Section 271H of the Income Tax Act, 1961, outlines penalties related to the late filing, non-filing, or furnishing of incorrect information in Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) returns.
Key Provisions of Section 271H:
Applicability:
- Late or Non-Filing of Returns: If a deductor or collector fails to submit the TDS or TCS return within the prescribed time frame.
- Incorrect Information: If the return filed contains incorrect details, such as inaccurate PAN, challan numbers, or TDS amounts.
- Late Filing Fee: A fee of ₹200 per day is levied for each day the return is delayed. This fee accrues from the due date until the return is filed but cannot exceed the total amount of TDS or TCS due.
- Additional Penalty: Beyond the daily late filing fee, an additional penalty ranging from a minimum of ₹10,000 to a maximum of ₹1,00,000 may be imposed for failure to file the return or for furnishing incorrect information.
Due Dates for Filing TDS and TCS Returns:
| Quarter Period | TDS Return Due Date | TCS Return Due Date |
| April – June | 31st July | 15th July |
| July – September | 31st October | 15th October |
| October – December | 31st January | 15th January |
| January – March | 31st May | 15th May |
Exceptions to Penalties:
Penalties under Section 271H may not be imposed if the following conditions are met:
- The TDS or TCS amount is deposited to the government’s credit.
- Applicable interest and late filing fees are also paid.
- The return is filed within one month of the due date.
Recent Amendments:
Till 31st March, sub-section (3) of Section 271H permits the filing of TDS / TCS returns up to one year after the due date without incurring penalties.
However, to encourage more timely compliance, the grace period is reduced to just one month. This means that w.e.f 1st April 2025, TDS / TCS returns must be submitted within one month of their due date to avoid any penal consequences.