductions u/s 16 – Standard Deduction, Professional Tax, Entertainment Allowance
• Aggregate of Entertainment Allowance, Tax on Employment and Deduction u/s 16(ia)
• Income chargeable under the head ‘Salaries’ (calculated)
• Add : Any other income / loss other than salary offered for TDS (include Interest on Housing Loan)
• Gross Total Income (calculated)
• Deductions under chapter VI-A (80C, 80CCC, 80CCCD(1), 80D, 80E, etc.)
• Total Taxable Income (calculated)
• Tax on Total Income after deducting Rebate
• Surcharge
• Education Cess @ 4%
• Tax Payable
• Less: Relief u/s 89
• Net Tax Payable
• Total TDS Deducted (Break up of Current and Previous Employer)
• PAN & Name of House Owner – if aggregate annual rent payment exceeds Rs. 1 lakh
• PAN & Name of Lender – if interest claimed on housing loan

Prepare Salary TDS Return of Quarter 4 through TDSMAN

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Salary Details (Annexure II) : Form 24Q-Q4

Vide Notification No. 36/2019 by the Income Tax Department it had substantially modified the format of Part B of Form 16 (Salary TDS Certificate given to Employees) with effect from FY:18-19. Correspondingly, the information to be provided by the employer in Annexure II of Form 24Q-Q4 (Salary Details – providing tax computation of each employee) had also been changed. This came into effect for all Salary TDS Returns (Form 24Q) for FY:2018-19, Quarter 4.

Objective of the Department seems to consolidate information pertaining to the most frequently exercised exemptions & deductions being considered while determining the taxable income.

Highlights:

  • Break up of Salary and details of exemptions u/s 10 to determine the Total Salary (earlier  only Total Salary had to be provided)
  • Standard Deduction u/s 16(ia) has been included (this is new provision applicable from  FY-18-19 onwards)
  • Break up of Other Income (Other than Salary) – in two broad heads; Income / Loss from House Property and any other Income clubbed together (earlier this was one consolidated value)
  • Detailed breakup of deductions under Chapter VI (earlier it was only in two broad      categories – all sections with a consolidated cap of Rs. 1,50,000 and rest of the sections altogether)

Related Link
Prepare Salary TDS Return of Quarter 4 through TDSMAN

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7th July’20 – Due date for TDS and TCS payments for June’20

7th July, 2020 is the due date for TDS and TCS payments for the deductions/collections made in June, 2020. Make sure to do the needful on time to avoid interest implication.

Related Links
Online payment using Challan ITNS 281

Online payment (ITNS 281) directly through TDSMAN (Video)

Interest on Late Payment of TDS

Other Compliances for July, 2020

15th July – Due date for TCS Returns for FY: 20-21, Quarter 1 (Apr’20 – Jun’20)

31st July – Due date for filing TDS/TCS Returns for FY: 19-20, Quarter 4 (Jan’20 – Mar’20)

31st July – Due date for filing TDS/TCS Returns for FY: 20-21, Quarter 1 (Apr’20 – Jun’20)

NoteThese compliance dates are as of 2nd July 2020. Owing to COVID 19, it is subject to changes based on notification(s) by the Income Tax Department.

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