TDSMAN Blog

Smart & Easy TDS Software for Preparing TDS Returns

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

Consequences for a deductor if he fails to deduct TDS or fails to deposit it to the Government’s account

A deductor would face the following consequences if he fails to deduct TDS or after deducting the same fails to deposit it to the credit of Central Government’s account:-

a) Disallowance of expenditure

As per section 40(a)(i) of the Income-tax Act, any sum (other than salary) payable outside India or to a non-resident, which is chargeable to tax in India in the hands of the recipient, shall not be allowed to be deducted if it is paid without deduction of tax at source or if tax is deducted but is not deposited with the Central Government till the due date of eTDS filing.

However, if tax is deducted or deposited in subsequent year, as the case may be, the expenditure shall be allowed as deduction in that year.

Similarly, as per section 40(a)(ia), any sum payable to a resident, which is subject to deduction of tax at source, would attract 30% disallowance if it is paid without deduction of tax at source or if tax is deducted but is not deposited with the Central Government till the due date of filing of return.

However, where in respect of any such sum, tax is deducted or deposited in subsequent year, as the case may be, the expenditure so disallowed shall be allowed as deduction in that year.

b) Levy of interest

As per section 201 of the Income-tax Act, if a deductor fails to deduct tax at source or after the deducting the same fails to deposit it to the Government’s account then he shall be deemed to be an assessee-in-default and liable to pay simple interest as follows:-

(i) at one per cent for every month or part of a month on the amount of such tax from the date on which such tax was deductible to the date on which such tax is deducted; and

(ii) at one and one-half per cent for every month or part of a month on the amount of such tax from the date on which such tax was deducted to the date on which such tax is actually paid.

c) Levy of Penalty

Penalty of an amount equal to tax not deducted or paid could be imposed under section 271C​.

Source: Income Tax

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Fees and Penalty for Late Filing of TDS Returns

Fees and Penalty for Late Filing of TDS Returns are as follows:

Section 234E – Levy of Fees 

  • Failure to submit TDS return on time will result in fees on the deductor.
  • If you delay or forget to file your TDS return, fees of Rs. 200 per day will be levied on the deductor, as long as TDS return is not filed.
  • The levied amount of fee is not supposed to exceed the TDS deductibles.
  • Prior to TDS filing such fee should be paid and it should be reflected in the TDS return.

Section 271H – Penalty

  • Deductor has to pay a penalty ranging from minimum of Rs. 10,000/- to One Lac rupees,
    • If deductor exceeds one year time limit to File TDS Statement.
    • If deductor furnishes incorrect details like PAN, TDS Amount, Payment of Challan etc.
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Late Filing of TDS Returns – Fees and Penalty

Fees and Penalty for Late Filing of TDS Returns are as follows:

Section 234E – Levy of Fees 

  • Failure to submit TDS return on time will result in fees on the deductor.
  • If you delay or forget to file your TDS return, fees of Rs. 200 per day will be levied on the deductor, as long as TDS return is not filed.
  • The levied amount of fee is not supposed to exceed the TDS deductibles.
  • Prior to TDS filing such fee should be paid and it should be reflected in the TDS return.

Section 271H – Penalty

  • Deductor has to pay a penalty ranging from minimum of Rs. 10,000/- to One Lac rupees,
    • If deductor exceeds one year time limit to File TDS Statement.
    • If deductor furnishes incorrect details like PAN, TDS Amount, Payment of Challan etc.
facebooktwittergoogle_plusredditpinterestlinkedinmail

Late Filing of TDS Returns – Fees and Penalty

Fees and Penalty for Late Filing of TDS Returns are as follows:

Section 234E – Levy of Fees 

  • Failure to submit TDS return on time will result in fees on the deductor.
  • If you delay or forget to file your TDS return, fees of Rs. 200 per day will be levied on the deductor, as long as TDS return is not filed.
  • The levied amount of fee is not supposed to exceed the TDS deductibles.
  • Prior to TDS filing such fee should be paid and it should be reflected in the TDS return.

Section 271H – Penalty

  • Deductor has to pay a penalty ranging from minimum of Rs. 10,000/- to One Lac rupees,
    • If deductor exceeds one year time limit to File TDS Statement.
    • If deductor furnishes incorrect details like PAN, TDS Amount, Payment of Challan etc.
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