Due dates for TDS payment to be made every quarter

Note: Amount deducted as per the provisions of Chapter XVII-B by a government official without challan (Treasury Challan) should be credited to government account on the same day when TDS is deducted.

Penalties applicable on non-payment of TDS by due dates

Late filing fee (for not file by the due dates)
Interest (for not depositing TDS on time)
Penalty (for not filing TDS within one year from the deadline)

The late TDS filing fee

As per section 234E, a fine of Rs 200 per day until the return is filed, is applicable.

This filing fee is applicable for every day until the penalty becomes equal to the TDS, a taxpayer is supposed to pay.

The maximum limit for the filing fee is INR 5000.

For example:

Suppose TDS payable on 13th May which is the due date to pay TDS is INR 5000. But, TDS is paid on 17th November, which means after 189 days of due dates.

So, the penalty applicable would be:

INR 200 x 189 days = INR 37800.

However, this amount is higher than INR 5000, so the total late filing fee will limit itself to INR 5000, as the total late filing fee can not exceed the limit of INR 5000.

Interest On TDS

Note: The above-mentioned interest is payable before the filing of TDS returns Via Gen TDS Software.

According to Section 201(1A) for late payment of TDS after deduction, interest is also payable for late deposit of TDS. Interest @ 1.5% per month, from the date when TDS was deducted to the date when TDS is paid, is applicable.

Note: Interest on late payment of TDS is computed month-wise and on the basis of the number of days. Part of the month is treated as a full month.

For example

Suppose your TDS payable is INR 5000 and the, when TDS is deducted, is 13th January. The date, when you paid TDS, is 17th May. So, the interest applicable to you is INR 5000 x 1.5% p.m. x 5 months = INR 375.

Income Tax Act, 1961 has given the definition of a month. However, the cases in the High Court treat a, a period of 30days as a month and the ish calendar month is treated as considerable.
Interest is calculated from the date when TDS was deducted and not from the date when TDS became due.

For example

Suppose you deducted TDS on 19th April and the due date of TDS payment is the 7th May. You failed to pay the TDS by the due date of 7th May. Then interest payable will start from 19th April when TDS was deducted and not from 7th May which is the TDS due dates.

Let us take another example when the tax was paid one month after the last date. Suppose the TDS was deducted by you on 1st August and the last date to deposit the same is 7th September. But you deposited tax one day after the due date i.e. on 8th September.

Then interest will be computed from 1st August to 8th September, which for 2 months period. Interest payable will be 1.5% p.m. x 2 months = 3%.

Penalty on TDS

The penalty, equivalent to the amount of TDS/ TCS which had to be deposited but not deposited, is imposed.

1. Prosecution under section 276B

When an individual fails to credit the TDS deducted to the account of the Central Government, it is non-adherence to the provisions of Chapter XVII-B which leads to imprisonment for a period not less than three months. However, the term of imprisonment may extend to seven years along with fine.

Penalty on Filing of TDS Return after the due dates

2. The penalty under section 234E

A penalty of INR 200 per day is applicable to the deductor and it continues till the date when deductor finally pays off the TDS. Whatever the case may be, the amount of Penalty can not be more than the TDS amount for which statement is to be filed.

3. A penalty under section 271H

A penalty of INR 10,000 is imposed by assessing officer on an individual who was supposed to file the TDS statement but he failed to do so by the due date.

This penalty may get higher till the limit of INR 1,00,000.
This penalty u/s 271H os imposed along with the penalty u/s 234E.
Cases related to the erroneous filing of TDS return also treated u/s 271H.

There are some conditions under which no penalty u/s 271H is imposed on filing the TDS/TCS return after the due dates. These conditions are as follows:

When TDS or TCS is credited to the government’s account.
When late filing penalties and interests are paid to the government.
When TDS or TCS return is filed before the end of one year from the prescribed due date.