TDS Return

TDS Penalty and Late Filing Fees for Tax Deduction at Source

calendar03 Dec, 2020
timeReading Time: 4 Minutes
TDS Penalty and Late Filing Fees for Tax Deduction at Source

Every assesses whose has to deduct TDS requires filing TDS return. These returns must be filed after particular intervals of time, and information has to be submitted to income tax authorities including TAN (Tax Deduction & Collection Account Number), amount deducted, TDS payment, Permanent Account Number (PAN), kind of payment, etc. There are late filing fees for delayed filing of TDS returns so it is important to know the exact due dates otherwise one has to deal with TDS penalty.

Duties of the Person Liable to Deduct and Collect Tax at Source

Person Liable to Deduct and Collect Tax at Source

Comply with Due Dates for Filing of TDS/TCS Return

Due dates for filing of the TDS/TCS return for different quarters of Financial Year 2019- 20 are as given below:-

Quarter ending Due date for filing of the TDS return (Both for Government and other Deductor)   Due date for filing of TCS return  
30 June 2020 31 July 2020 15 July 2020  
30 September 2020 31 October 2020 15 October 2020  
31 December 2020 31 January 2021 15 January 2021  
31 March 2021 31 May 2021   15 May 2021  

The person who fails to file TDS/TCS return or does not file TDS/TCS return by due dates specified in this regard has to pay the late filing fees as given under section 234E. Apart from late filing fees he will be liable to pay the penalty under section 271H.

Read our article:TDS Returns Filing: Due Dates and Procedure for Filing

Late filing fees Under Section 234E

According to section 234E, when the person fails to file TDS/TCS return on or before due date specified then he will be liable to pay the late fee of a sum of Rs. 200 for every day during which a failure continues. An amount of late fees must not exceed the amount of TDS. The TDS/TCS return cannot be filed without paying of late filing fees. In other words, a late filing fees has to be deposited before filing a TDS return. It must be noted a sum of Rs. 200 paid per day is not penalty but it is a late filing fee.

Penalty under section 271H

According to section 271H, when the person fails to file a statement of tax deducted and collect at source i.e. TDS/TCS return on or before due dates specified in then assessing officer can direct such person to pay penalty under section 271H. A minimum penalty can be levied of Rs. 10,000 which can extend upto Rs. 1,00,000. The penalty under section 271H shall be in addition to the late filing fees i.e. prescribed under section 234E.

Also apart from a delay in filing of TDS/TCS return, section 271H also covers cases of a filing incorrect TDS/TCS return. The penalty under section 271H must also be levied if a deductor/collector files an incorrect TDS/TCS return. The minimum penalty of Rs. 10,000 which maximum can extend upto Rs. 1, 00,000 can be levied in case a deductor/collector files an incorrect TDS/TCS return.

The penalty will NOT be levied under section 271H for a failure to file TDS/TCS return, if a person proves that he had filed the TDS return and TCS return before a expiry period of one year from the due date of filing along with a late filing fee and interest to the Central Government. No penalty will be levied under section 271H in case of delay in filing TDS/TCS return if conditions mentioned below are satisfied:

  • The tax deducted and collected at source is paid to a credit of Government.
  • The Late filing fees and interest is paid to a credit of Government.
  • The TDS/TCD return is filed before an expiry of a period of one year from a due date specified in this behalf.

It has to be noted that the relaxation is applicable only if penalty levied under section 271H for delay in filing the TDS return and TCS return and not in case of filing of incorrect TDS/TCS statement.

Relief from Penalty u/s 271H that a Taxpayer can avail

  • Under section 273A (4), a Principal Commissioner of Income-tax or Commissioner of Income-tax has a power to waive or reduce any penalty levied under Income Tax Act[1]. The penalty can be waived and reduced by the Commissioner of Income-tax if the conditions specified in section 273A (4) are satisfied.
  • Other than section 273A (4), the section 273B gives an immunity from penalty in genuine cases. According to section 273B, penalty under section 271H will not be levied if the taxpayer proves that there was the reasonable cause for failure.

Conclusion

On failing to file TDS returns within the due date it will be subject to the late filing fees and beyond that the person will be liable to pay the TDS penalty. The fee will be charged for every day after a due date, until the date on TDS return is filed. However, the maximum penalty that required to be paid must not increase the TDS amount liability. The Corpbiz provides assistance related to filing of the tax returns.

Read our article:All about Benefits of TDS Return Filing in India

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