Failure to deduct or remit TDS/TCS (fully or partially)
- Interest: Interest at the rates in force (12% p.a.) from the date on which tax was deductible /collectible to the date of payment to Government Account is chargeable. The Finance Act 2010 amended interest rate wef 01.07.2010 and created a separate class of default in respect of tax deducted but not paid to levy interest at a higher rate of 1.5% per month, i.e. 18% p.a. as against 1.0% p.m., i.e. 12% p.a., applicable in case the tax is deducted late after the due date. The rationale behind this amendment is that the tax once
deducted belongs to the government and the person withholding the same needs to be penalized by charging higher rate of interest Penalty equal to the tax that was failed to be deducted/collected or remitted is leviable.
- In case of failure to remit the tax deducted/collected, rigorous imprisonment ranging from 3 months to 7 years and fine can be levied
- Disallowance of Expense for non deposit of TDS -Section 40(a)(ia)
- Failure to apply for TAN in time or Failure to quote allotted TAN or Wrong quoting of TAN: Penalty of Rs.10,000 is leviable u/s.272BB(for each failure)
- Failure to issue TDS/TCS certificate in time or Failure to submit form 15H/15G in time or Failure to furnish statement of perquisites in time or Failure to file Quarterly Statements in time: For each type of failure, penalty of Rs.100/-per day for the period of default is leviable. Maximum penalty for each failure can be up to the amount of TDS/TCS.