Tax deduction from salary does not mean the end of TDS compliance responsibilities for an employer. It is crucial for an employer to file quarterly TDS returns for tax deducted from salaries. TDS Return is a statement submitted by deductors to the Income Tax (IT) department on a quarterly basis. It records all TDS related transactions carried out in a quarter.
The TDS return filing process is not as easy as it seems. Any omission or misstatement of information may attract notice from the Income Tax Authorities. Through this blog, we will discuss the penalties and interest on late payment of TDS.
TDS payment due date every quarter
| Month of Deduction |
Quarter ending |
Due date for TDS Payment through Challan |
Due Date for TDS Return Filing from the FY 2020-21 for all Deductors |
| *For Govt. Deductor |
For Other Deductor |
| April |
30th June |
7th May |
31st March 2021 |
| May |
7th June |
| June |
7th July |
| July |
30th September |
7th August |
31st March 2021 |
| August |
7th September |
| September |
7th October |
| October |
31st December |
7th November |
31st Jan |
| November |
7th December |
| December |
7th Jan |
| January |
31st March |
7th Feb |
31st May |
| February |
7th March |
| March |
7th April |
30th April |
All sums deducted as per the provisions of Chapter XVII-B by a Government office without challan should be deposited on the same day of deduction. Below-listed are the penalties applicable in case of late payment of TDS:
- Late filing fee ( in case you have not filed TDS Returns by the correct date)
- Interest (if you do not deposit TDS amount in time)
- Penalty (if TDS is not filed within a year of the due date)
Interest
Provision of Interest on late payment of TDS or on late deduction of TDS is defined in the Section 201(1) of Income Tax Act, 1996:
Interest on late deduction of TDS: Assessee is liable to pay interest @1% for every month or part of the month on the amount of TDS from the due deduction date till the actual date of deduction.
Interest on late payment of TDS: Assessee is liable to pay Interest @ 1.5% for every month or part of the month on the amount of TDS from the due deduction date till the actual date of deduction.
Penalty
Any assessee who fails to fill his/her TDS returns before the deadline, he is liable to pay penalty that equals the amount that was failed to be deducted.
Prosecution (Sec 276B)
In case an individual fails to pay to the credit of the Central Government
Under the provisions of Chapter XVII-B, he shall be punishable with a minimum imprisonment of 3 months that may extend to seven years along with fine.
Penalty for Late Filing of TDS Return
1. Late filing fee (Section 234E)
Deductor will have to pay INR 200 until TDS Return filing is done. However, the penalty should not exceed the TDS amount for which statement filing was required.
2. Penalty (Section 271H)
Under this Section, an individual who fails to file the TDS statement within due date will be liable to pay a minimum penalty of INR 10,000 which may be extended to INR 1,00,000. The penalty under this section is in addition to the late filing fee under Section 234E.
Also, this section will cover the incorrect TDS Return Filing cases.
In case of delayed TDS/TCS return filing, no penalty under Section 271H will be charged given that an individual fulfils the below-listed conditions:
- TDS/ TCS to be paid to the credit of the Government
- Late TDS return filing fees and interest (if any) to be paid to the credit of the Government
- TDS/TCS return to be filed before the expiry of a one-year period from the specified due date