Read About TDS Payment and Penalties After COVID-19

Tax Deducted at Source (TDS) is the tax which is deducted by the payer (deductor) while making the payments to the receiver (deductee). TDS is charged on salaries, rent payments, property sale payments, and other payments. TDS is governed by the Income Tax Act 1961, which states that the deductor is required to pay the collected TDS to the government regularly by the deadlines, mandatorily, otherwise he will be charged a penalty. The deductee is also required to file the TDS returns under form 26AS. Such deadlines and penalties are being detailed in this article so, you can easily file your TDS return with our Gen TDS Software.

TDS Payment Deadlines

As stated above, it is mandatory for the deductor to pay the TDS collected to the government otherwise a penalty will be imposed. The provisions related to the payment of TDS collections are ruled and detailed under Section 30 of the Income Tax 1961. 

The deadline to payment of TDS collections is the same day on which such TDS was deducted by the deductor. The deductor can also make the payment of TDS collections quarterly but he will have to take the permission of the Joint Commissioner. Section 192, 194A, 194D, 194H govern the provisions of payment of TDS quarterly. The deadlines for payment of TDS collections are given below:

Consequences of Failure in Deducting TDS

According to section 201 of the Income Tax Act 1961, if a deductor fails to deduct the TDS of any deductee properly, then he will be charged an interest on the payable amount by the government. 

Changes in The Interest Rates Due to COVID19

The government has decided to reduce the interest rate, charged on the deductor for the non-payment of TDS by the deadline, to 9% only if the deadline falls between 20th March 2020 to 29th June 2020. After 30th June 2020, the regular penalties and surcharge will be deducted.

TDS Return Filing Deadlines

It is mandatory that every single deductee is required to file the TDS returns, quarterly, as per the TDS deducted. The return filing compulsion is introduced by the government as it helps them in maintaining the records of the deductee. The due dates of TDS returns are uniformed by the government now. The deadlines for each quarter are as stated below:

Deadlines For Filing the TDS Returns Under Section 194-IA, 194-IB, and 194-M

According to Rule 4 (31A) of the Income Tax Rules, the deductor liable to deduct the TDS according to section 194-IA, 194-IB, and 194-M, is required to get a TDS challan generated within 30 days from the end of the month in which the payment was collected after deducting the TDS. Such deductions are required to be submitted TDS Form no. 26QB, 26QC, 26QD accordingly.

Consequences of Failure in Filing TDS Returns

If any deductee fails to file the TDS returns by the deadline, then he will be charged a total of Rs. 200 per day, until the delay continues. The total amount charged for delay can not be greater than the total liability of TDS.

Penalties For the Delay in Filing TDS Returns

According to Section 271H of the Income Tax Act 1961, the deductee will also be charged a penalty, along with the late fee. The penalty under the section ranges between Rs. 10,000 and Rs. 1,00,000. The penalties can only be exempted if the deductee:

• Has the proof that the tax liabilities are already paid by him from the government credit with fees and penalty.
• Has already filed the TDS returns within one year from the deadline of filing the return.

If you wish to file your TDS returns regularly and hassle-free then you can do so with the help of all-new Gen TDS Return Filing Software that is designed by SAG Infotech: CA taxation software development company. The software helps in filing the returns according to the norms of the income tax department. In case of delays, the software will also calculate the penalty and late fees amounts easily. It is a one-stop solution for all your TDS return filing needs. The software is available for demo to help the assessees in understanding the working of the software. You can get yours, today, by contacting us at SAG Infotech through info@saginfotech.com or by giving us a line at 0141-4072000.