LATE-FEE AND PENALTY FOR NON-FILING OR DELAYED FILING OF TDS/TCS RETURNS

Let’s start with understanding the few basic duties of a person liable to deduct/collect tax at source and due dates for filing of TDS/TCS return.

Duties of the person liable to deduct/collect tax at source :

  1. Apply for TAN and get it first (Link to apply TAN online : https://tin.tin.nsdl.com/tan/form49B.html).
  2. Quote your TAN in all the documents pertaining to TDS/TCS.
  3. Deduct/Collect the tax at source at the applicable rate.
  4. Pay the tax deducted/collected by you to the credit of the Government.
  5. File the periodic TDS/TCS returns.
  6. Issue the TDS/TCS certificate in respect of tax deducted/collected by you.

Due Dates for filing of TDS/TCS return

QUARTER (QTR) DUE DATE OF TDS RETURN FOR ALL  DUE DATE TCS RETURN FOR ALL
APR-JUN 31 JULY 15 JULY
JUL-SEP 31 OCTOBER 15 OCTOBER
OCT-DEC 31 JANUARY 15 JANUARY
JAN-MAR 31 MAY 15 MAY

LATE FEE PROVISIONS

A person who fails to file the TDS/TCS return or does not file the TDS/TCS return by the due dates prescribed has to pay late filing fees as provided under section 234E and apart from late filing fees he shall be liable to pay penalty under section 271H.

Late-fee u/s-234E :

Where a person fails to file the TDS/TCS return on or before the due date, then he shall be liable to pay, by way of fee, a sum of Rs. 200 for every day during which the failure continues. The amount of late fees shall not exceed the amount of TDS.

Note : TDS/TCS return cannot be filed without payment of late-fees as discussed above. In other words, the late filing fees shall be deposited before filing the TDS return. It should be noted that Rs. 200 per day is not penalty but it is a late filing fee.

Penalty u/s-234H :

As per section 271H, where a person fails to file the statement of tax deducted/collect at source i.e. TDS/TCS return on or before the due dates prescribed in this regard, then assessing officer may direct such person to pay penalty under section 271H.

Minimum penalty can be levied of Rs. 10,000 which can go upto Rs. 1,00,000.

Penalty under section 271H will be in addition to late filing fees prescribed under section 234E.

Apart from delay in filing of TDS/TCS return, section 271H also covers cases of filing incorrect TDS/TCS return.

Penalty under section 271H can also be levied if the deductor/collector files an incorrect TDS/TCS return.

In other words, minimum penalty of Rs. 10,000 and maximum penalty of upto Rs. 1,00,000 can be levied if the deductor/collector files an incorrect TDS/TCS return.

No penalty will be levied under section 271H for the failure to file the TDS/TCS return, if the person proves that after paying tax deducted/collected by him, along with the late- filing fee and interest (if any), to the credit of the Central Government, he had filed the TDS/TCS return before the expiry of a period of one year from the due date of filing the TDS/TCS return.

In other words, no penalty under section 271H will be levied in case of delay in filing the TDS/TCS return if following conditions are satisfied:

The tax deducted/collected at source is paid to the credit of the Government. Late filing fees and interest (if any) is paid to the credit of the Government.
The TDS/TCD return is filed before the expiry of a period of one year from the due date specified in this behalf.
It should be noted that the above relaxation is applicable only in case of penalty levied under section 271H for delay in filing the TDS/TCS return and not in case of filing incorrect TDS/TCS statement.

Apart from above relaxation, in following two cases the taxpayer can get relief from penalty under section 271H:
Under section 273A(4) the Principal Commissioner of Income-tax or Commissioner of Income-tax has power to waive or reduce the penalty levied under the Income-tax Act. Penalty can be waived or reduced by the Commissioner of Income-tax if the conditions specified in section 273A(4) in this regard are satisfied.

Apart from shelter of section 273A(4), section 273B also provides immunity from penalty in genuine cases. As per section 273B, penalty under section 271H will not be levied if the taxpayer proves that there was a reasonable cause for failure.

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Tax Shastra is a knowledge-sharing platform for Individuals, Businesses & Professionals, solely managed and guided by Ratan Sarraf, where you can learn your taxes and finance easily.

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