Smart & Easy TDS Software for Preparing TDS Returns

TDSMAN Blog - Smart & Easy TDS Software for Preparing TDS Returns

Consequences of TDS defaults

Failure to deduct taxes or wrong deduction of TDS (non deposit, short deposit or late deposit):

Default/ Failure Section
Nature of Demand Quantum of demand or penalty

Failure to deduct tax at source

201(1) Tax demand Equal to tax amount deductible but not deducted
201(1A) Interest @1 % p.m. of tax deductible
271C Penalty Equal amount of tax deductible but not deducted
Failure to deposit tax at source 201(1) Tax demand Equal to tax amount not deposited
  201(1A) Interest @1.5% p.m. of tax not deducted
  276B Prosecution Rigorous imprisonment for a term for a minimum of 3 months which may extend to 7 years and with fine
Failure to apply for TAN No. u/s 203A 272BB Penalty Rs. 10000
Failure to furnish prescribed statements u/s 200(3) 272A(2)(k) Penalty Rs. 100 every day during which the failure continues subject to maximum of TDS amount
Failure to issue TDS certificate u/s 203 272(A)(g) Penalty Rs. 100 every day during which the failure continues subject to maximum of TDS amount.
Failure to furnish statement of perquisite or profit in lieu of salary u/s 192(2C) 272(A)(i) Penalty Rs. 100 every day during which the failure continues subject to maximum of TDS amount
Failure to mention PAN of the deductee in the TDS statements and certificates 272B Penalty

Rs. 10000

 If TDS return is not filed within the specified due dates being 31st July, 2016 for the 1st quarter corresponding to FY 2016-17, the major consequences would be levy interest.

However in case of payments made under sec. 194A, 194C, 194H, 194I and 194J in respect of individual and HUF, only if the turnover or professional receipt exceeds sum of Rs. 1 Crore or Rs. 25 Lacs respectively in previous year, there is a requirement to deduct tax at source.


Rights of Tax Payers

Credit of TDS

If tax has been deducted at source u/s 192 to 194 A/B/BB/C/ D/E/EE/F/G/H/I/J/K, 195, 196A/B/C and D, the person from whose income (payment) the tax has been deducted i.e. Payee or assessee shall not be asked upon to pay the tax himself to the extent tax has been deducted (Sec.205). Moreover u/s 199 such tax deducted at source shall be treated as payment of tax on behalf of the payee (assessee).

TDS Certificate

U/s 203 payee (tax payer) is entitled to obtain a certificate from the payer (tax deductor) in Form 16-A specifying the amount of tax deducted and other prescribed particulars.

Form 26AS

As per section 203AA the prescribed income tax authority or the person authorized by such authority (as referred in section 200(3))will be required to deliver to the person from whose income the tax has been deducted/paid, a statement of deduction of tax in the prescribed form. Such statement as per rule 31AB will be required to be furnished in Form no.26AS by the 31st July following the financial year during which the taxes were deducted/paid (also refer Notification no. 928 E dt. 30.6.2005 of CBDT).


Duties of TDS Deductors

Deduct Tax at Correct Rate and deposit in Government Account – Sec 200

Every person responsible for deducting tax at source shall at the time of payment or credit of income, whichever is earlier, verify whether the payment being made is to be subject to deduction of tax at source. If it is so, he must deduct such tax as per the prescribed rates. Further he is required to deposit such tax deducted in the Central Government Account within the prescribed time as specified in Rule 30.

Issue a TDS certificate

Further, such person is required to issue a certificate of tax deduction at source u/s 203 to the person from whose income the TDS has been done, in the prescribed proforma i.e. Form No.16A within prescribed time(as discussed earlier).

File Prescribed Return/Quarterly Statement

A return of TDS is a comprehensive statement containing details of payments made and taxes deducted thereon along with other prescribed details. For deductions made prior to 01.04.2005 earlier every deductor was required as per the provisions of Section 206 (read with Rule 36A and 37) to prepare and deliver an annual return, of tax deducted at source. However w.e.f. 01.04.2005 there is no requirement to file annual returns and instead Quarterly statements of TDS are to be submitted in form 26Q by the deductors.


Simplification of procedure for Form No. 15G & 15H – Clarifications

F.No. DGIT(S)/CPC(TDS)/DCIT/15GH/2016-17/4539

Government of India

Ministry of Finance

Central Board of Direct Taxes

Directorate of Income-tax (Systems)

New Delhi.

Notification No 9/2016

New Delhi, 9th June, 2016

Subject: Simplification of procedure for Form No. 15G & 15H – Clarifications – reg

The existing provisions of section 197A of the Income-tax Act, 1961 (The Act) inter alia provide that tax shall not be deducted, if the recipient of certain payment on which tax is deductible furnishes  to the payer a self declaration in Form No. 15G/15H in accordance with provision of the said Section. The manner of filing such declarations and the particulars have been laid down in Rule 29C of the Income-tax Rules, 1962 (The Rules) w.e.f. 01.10.2015 vide Notification No. 76/2015 dated 29.09.2015.

2. As per sub-rule (7) and (8) of rule 29C of the Rules notified vide aforesaid notification, the Principal Director General of Income Tax (Systems) is required to specify the procedures, formats and standards for the purposes of furnishing and verification of declaration and allotment of unique identification number. In pursuance of the same, Principal Director General of Income tax (Systems) has issued Notification No. 04/2015 dated 1st December 2015 to notify the procedure, formats and standards.

3. Representations have been received for clarification on the following issues:

(a) Due date for quarterly uploading of 15G/H declarations by payers on e-filing portal,

(b) The manner for dealing with Form 15G/15H received by payer during the period from 01.10.2015 to 31.03.2016.

4. In this regard, it is hereby specified that:

(a) The due date for quarterly furnishing 15G/15H declarations received by payer from 01.04.2016 onwards shall be as given below:

Sl. No. Date of ending of the quarter of the financial year Due Date
(1) (2) (3)
1. 30th June 15th July of the Financial Year
2. 30th September 15th October of the Financial Year
3. 31st December 15th January of the Financial Year
4. 31st March 30th April of the Financial Year immediately following the financial year in which declaration is made.

(b) The payer shall furnish 15G/15H declarations received during the period from 01.10.2015 to 31.03.2016 on e-filing portal ( in the given format on or before 30th June, 2016.

(PS. Thuingaleng)

Dy. Commissioner of Income-tax (CPC-TDS)

O/o The Pr. Director General of Income Tax (Systems)

Source: Income Tax

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