Time limit to Deposit TDS and File TDS Return

Late Filing Fee

Under Section 234E, you will have to pay a fine of Rs 200 per day (two hundred) until your return is filed. You have to pay this for every day of delay until the fine amount is equal to the amount you are supposed to pay as TDS.

Note: The above interest should be paid before filing of TDS return.

Under Section 201(1A) for late deposit of TDS after deduction, you have to pay interest. Interest is at the rate of 1.5% per month from the date at which TDS was deducted to the actual date of deposit. Note, that this is to be calculated on a monthly basis and not based on the number of days i.e. part of a month is considered as a full month.

Also, consider the case in which you deposit tax one month after the due date. Say you have deducted TDS on 1st August. Then the due date is 7th September. Now say you deposit tax on 8th September (i.e. one day after the due date). Then interest is applicable from 1st August to 8th September i.e. for a period of 2 months. You now have to pay interest of 1.5% p.m. x 2 months = 3%.

Penalty

Equals the amount that was failed to be deducted/collected or remitted may be imposed.

Prosecution (Sec 276B):

If a person fails to pay to the credit of the Central Government —

The Tax deducted at source by him as required by or under the provisions of Chapter XVII-B, he shall be punishable with rigorous imprisonment for a term which shall not be less than three months but which may extend to seven years and with fine.

Penalty for Late Filing of TDS Return

1. Penalty (Sec 234E)

Deductor will be liable to pay the way of fee Rs.200 per day till the failure to pay TDS continues. However, the penalty should not exceed the amount of TDS for which statement was required to be filed.

2. Penalty (Sec 271H)

Assessing officer may direct a person who fails to file the statement of TDS within due date to pay penalty minimum of Rs.10,000 which may be extended to Rs.1,00,000.

3. The penalty under this section is in addition to the penalty u/s 234E.

4. This section will also cover the cases of incorrect filing of TDS return.

No penalty under section 271H will be levied in case of delay in filing the TDS/TCS return if the 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/TCS return is filed before the expiry of a period of one year from the due date specified in this behalf.